Nils Gilman compares the German-led push for austerity to the U.S. response to the Latin American debt crises of the 1980s. Then as now, creditor states agree to let debtors restructure debt in exchange for structural reforms. According to Gilman, the debtor countries bear a disproportionate burden of adjustment.
The issue with Gilman’s view is that most Germans still do not feel like peripheral countries have done enough to merit successive bailouts. And yet the bailouts continue anyway. So are the Germans really getting their way in the Eurozone at the expense of the periphery, or are they in so deep because of their national banking system’s exposure to peripheral debt that while they might talk a tough game about structural reforms and austerity, they will eventually capitulate and unconditionally bailout the periphery?