German Chancellor Angela "Frau Fritz" Merkel is trying to run the eurozone like some combination of the Soviet Union running the Warsaw Pact and West Germany absorbing East Germany. It isn't working out well. Augustein writes, "Merkel's idea of European integration is simply that Europe should bend to Germany's political will." Not a promising approach.
European leaders are showing 1914 levels of foresight and responsibility. The good news: there aren't Austrian archdukes left for anybody to assassinate.
President Anastasiades explains "painful" bailout decision in TV address Euronews 03/25/2013:
For Augstein, "Cyprus has shown once again that Europe can't rely on the Germans."
As the Cyprus ordeal intensified, a truth about German politics was revealed: They are characterized by a stubbornness that Germans see as sticking to their principles, but what is in fact nothing more than self-righteousness. With her European political maneuvering, Merkel has broken all West German traditions. And she did so with less squeamishness than she had in breaking the traditions of her own party. Merkel's chief adviser for European affairs, Nikolaus Meyer-Landrut, laid it out for her in the summer of 2011. Everything for which Brussels is responsible works just fine, he told her, while areas that fall to member states are in disarray. Thus it would be logical to grant Brussels more power. But Merkel decided otherwise.I do think in some important way Frau Fritz' background growing up in Communist East Germany shaped her conduct now. The Warsaw Pact alliance was what she was immediately familiar with growing up, although she was privately disturbed by the 1968 Warsaw Pact invasion of Czechoslovakia.
Under Angela Merkel's leadership, the Europe of nation states has been revived -- a trend against which former Chancellor Helmut Schmidt issued a stark warning. "The German Federal Constitutional Court, the Bundesbank and Chancellor Merkel are acting like the center of Europe, to the exasperation of our neighbors," he said, and a portion of the public opinion is prone to a "national-egotistical view" of Germany. Schmidt, who lived through all of Nazi Germany and World War II, is not one to use these words lightly. [my emphasis]
Also, though Augstein remarks somewhat bitterly it seems to me, "Historical memory is essentially wiped away, good for little more than cozy evenings when we wrap ourselves in blankets and ogle at the moral failures depicted in World War II TV dramas, like the recent German miniseries 'Our Mothers, Our Fathers.'" But in fact, overcoming the legacy of Nazi Germany was fundamental to the identity of the Federal Republic, which meant West Germany until 1990, when the former East Germany merged into it. That was true even though both the Christian Democrats and the Social Democrats could have been more consequent in de-Nazifying the government, e.g., clearing out some of the stone conservative judges in the courts. And from Auschwitz trials in the 1960s to various events and memorials that involved examining and re-examing the Nazi period, West German leaders like Schmidt had a greater sense that Frau Fritz has of the importance of European unity for the purposes of promoting democracy and peace.
The official East German position was that the Nazi regime was the fault of the capitalists and the monopolists, which was true enough as far as it went. But the sense of collective responsibility captured in West Germany in the now cliched saying, "there's no such thing as collective guilt but there is collective responsibility," was by most accounts notably lacking in East Germany. And whatever role that plays in her attitude, the EU goals of democracy and peace are for Frau Fritz entirely subordinate to squeezing every short-term national advantage she can out of the euro currency.
The euro works well for Germany. Germany is in a currency union with less wealth countries with slower growth rates. The value of a currency is driven by all the participants. New York and Louisiana, California and South Carolina, the entire economy of the US drives the value of the dollar. The same is true in the eurozone. Sharing a currency with Greece, Spain and Italy means that the euro is cheaper than a separate German mark would be. Germany's economy is heavily export-oriented, and the value of the euro boosts their exports compared to what a more expensive mark would do. To maintain that currency, the eurozone would have to become a real transfer union as well, so that instead of imposing extreme austerity policies on countries like Cyprus or Portugal or the other that encounter major financial difficulties, they would subsidize measures to stimulate those economies. Something Frau Fritz has absolutely no intention of doing, just the opposite. Right now, Germany is getting the benefits of a cheap currency boosting their exports without the level of expenditures that are actually needed to significantly reduce the economic disparities between the richer and poorer countries in the common currency.
So things don't seem so bad in Germany as in Italy or Spain or Ireland. And German politicians and much of the public is experiencing their own version of "why do they hate us?" that strikes us Americans periodically.
Severin Weiland und Philipp Wittrock report ing Deutschland und die Euro-Krise: Wut auf die Retter Spiegel Online 25.03.2013 describe the tone of the resentments, "Hass schlägt ihnen [Merkel and Finance Minister Wolfgang Schäuble] entgegen, weil sie, angeblich getrieben von teutonischen Allmachtsphantasien, ihr Spardiktat in ganz Europa durchsetzen würden - ohne Rücksicht auf Verluste." Hatred strikes [Merkel and Finance Minister Wolfgang Schäuble] because they, allegedly driven by Teutonic fantasies of being all-powerful, want to push their savings diktat [austerity policies] through in all of Europe - without regard for the losses."
Sven Böll et al in another Spiegel International piece Lessons from Cyprus: Euro Crisis Poses Grave Dangers to EU Unity 25.03.2013 basically buys the austerity-is-working, gee, look at all the nice things they've done in those lesser countries, like cutting the minimum wage in Greece, Spain made it easier to fire people, and Portugal reduced people's vacations. These things, you see, are "reforms" that improve competitiveness. Then comes the mystified "why do they hate us?" response:
The problem is that while Europe has become more economically harmonized, it is drifting apart politically. The reforms have made the southern part of the continent more competitive, but people are not necessarily benefiting from these economic successes. On the contrary, unemployment remains at record high levels, and poverty is on the rise. At the most recent EU summit, outgoing Italian Prime Minister Mario Monti spoke of a "time lag."Gol-lee! Slamming down people's incomes, driving up unemployment pursuing contractionary policies during a depression get people upset! And it can even generate political turmoil? How could we Germans have ever thought such things might happen?
Monti knows what he's talking about. After all, that time lag explains why he was unceremoniously voted out of office a month ago. Monti claims that, even though he explained his policies at length, anti-European forces won the Italian elections.
Yet people are turning away from Europe in almost all countries that have suffered economic upheaval recently. Anti-austerity protests are increasing again in Greece, even though the government hasn't even implemented certain reforms yet. Social conflict is likewise on the increase in Spain, where half of all young people are now unemployed and the government of Prime Minister Mariano Rajoy is under fire because of a corruption scandal. In France, President François Hollande has seen his popularity drop to a new low -- to the point that he has been overtaken in the polls by Marine Le Pen, head of the far-right National Front. [my emphasis]
Böll et al also observe, "German Chancellor Merkel has likewise not emerged unscathed. In much of Europe, her image is that of an overbearing, heartless know-it-all who cares little for the suffering of average people."
How long before German politicians start whining, "They hate us for our values." And, "I don't know how people can hate us, because I know the Germans and we're so good!" They can invite George W. Bush over to give them training. Except he doesn't speak German. And, oh yeah, he can't really travel to Europe for fear of being busted for war crimes and torture.
Tags: angela merkel, austerity economics, cyprus, eu, euro, european union