During the early stages of the sovereign debt crisis in 2008, Angela Merkel’s German government resisted bailing out the periphery countries of the eurozone, especially Greece and Italy. German commentary at the time suggested that the people of Southern Europe were lazy. Ultimately, however, Germany did support the European Central Bank’s rescue legislation. Why the shift?

Largely because Germany’s economy is export-dependent. Berlin wanted to sustain its export markets across Southern Europe. But it knew that the collapse of the euro would mean the reintroduction of the German deutsche mark. The value of the deutsche mark would have been significantly higher than the euro. Germany’s exporters would thus have been at a comparative disadvantage.