Hold on to your hats, folks. Great Britain's Daily Torygraph...er... Daily Telegraph, has weighed in with an op-ed piece regarding the "austerity" program that Germany has been trying to impose on the so-called southern European "PIGS" nations - Portugal, Italy, Greece, and Spain - via the experiment in the same in Greece. The process there, as most know, has amounted to nothing less than an orchestrated looting of that country, and the result, as I indicated in last week's News and Views from the Nefarium, has been what I have called the "Thermopylae-Salamis Moment" of modern European history, as once again Greece, through its election of the Syriza government, has served up a modern-update of those two battles against the Empire of the day: Persia. Once again, Greece is resisting the Empire.
But, there are some subtle "catches" here, and they concern Germany, its relationship to the wider European "community," and some tough choices:
Now, the headline here is a bit disingenuous in that British sort of way of being disingenuous, not by deliberately lying, but by omitting another inconvenient truth, for the Germans were not the only ones wary of the single currency experiment. Mrs. Thatcher, during her premiership, had similar reservations and was quite vocal about them(after all, she was Mrs. Thatcher), and she wasn't alone. There was opposition to the whole scheme, even across party lines in some cases, until the feckless Mr. Major succeeded her and wrangled Britain's entry into the European "Union," thereby abandoning centuries of standard diplomatic practice by that nation vis-a-vis continental politics.
That said, there's a lot in this article to ponder. Consider first these thoughts:
"Germans never wanted the single currency in the first place, for like Britain, they instinctively understood where it would lead – to a fiscal, or transfer, union which Germany, as Europe’s dominant economy, would be forced to bankroll. If given a referendum, they’d have said no.
"But European monetary union was the price Germany had to pay for reunification; it was a way, other European nations naively believed, of containing the newly enlarged country and ensuring that it was properly integrated into the rest of Europe. To them, it seemed the answer to Europe's historic problem - Germany was too large and economically powerful ever to be properly defeated, but the potential threat it poses to the rest of Europe could perhaps be defused through economic integration. Most Germans, now a peace loving people, broadly go along with this "solution" to the problem. The point of dispute is rather about the degree of integration."(Emphasis added)
True enough, most Germans, as most French, Italians, Poles, Britons, are quite fed up with the idea of continental wars, but it should be recalled that the German Foreign Minister, Frank-Walther Steinmeir did give that little speech in Berlin in the past few weeks calling for a greater militarization of Germany's foreign policy. As I argued then, the German business and financial elites are growing uneasy and are wary of American ability to protect those interests. Or to put it differently, Steinmeir's remarks might be interpreted to mean that some in the higher reaches of power in that country are considering a "bolt" from the whole European mess.
That, of course, sounds absurd and radical, indeed, something not even to be considered.
Except, The Telegraph appears to be considering it:
"To buttress itself against economic pollution from the south, Germany surrounded the new currency and its institutions with safeguards. Fiscal and monetary transfers between nations were specifically banned, and rules were put in place that would supposedly ensure fiscal discipline. None of them has proved equal to the task, and none of them is ultimately compatible with a single currency that actually works.
"Since the onset of the financial crisis, Germany has suffered one defeat after another. Every line in the sand has been breached, culminating last week in the Bundesbank’s failure to block ECB money printing, a remedy which may or may not have some merit for the beleaguered economies of the south but is culturally anathema to Germans as well as largely inappropriate for their economy. It's also a money transfer by the backdoor.
"The bottom line is that the single currency hasn’t worked for anyone. It’s proved as unsatisfactory for Germany as it has for Greece, Spain and Italy."(Emphasis added)
So what's the solution? The Telegraph sees but two:
"From the start of the crisis it has been obvious to all dispassionate observers that it can only really end in two ways. Either the eurozone must move rapidly towards the sort of transfer union which Germany has spent the last 15 years resisting, or it must be reconstituted in more sustainable form – that is the monetary separation of Germany and its satellites from the less competitive south, arguably including France.
"European elites have been in a state of denial about this choice, with their response to the crisis characterised by grudging incrementalism. There are too many egos, too many careers and too much vested interest bound up in it all to admit the reality."(All emphases added)
Look at that second alternative highlighted in bold italics above very carefully, for what that effectively means is that Germany would pull out of the euro, while perhaps retaining the old "Common Market" principles of open borders with other European nations, while it returned to the Deutschmark, and continued its economic domination of the Czech republic and eastern Europe, its "satellites" as the Telegraph would have it. But that, of course, isn't in the technocratic playbook, so the Telegraph is opting for this:
"Germany as much as Greece - virtually the whole of Europe, managed to deceive itself when the euro was formed. Everyone feels bruised and wronged by the experience. To blame disciplinarian Germans is as pointless as profligate Greeks. It is half-formed monetary union which is the problem, not the wicked Germans, and it has proved a catastrophe for all involved"(Emphasis added)
In other words, the Telegraph is proffering an updated version of the Brussels line: "Just let us tinker with it a bit more, integrate more fully, and all will be well."
So for the moment, expect Berlin to go along with this plan. But the reality is not one of degree, it is one of unreality: the idea itself is to blame, not half-hearted or any other fractional-hearted implementation of the whole technocratic scheme. In the long term, in other words, the EU and the euro, are destined to unravel in the realities of different cultures and geopolitical and financial interests. And perhaps that was what was really behind Herr Steinmeir's rather stunning speech at the end of last year.
So what might one expect? Well, I suspect one may expect that the EU will seek to prevent Greece from accepting financial aid from the Russians - and thereby weaken its NATO commitments - at all costs. The Germans will have to go along with this, and continue to bankroll the southern tier. But they cannot do it forever, and this will inevitably pressure that country to take the second alternative that the Telegraph mentioned: Monetary separation of Germany and its satellites.
And that will put the French into the driver's seat of what's left, until they too are fed up with it. Which will leave the British, until... and then the Italians until...
You get the idea...
See you on the flip side.
(Thanks to Mr. S.D. for finding and sharing this one with us!)