Planet Money
12:01 am
Fri October 21, 2011

France And Germany: A Love Story

France and Germany are trying to come up with a bailout plan for Europe. This isn't the first time they've fought over money.

Like any bickering couple, they've spent centuries fighting over finances. In fact, the history of their relationship is so dramatic — so theatrical — it's best to tell it in song.

(Read the lyrics, and see the credits, here.)

Our story begins in 1870.

France and Germany — aka Prussia — were an unlikely couple. France was a glittery homecoming queen; Prussia was a scrappy neighborhood kid.

When they got into an argument about the Spanish throne, France decided to teach Prussia a lesson.

"It was really a war by accident," says historian David Marsh.

The Franco-Prussian war lasted just one year. France got crushed.

"France is still trying to get over that humiliation to this day," Marsh says. "Because that did actually mark the birth of a new Germany."

Germany made France pay reparations — five billion gold francs. And even today, if you walk around Berlin — you see that French money everywhere.

Berlin's iconic Victory Column, as well as the Reischtag were built with French money. But most galling of all to the French, according to historian Carl-Ludwig Holtfrerich, was the gold they couldn't see: Money Germany set aside as a war chest.

A war chest!

The Germans took some of the reparations gold, and stored it in a castle. And it just sat there, waiting to be spent if there was another war.

Of course, there was another war. And another after that — World Wars I and II. But this time, Germany lost, and had to pay massive reparations.

After World War II, the pair started thinking. Instead of fighting, maybe we should consider dating. instead of passing all this money back and forth, let's just split the check. They started with their coal and steel industries.

"I think the French knew it wouldn't be possible to keep the Germans down for too long, and indeed, that wasn't the idea," David Marsh says. "The idea was to have a strong, vibrant Germany at the heart of a new Europe."

They still fought about money. France was really pushing for a common currency. Germany was very attached to their deutschemark.

The bickering might have continued forever, but the power dynamics changed. In 1989, the Berlin wall fell, and Germany re-unified. And for France, the old feelings came back.

"Suddenly, France sees this rather troublesome, rather unquiet, Eastern neighbor acquiring 20 million people and appearing to be politically and economically much more dominant," Marsh says.

France sat Germany down and basically said "Look: If you're gonna be the biggest economy in Europe, you have to give up your currency."

So, in 1992, the euro was born.

Now, nearly 20 years later, the euro is in trouble. Tensions are high. But you don't see Germany blaming France for pushing them into the euro.

"It's very much against the modern genetic engineering of the Germans to want to appear to be too overtly dominant in public — particularly vis-a-vis the French," Marsh says. "That makes the whole thing unusually complex, psychologically."

Not to mention all of the legal, political, and financial entaglements. France and Germany can't leave the euro.

Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.