As a result, Germany has denied any culpability for what has gone wrong. Indeed as long as it can argue that it is not a source of the problem, it can justify resisting costly measures to resolve it.
Yet according to the Bank for International Settlements, Germany lent almost $1.5 trillion to Greece, Spain, Portugal, Ireland, and Italy. At the start of the crisis German banks had 30 percent of all loans made to these countries’ private and public sectors. Even today this one category of loans is equivalent to 15 percent of the size of the German economy.
Add to that heavy German involvement in the credit binge in American real estate (half of America’s subprime assets were sold on to Europe), and in property speculation across Europe, and it is clear that wherever parties were taking place, German banks were supplying the drinks (!).
As a result, Germany’s banks are today the most highly leveraged of any of the major advanced economies, a massive two and a half times more leveraged than their US banking peers, according to the International Monetary Fund.
Indeed, worried about the impact of stress tests on their credibility, German bank regulators have been hostile to the same disclosure and capital accounting requirements agreed on by every other euro zone country, and one Landesbank – the state-owned regional banks in Germany – went so far as to pull out of the tests the day before the results were released."
The above article was written by none other than Gordon Brown.
Until we read his views today, GermanyWatch was not a fan of Mr Brown. However, after reading his honesty on German links to the economic crisis, we have a new found respect for the man.
It seems Mr Brown is of a similar opinion to us- That Germany would like to crush the Anglo-American banking systems.
If only Mr Brown had been this honest when he was PM.
For another clue read Germany's Long Game?