As Eurozone members one-by-one sink deeper into economic recession and default, anger is boiling up against Germany – one of the few nations capable of mitigating the ongoing crisis. Last week, an Italian newspaper owned by the brother of former Prime Minister Silvio Berlusconi referred to Germany and its Chancellor Angela Merkel as the “Fourth Reich.” The paper goes on to argue, “Since yesterday, Italy is no longer in Europe, it is in the Fourth Reich,” referring to the austerity policies that Germany has forced on other European nations in exchange for bailout money.
As we saw in Greece, extremist parties on both the Left and Right have seen remarkable gains at the polls. And like World War 1 proved to us all, economic desperation breeds extremism, which has the potential to tear Europe apart. If Germany, the European Central Bank, and the IMF insist on more austerity, they’re doing so at their own peril.