From the wreck of the sovereign debt crisis Germany has unquestionably emerged as Europe’s pre-eminent power. And a central tenet of the German solution to the crisis – for it is primarily a German solution – is that other eurozone members must be recast in their mould of fiscal orthodoxy and financial conservatism. Debt is to be regarded as immoral; current account surpluses are de rigueur; all but marginal budget deficits will be punished; and financial innovation is to be throttled by regulation. What, fellow Europeans might ask, is the wellspring of this providentialism and homespun finance?

The usual explanation emphasises the traumatic experience of the 1920s Weimar inflation, which lingers in the German memory more than the slump that brought Hitler to power. There are nonetheless deeper factors at work, not the least the etymological link between debt and guilt in the German word schuld. The fear of currency debasement was entrenched long before the 20th century. Frederick the Great in the Seven Years War debauched the currency several times to fund the fighting. Note, too, that Goethe’s Faust Part II brilliantly describes the perils of inflation. Mephistopheles urges the emperor to use undiscovered gold beneath his lands as putative collateral for promissory notes to pay the army. When the emperor and his court find they can print money without restraint, their wild spending leads to an inflationary spiral and civil chaos.

This, from the man who served as privy councillor at the court in Weimar, was more than prescient, given that Germany had yet to acquire a note-issuing bank when the work was written. Goethe probably drew on experiences of revolutionary France. The National Assembly’s issue of assignats – certificates supposedly backed by the value of church properties confiscated in 1790 – ballooned out of control. Goethe’s masterpiece no doubt helped embed the anti-inflationary mentality in Germany’s educated class. It took the horrors of the first world war and its aftermath to induce the temporary lapse of memory under the Weimar Republic.