GERMANY TO THE REST OF EUROPE: HOLD YOUR TONGUE
As most people are probably aware, it is now Germany that is calling the shots in the financial crisis in Europe. And on this website I've been sounding warnings, as most of you who are regular readers here know. But in fairness, one should present the German side of the equation, which the Christian Science Monitor, courtesy of a Facebook friend, Mr. T.O., kindly shared with me:
Germany to Europe: Don't criticize us on eurocrisis leadership
The nub of Germany's criticism of the rest of Europe, and for that matter by implication, Britain and North America as well, is contained in these paragraphs:
"The world criticizes Germany for being strong, but not leading, in the euro crisis. Now, as we start to lead, we are criticized, if not demonized. We are called selfish or Nazis. But if we are to lead, we want to use our experience, our rules, and our models. That means an austerity policy favoring price stability and cutting debt. And we don't want to be rushed; we have domestic political hurdles to surmount. German voters don't want to pay for others' excesses. They were told when Germany joined the eurozone that they would not have to bail anyone out. This is basic.
"Our approach stresses responsibility and competitiveness. We keep wages low, build quality products, and export them for cash. We do not take a Keynesian view of stimulus; we rely on the neoliberal school of Hayek. Our distinctive German model emerged after the war from something called ordoliberalism, which stresses clear rules and fiscal rectitude. ("Ordo" comes from the Latin word for "order.")
"We are suspicious of the Anglo-Saxon model that has brought a global morass of financial instruments, debt, and excess. Washington and London are not our fiscal ideals. We take seriously the problem of moral hazard, where money is loaned with no guarantee of payback. Greece, which borrowed, spent, and hid its balance sheets, is a poster child for this hazard. The new EU "fiscal compact" agreed to in January will ensure it doesn't happen again. Germans can't afford to be left holding the bag for the rest of Europe. Germany is strong, but it is not that strong."
This, to me, is the real core issue, for Germany is expressly challenging the financial assumptions of the Angl0-American elite. Those assumptions are, as indicated, Keynesian at their core, and to that degree, the Germans are right to point out the following:
"And why doesn't anyone look more closely at our success? We are Europe's only real globalized export economy. We didn't have a housing bubble, debt bubble, or credit boom. We had few financial products to detoxify (and the bad ones came from the United States and Britain).
"Our policies have brought a good life and our situation is secure. Germany doesn't have an unemployment problem; it has a labor shortage! We have created 2 million jobs since 2000. Prices are stable. Germans are working harder. The retirement age has been increased from 65 to 67, while in Greece, some public workers retire at 52. There are very few German strikes. Germany benefits from a systematic approach to high-tech and industrial niche products. It stays competitive and fresh and plans to remain so. We make machines that Asian and South American firms are buying. We are busy. We do our homework. If others can't keep up, maybe they should look at how we do things."
To the criticism that Germany is breaking away from Europe, the end of the article makes it clear that it is not:
"Yes, we feel some frustration with Europe. Yes, we had a quiet but intense debate last year on whether Europe is dragging us down, and whether to align more closely with emerging global players, the so-called BRICS (Brazil, Russia, India, China, and South Africa), whom we voted with on Libya. But we realized that in a changing world, we need to stand with our friends and the ones we know best, and we closed that debate.
"We want Europe. Europe helps us avoid backsliding into authoritarianism and nationalism and helps stability. Europe is our main trading partner and, for crying out loud, we have spent 50 years in pursuit of European harmony and good citizenship. We want and deserve to be seen as "pro-Europe."
"But Berlin is starting to tire of attacks on Germany's efforts to solve Europe's problems. We believe deeply in austerity. It is a consensus supported by the German mainstream and the two large center parties.
"There is little chance the German view will change. So don't waste your time trying."
It is there that I tend to disagree. Germany will of course remain a European power and remain the predominant one. But historical memories, unfortunately, die hard, and for the Greeks and Italians in particular, those memories are bitter for obvious reasons. Then there is the added factor that I have often predicted would happen, and that is a growing rapprochement between the two powers that dominate Eastern Europe: Germany and Russia. As the later has been quite influential in bringing about the BRICS alliance, it is in my opinion inevitable that as Germany continues its buildup of global trade, it will gravitate increasingly into that orbit...
....and that will strain the European project, perhaps to the snapping point. It remains to be seen if German diplomacy is up to the subtleties of that challenge.
But in any case, the article makes a good point, namely, that Germany's criticisms of the rest of Europe and indeed the financial terpitude within the Anglosphere that led to this current mess is well justified. It isn't Germany that needs to hang its head, it's the rest of Europe.
One final thing...note that Germany, in the midst of this financial crisis, with less than half of the population of the USA, added 2,000,000 jobs.... compare that to our performance, and it would seem they have a point...
See you on the flip side...
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I would also add that the situation they are describing is missing s few facts – that a large part of the German recovery after WW2 was paid for by stolen loot and American money loaned through that very Anglo-American banking group which they criticize.
Also, Germany’s rise before WW2 was also paid for by American taxpayers and money from American firms.
The economic crises we are facing are not only the result of irresponsible spending – these crises are manufactured by an international cartel, and that German banks have been central in these schemes.
The strength of the German economy is not just the surface tale of hard work and proper spending. Twice in the last hundred years Germany has been the focal point of world wars, and both times events were driven by Austrian energy and people.
Hayek is the darling of the far right conservatives like Reagan and Thatcher, because he espouses the ideals of corporate fascism. He is also Austrian.
Germany has twice ravaged Europe, causing untold death and destruction – murder, theft and barbarism on a massive and disgusting scale. I sometimes question if it should have been allowed to continue to exist as a country at all. Why should they not shoulder a greater part of the burden of keeping Europe solvent? Should we all just forget what they have done in the past? Forgive the slaughter of tens of millions, two wasted decades, hundreds of billions of dollars wasted in war, because, after all, boys will be boys?
Those who fail to remember the past are condemned to repeat it.
To quote Churchill, “never, never, never, never give up.”
And we are repeating history Jon, is the Pax Americana any better? Have they not done the same? Do we forgive and forget the American empire, the British empire or the Soviet empire?
Blaming Germany alone for the two world wars is overly simplistic to me. After all it takes two to tango. Was Germany not pushed into war (just as everyone else) to satisfy the greed of the few at the top?
I couldn’t agree with you more-
“Was Germany not pushed into war (just as everyone else) to satisfy the greed of the few at the top?”
you nailed it-
Larry in Germany
The Norman-Americans slave junkie gamblers are getting their comeupence finally. These squnders have been caught with their pants down crying fowl they have themselves to blame. Their shortsightness greed bottom line has come back to bite them in the ass about time. All they the Norman-Americans care about is fighting endless losing wars and abuseing the poor and powerless bellow them. The Germans have proclaim a day of recordning over their misrule long overdue.
When I see Germany say “austerity” as the cure for what ails the Euro/North American finaacial crisis I have to think what they are in fact saying is “submission to authority”. Now refresh my memory, who won WWII?
Four names describes it all:
Europe has been infected with killer bees….the entire west has been.
Germany will likely act reluctant about joining the BRICS and slowly and stealthily take the dominate position among them while the Anglo/Saxon model is further sabatoged. Those of us who survive in the Anglo/Saxon sphere after what will be purposely unleashed to wear us down will likely be led into joining the BRICS led by the German model and if we still have a resistance they won’t be strong enough to resist take over by the humanitarian occupation by German led BRICS.
You know I hate to say I have a lot of fond memories of Germany but that was back in the 80’s before reunification. And for me it was a good exzperience and you can say what you will but it seemed to me they tend to do things “smart” and use the right tool for the right job. As bigger is not always better and they have a pretty good medical care and choices. And considering all the problems they had to deal with reunification from a lack of jobs to a surplus and closing various US bases. Even with the looting of the NAZI’s I would say they have done quite well. As I re-cal their military though seemingly lax in some ways were quite efficient and they understand teamwork and are cutting edge in a lot of green technology. I might ad they I believe still have an “active green party” which may be a big reason why and where many of their new jobs have come from. I also remember people having little “Garden Platz’s” like little gardens on the edge of the cities for inner city dwellers for growing their own fruits and vegetables but also it is like a peacful escape for weekend or free time. I wish we had this here in this country. We have parks but this is different they may even make their own beer or wine plus they have a connection to the land and nature. I could see this as a whole new or small cottage industry. I like to garden myself when I can but I cannot do it here.
Another thing to consider too is if Germany would join the BRICS alliance, I don’t think they would be seen as anti-Europe. I think the shock wave would re-shape politics throughout America and Europe. I can see these Anglo American elites, and these dirty rotten Republicrats becoming extinct, and a whole new political landscape emerging. Humanity might actually experience hope, instead of perpetual slavery and indebtedness, while you watch your job outsourced, and spend what little money you have on eating Monsanto GMOs, and drinking fluoride until you grow a tumor and drop dead.
I found that read to be refreshing!
Recall Germany and Russia just inaugurated a new pipeline which the UK is now rumored to perhaps join? Note the Berlusconi (backer of Sud Stream) link and trace back his closeness to Gadaffi and Putin. Scandal plagued and subsequently removed for Monti. Coincidence? Note also the Eni investigations in Libya (Eni partner in Russia pipeline deals). Draw your own conclusions.
Germany is susceptible to its weakest partner and don’t for a minute think the $IMF doesn’t realize this. After all its their system. Ergo the debates of German gold storage of late? Wasn’t there a parliamentary committee initiated recently to study such storage?
“The inauguration of elected Russian President Vladimir Putin will be attended, among others, by former Italian Prime Minister Silvio Berlusconi and ex-German Chancellor Gerhard Schroeder. The information was released by head of the department of Presidential affairs Vladimir Kozhin.”
They kept their production and innovation right where it was when everyone else was in a mad dash to China and buying into Wall Street’s disastrous housing scheme. They got it right. Cool of you to point that out
However from a purely political viewpoint, always at odds with the reality of regular people, they could still loose some (perceived) credibility because of Mr. Sarkozy and his highly populist efforts to get another term as President of France.
I doubt it will last, though 🙂 One wonders if Germany at some point will express similar doubts about the state of the Anglo-American dominated energy cartels and start saying things like “cold fusion”, doesn’t one?
Yes indeed. Cold Fusion would be outstanding! Maybe they will roll out a Bell too!! Some flying wings that can open up a hyperspace window would be very exciting!!! I say we put Germany and Russia at the helm, and screw these Babylonians that just want to ruin countries financially, and bomb everything else into the ground. Lets quit piddling around on this speck of dust and start exploring space for crying out loud!