THANKS, W:

While it was indubitably fault lines in the American financial system had led to the crisis, Crashed also argues it was the speed and intensity of U.S. policymakers' response that ensured 2008 "did not result in a spectacular transatlantic crisis," with the economies of Britain and the Eurozone imploding completely. To save transatlantic finance the Fed licensed a core group of allied central bankers to issue dollar credits on demand: "Through this they pumped trillions of dollars of liquidity into the European banking system."

What is so jarring in Crashed is the contrast between American and German officials. "If we are looking for one crucial difference it is surely this," Tooze writes. "From the morning of September 11, 2001, America was a superpower at war." Whereas Bernanke, Geithner and Paulson knew they are imperial actors defending a financial system that ultimately undergirds American power, in chapter after chapter, we see Merkel and Schauble refusing to move.

This is a key point of Tooze's, and one worth ruminating on. The divergence in response to 2008 can be traced to how the decisions of 1991 were arrived at on either side of the Atlantic. Whereas the "liberal world order" was built to empower America, the Eurozone was built to constrain Germany. The French intention all along had been to federalize the newly united Germany just enough to prevent it from becoming an imposing hegemon. "Without a common currency," Mitterrand warned Thatcher in 1989, "we are all already subordinate to the Germans' will."

Thus, beginning in 2008, as America acted to preserve its global prerogative, we see Germans refusing to act, also to preserve their own power. At a crucial moment, America wants to remain hegemon while Germany refuses to be federalised--refuses to be the lender of last resort for its profligate European partners. "There will be no transfer union," Angela Merkel declared.

Though the European Union remained, symbolically and more, a political peace project, thereafter the Eurozone showed itself to be a conflict generator. The consequence of Germany's decision to not act was the exact mirror image of the Federal Reserve's aggressive moves--with near mirror image results. Europe's German and the Federal questions, fundamentally unanswered, were still causing trouble.

Instead of acting like the Fed in stabilizing allied economies, the ECB, squeezed by Berlin, dawdled. It showed little interest in getting involved in Central Europe. "One might have expected the ECB to extend similar support to the East European neighbors of the Eurozone," writes Tooze. But the Euro-swap lines never came. "Where the Fed had given the ECB the lifeline of dollar swap-lines," writes Tooze, "the ECB had no intention of extending equivalent privileges to Poland or Romania." Frankfurt's decision "shocked the Fed," which had expected Euro-swap lines to be extended to Poland and Hungary. But with their economies hit by a sudden stop in foreign credit supplies, all the ECB was willing to do was provide Poland and Hungary with short-term funding in exchange for first-class euro-denominated securities. "When the problem," writes Tooze, "was a shortage of euro funding, this was of no great help."

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