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Opinion

Germany needs to free itself from the shackles of history

December 12, 2011 11:20
3 min read

It is a mere scrap of paper, as brief as a shopping list. "Ten uses for money" is written at the top with helpful hints as to what Germans can do with their Reichsmarks: wallpaper their living rooms, burn them as winter fuel, use them to prop up broken chairs.

My Weimar-era memento, fished out of a Berlin flea market, may have had satiric intent when it was written. But Germans still find it difficult to laugh at the hyper-inflation of the 1920s, when their banknotes were carried in wheelbarrows rather than purses.

The dull throb of anxiety colouring Chancellor Angela Merkel's much-lamented, much-mocked indecisiveness in the Euro crisis is that rampant inflation makes for dangerous politics.

In Germany, at least, loss of faith in the currency led to loss of trust in the political class - and thus paved the way for Hitler's rise. All modern German fiscal policy seems to be informed by this fear: the rigour of the Bundesbank, its strict political independence. Any crack in the fortress walls of the central bank, it seems, could open the way for the return of the inflationary dragon.