The Euro was designed to remove the monetary autonomy of german competitors. Giving german exporters (the heart of the german economy) a weaker stable new currency without the exchange risk.
UK has a gigantic total debt as a share of GDP. If they were deprived of monetary auonomy or its financial sector was heavily regulated, they would be in worse shape than Ireland, Spain and Italy.
There is no doubt between the german and the british model. The german way is far superior: they´re the last true anti-keynesian nation. But the rest of the Eurozone cannot afford those german monetary and fiscal rigor. If confidence is not back in markets we are moving into a deadly spiral of recession and cuts in Europe.
Germany passed a constitutional balanced budget amendment in 2009, in the worst moment of the crisis. They will balance the budget in 2012. Believe it or not, it was a socialist government who cut the corporate tax rate from 60 to 30% in 10 years (with a federal tax rate as low as 15%). It was a socialist government who cut from 45 to 42% the top tax rate on personal income. And it was a socialist government who passed the most radical welfare and labor reform (in the sense of more autonomy for companies) in recent german history.
Germany radically opposes that the European Central Banks becomes another Fed or BoE massively printing and monetizing public debt. Germany says that such intervention creates a moral hazard and hides the true structural causes of the crisis: too much debt (both private and public) and the lack of reforms.
They´re 100% right. And they´re truly admirable. But its time to admit that most Europe cannot follow them.
The German model is socialism through ridiculous subsidies, with national defense paid for by the US and the UK. Time to end their free ride. The only reason they have a relatively modest deficit is because they spend almost nothing to defend themselves relative to their GDP.