The Hour of Parole

Whether or not the “chemistry” between Chancellor Merkel and President Obama works is not negligible, even in times when the scope of government actions is limited. Good personal understanding helps allies work around disagreements. Missing the connection because of disagreements can cause them to turn toxic — like in the German-American debate over the proper fiscal and credit policies.

It is true that even former presidents and chancellors engaged in vague battles on (un)reasonable growth strategies, but the recent dispute between Washington and Berlin was of rare clarity. That the president would start, openly and before the beginning of the G-20 meetings, a German-American confrontation on the topic of the Chinese-American currency dispute [was something that] could have been avoided.

The chancellor is right on this point: The American call to limit the current trade surplus doesn’t work in a free world economy. Ms. Merkel is also right not to give into Obama. Naturally, all countries need to do their part, so that the world economy grows slowly, and the Americans alone can’t (and won’t) pull the cart out of the mud. However, misgivings about the chosen way are justified, because of the causes of the crisis.

Arguments of the resolute chancellor to the domestically weakened president stated that this way only applies if the problem is the most pressing for Germany, the U.S., and in particular, for the other gathered states in Seoul. Remember, it was a banality, but clearly noteworthy now, that a few emerging and developing countries have already overcome the crisis, while others are still struggling with both its financial and political effects.

The Main Points

• G-20 Summit in Seoul: Big Smiles, Little Compromise

• G-20 Summit: U.S. Isolated in Seoul

• Greenspan and King Hold China Responsible for Imbalance

• America Wants Targets for Trade Balance

• The Thesis of the Global Imbalance is Controversial

Perhaps now the G-20 has come to the moment of truth. This format for a global economic coordination shouldn’t be glorified; that would be running in circles. When the summit efforts are to be undertaken, all participants should strive for the same goal. Otherwise, they can just shut it down.