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Are the German People about to Ditch Carrying the EU on their Backs?

 
 
Reply Wed 17 Aug, 2011 11:11 pm
Quote:
Ulrike Guerot, a senior fellow at the European Council on Foreign Relations, said Merkel cannot commit more money to the euro crisis without risking an open fracture between haves and have-nots in Germany. In recent years, Guerot said, “there have been extensive gains but they have been unevenly distributed.”

Not what we signed up for

Germans joined the currency union a decade ago with some trepidation. They feared they could be stuck with the bill for other, less-productive economies in Europe and insisted on a “no bailouts” clause in the treaty establishing the union.

That clause was circumvented when European leaders created the recent emergency loan program. They said it was allowed under the section authorizing countries to aid each other in the case of natural disaster. The program is being challenged in the German courts.

“You can say it is better to share,” Guerot said, but “people will argue this is not what we signed up for: ‘We have options. We can go global alone.’­ ”

Those resentments are a reason some of the proposed “once and for all” solutions to Europe’s problems could be out of reach.

Consider the eurobond. It is elegant in theory — a form of debt issued in the name of all 17 countries and backed by the economic resources of a major industrial region. Advocates say a eurobond would rival U.S. Treasury bonds, in the size of their potential market and their perceived safety as an investment, and — in a stroke — wipe away concerns about the riskiness of government debt in Europe.

But this would also represent an all-in bet by Germany, with its fortunes rising and falling with those of Greece, Ireland, Italy and other troubled economies. That is seen here as a recipe for higher interest rates. Local business publications have estimated that Germany, which pays record-low interest rates to borrow money, might have to ante up $45 billion a year more for its share of the debt service on eurobonds.

And there is an array of thorny questions: How much to issue each year? Who gets the proceeds? How to make sure the money is properly spent?

In a recent interview in Der Spiegel magazine, finance minister Wolfgang Schauble said that if such a bond were created, it could come at the end of a long process during which, in effect, Europe’s nations would submit their sovereign spending power to a common financial authority.

At their meeting in Paris, Merkel and Sarkozy suggested the start of this process. They reached agreement that the two countries would confer more closely on tax policy and encourage the other euro countries to meet more regularly on economic policy. A new euro-zone council would be established, with still-undefined powers for its president.

Without deep coordination, said Deutsche Bank economist Thomas Mayer, eurobonds and other expansive changes are unlikely, for a familiar reason.

“Germany taxpayers would be responsible for spending decisions in other country’s parliaments. You cannot do that without consequence,” he said. “You’d see a movement in the northern European countries that would be a true successor of the American tea party.

http://www.washingtonpost.com/business/economy/in-euro-zone-crisis-german-leadership-is-fatigued-by-reform/2011/08/17/gIQA6PXoLJ_story_1.html

I have long wondered if they would get to this point after 2 decades of paying first for unification than then for the adopting of the Euro (that in partnership with the French, who are now tapped out...Broke). Many commentators are wondering these days how much more bill paying for others the Germans are willing to put up with. I am thinking that they are about done...and that emotional blackmail of claiming that they will be responsible for the crash of the global economic system will not work to stop them from pulling the plug.
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Foofie
 
  0  
Reply Thu 18 Aug, 2011 09:29 am
Any agreement that Germany makes with the EU could be officiated in the railroad car where the Treaty of Versailles was signed. This might offer the perspective that Germany just keeps paying, and paying and paying, for a multitude of reasons. In my own opinion, much of Germany's problems from the 20th century to the present might be based on the underlying desire to be the proverbial "big kid on the block." The question might be for a political scientist whether there has been a German national characteristic, that desires to be an "alpha" country, even though nationhood only came in the late nineteenth century?
engineer
 
  1  
Reply Thu 18 Aug, 2011 09:38 am
@Foofie,
Quote:
Any agreement that Germany makes with the EU could be officiated in the railroad car where the Treaty of Versailles was signed.


That car was destroyed.

Quote:
The Treaty of Versailles was signed in a rail car, which was kept as a monument in France for many years. Roughly 22 years later, in June of 1940, Hitler made the French sign their surrender in that same rail car. Four years later, just before the Allies liberated France, Hitler had the rail car monument dynamited and destroyed to prevent the French from making Germany sign another treaty in there.
Foofie
 
  -1  
Reply Thu 18 Aug, 2011 09:55 am
@engineer,
Well, even without the railroad car, Germany might be seeing the recurring theme that Germany has been treated like a never ending source of money. Whether for reparations (France after WWI, Jewish families after WWII), putting East Germany back on its feet, inducing Turkish guest workers to return to Turkey, and today helping the less wealthy EU nations. If I didn't know better, I might start thinking a portion of the world believes Germany is the proverbial wealthy Jew that becomes a philanthropist after accumulating wealth? There might be some sort of macabre humor here?
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hawkeye10
 
  -2  
Reply Thu 18 Aug, 2011 12:25 pm
@Foofie,
I am thinking that one of the main motivations of the Germans in financing the EU has been guilt over the Nazi's, so it would be ironic if they work themselves back into the economic and social conditions that birthed Hitler. But this is interesting even if that does not happen, the German sense that they have been played for suckers, both by the rest of the EU and by their leaders, seems to be strong now. This will not end well.
hawkeye10
 
  1  
Reply Sun 21 Aug, 2011 12:08 pm
The Germans today firmly rejected the call for EuroBonds, which would be the diving deeper into union but also would mean that the Germans would guarrenty the bonds for all of the EU which is a non-starter with the German people. In all likelihood the markets will sell off on this news.
0 Replies
 
hawkeye10
 
  1  
Reply Mon 22 Aug, 2011 08:19 pm
@hawkeye10,
Why Germany might let Europe fall

By Fareed Zakaria,

Quote:
This is the moment of truth for Europe.
For the last year or so, the Europeans have repeatedly produced workable compromises that kicked the can forward. They hoped these compromises would quiet the markets.
This strategy was often quite successful. Europeans kept promising, “Yes, we are going to bail out the weaker countries with the greatest debt load, but we want some structural reforms in return. And as we get more structural reforms, we’ll bail them out more. And if the crisis seems more intense, we’ll bail them out again.”
The Europeans repeatedly produced packages that were enough to satisfy the markets. Their hope was that at some point concerns would dampen down and then in the quiet of the night they could allow a country like Greece to soft default - a restructuring that doesn't spook everyone and doesn’t become a Lehman Brothers-like event. They sought a quiet reshuffling of debt.
I think this soft landing has now become impossible.
Today what people are basically asking is: “Is Europe’s debt going to be centralized or not?” In other words, is Europe going to be willing to say, “All our debt is pooled together and theoretically, as a single entity, we’ll pay it back.”
The key to this commitment is Germany. Germany is the only country that can pay.
But Germany is increasingly reluctant to do so. What we're watching is the rise of a new, ‘normal’ Germany, which in turn will lead to the unraveling of the old, highly unnatural structure of Europe.
The old structure of Europe rested on an extraordinary degree of German abnegation of its own interests. The Germans believed their national interest lay in subordinating itself in every way to Europe’s broader interest. That was what Europe was built on.
That’s why when you go to Brussels to the European Union you find a French-run affair with Germany’s money - a German-financed, French-run organization.
That has changed. The Germans, 60-years after World War II, are understandably becoming a more normal country. They are deeply, purely European but they are not going to pursue Europe’s interests at the expense of their own.
Despite what people say, Angela Merkel has been extraordinarily willing to bail out weaker states in Europe. Obviously, she's tried to get a good deal in terms of forcing some structural reforms in Greece and places like that. But the real story is that she did this despite German public opinion, which is now 75% opposed to any kind of bailout. This German opposition to bailouts will surely remain going forward.
And if that is the trend going forward, the Europeans are going to have a very, very big problem. There really is no way you can make the numbers work without a much more substantial German commitment of resources than there is now. If that doesn’t come through, it’s very difficult to see how the euro in its current form survives.
The key to Europe’s future is how Germany conceives of its interests. If it does so in a way that would be perfectly normal (it is important to emphasize there is nothing scary about Germany simply saying that it wants to do what’s right for Germany as well as Europe rather than always putting Europe above Germany) this might be the end of Europe as we've known it. It might be the end of Europe as a constructed, political entity built and supported by key nations, particularly Germany, no matter the cost.

http://globalpublicsquare.blogs.cnn.com/2011/08/18/why-germany-might-let-europe-fall/
0 Replies
 
Foofie
 
  1  
Reply Fri 26 Aug, 2011 09:06 am
@hawkeye10,
hawkeye10 wrote:

I am thinking that one of the main motivations of the Germans in financing the EU has been guilt over the Nazi's, so it would be ironic if they work themselves back into the economic and social conditions that birthed Hitler. But this is interesting even if that does not happen, the German sense that they have been played for suckers, both by the rest of the EU and by their leaders, seems to be strong now. This will not end well.


In my own opinion, Germany does not feel "real" guilt, or at least remorse over the Nazis. "German guilt" has been promulgated, I believe, as to what Germany feels, but that, in my opinion, reflects the largesse of the Allies, to allow Germany to have re-entered the family of world nations. Germany has collectively rationalized WWII, again in my opinion, based on the excessive reparations of the Versailles Treaty, and the fact that the country felt a great collective humiliation after WWI. Why they should feel such humiliation after WWI, considering it was only logical that they could not win with the fresh American troops that joined in? Perhaps, there is something in the German character that has an over-inflated opinion of its identity? What I am trying to say is that the Nazis could not have "sold" the Nazi message, I believe, unless there was an audience that felt that Germany had a "place in the sun," so to speak, that it was denied by losing WWI. Scapegoating Jews, Gypsies and the whole racial purity schtick, was just a way to give credence to the myth that Germany was to be the proverbial "drum major" for the world, or at least first Europe.

The EU, from Germany's perspective, in my opinion, was a way to have hegemony over Europe, without the guns and bullets. In other words, Germany does not want to be a small nation, I believe.

Perhaps, what Germany has remorse over is the lingering paranoia of the world towards Germany, since WWII.

Also, in high school we were taught that the hyper-inflaction during the Weimar Republic gave impetus to Germans listening to the Nazi message. Well, was that hyper-inflation (printing more money) done to pay the WWI reparations with cheap dollars? If so, someone in the government could easily realize that while the reparations were being paid back with cheap dollars, the average German was starving to buy a loaf of bread. So, the snowball was pushed down the hill, so to speak, by the Weimar government. Did someone want the Nazi message to be accepted, aside from the Nazis? Who would benefit?

So, let's say the collective German character does not suffer from a superiority complex (i.e., the great humiliation for losing WWI), does it believe that it is unique amongst the European national characters? In effect, I am wondering whether there is a specific characteristic within the German national character that then explains logically why the Nazis came into power, and the country bought the mythology and the world goal, with all that was then necessary to sacrifice to achieve it?

But, the use of the word "guilt" is used too casually, I believe. To have guilt, one must also have remorse, I believe. Has there really been remorse over the loss of the "German Jewish" community that lived in Germany for at least 500 years? Or, was it a sigh of collective relief that they were not competing (from the German perspective) with a community that seemed like an almost too good contender?
hawkeye10
 
  1  
Reply Fri 26 Aug, 2011 01:44 pm
@Foofie,
Interesting...so under your theory what accounts for the Germans being so aggressive about making sure that no one speaks well of the Nazi's, and that no physical traces are left that could be used as a shrine to the Nazi's?? Is this a sweeping under the rug attempt? They want to make sure that no one ever needs to talk about the Nazi's and what happened? If so the outrageous attempts to make corporations pay reparations to the kin of the killed Jews seems to make no sense. That the Germans feel the same guilt that the Japs feel seems much more likely.
Foofie
 
  1  
Reply Sat 27 Aug, 2011 06:11 pm
@hawkeye10,
hawkeye10 wrote:

Interesting...so under your theory what accounts for the Germans being so aggressive about making sure that no one speaks well of the Nazi's, and that no physical traces are left that could be used as a shrine to the Nazi's?? Is this a sweeping under the rug attempt? They want to make sure that no one ever needs to talk about the Nazi's and what happened? If so the outrageous attempts to make corporations pay reparations to the kin of the killed Jews seems to make no sense. That the Germans feel the same guilt that the Japs feel seems much more likely.


I didn't know that Japan felt guilt for their aggressive behavior before and during WWII?

In my opinion, the reparations to Jewish families, regardless of who paid the reparations, was to show the world that Germany had guilt. Also, in my mind I find it interesting that paying money for their atrocities made sense to Germany, considering one of the Nazi (or generic anti-Semitic beliefs) is that Jews are so money hungry, money will appease Jews.

My incredulousness regarding the standard explanations for the Nazi anti-Semitic rhetoric, or post Nazi guilt, starts from the initial promulgated thought that the Nazis "scapegoated" Jews. Even though that is true, it glosses over what I believe, in my opinion, is the real explanation. That being that the Nazi rhetoric projected onto the Jews all the negative traits the Nazis could not admit that any good German could have. In effect, only the Jew was money hungry, while today Germany is quite happy to be the wealthiest industrial country in Europe. The "Jew" did not want to serve Germany in war; today Germany is not running to join in with combat troops in the war against terror. The Jew was the "International Jew" that spoke more than one language well; today Germans learn English in grade school. I could go on (like Jews were clannish, yet Germany pays Turkish guest workers to leave Germany after generations in Germany), but the point is that Germans have somehow morphed into Jews, in my opinion. Well, they didn't morph, I believe; they always had those traits, but during the Nazi regime, Germany projected those traits onto Jews, as negatives.

So, we do not hear this psychological explanation as to why Jews were scapegoated. The inference being that the Nazis just were showing the standard anti-Semitism of Europe. I tend to believe the purpose of the scapegoating went deeper psychologically. And, since the rest of the world wants Germany to remain a benign nation, no one wants to pour salt into their wound (of losing both world wars), I believe.

My point is that while people, who do not consider themselves anti-Semites, might still think there is something about the Jewish culture that makes Jews seem different than the average Gentile, few today are willing to broach the thought that there may be something about the German culture that makes Germans different than other Europeans. I have to wonder if there is something about the German culture that might make Germans different than other Europeans. If I was to guess, it might be a degree of national/cultural pride that does not have the centuries of empire (France, Britain, Spain) that other European countries enjoy. In the way of analogy, Germany never had the orgasm of empire that other European powers had. Sort of like when old men look back at their youthful sowing their wild oats. Germany never had a youth that sowed wild oats, and their attempt resulted in two defeats. So, if one believes that Europeans are not just one happy group, then Germany has frustrated desires that some other European countries can ameliorate by looking back to a grand history.

hawkeye10
 
  1  
Reply Sat 27 Aug, 2011 06:20 pm
@Foofie,
Interesting your take that the Germans never built anything like the other peoples of Europe empire wise, because now the future of the EU rests with the Germans willingness to give all of the money they have saved over to the project of building the EU. I am not sure if the lack of history with building makes this prospect more likely (under the theory that they want their turn) or less likely (under the theory that the Germans are not psychologically suited for the job, as proven by them never doing it)......

Not sure if I agree with your basic thesis, but I enjoyed hearing it..
Foofie
 
  1  
Reply Sun 28 Aug, 2011 10:18 am
@hawkeye10,
hawkeye10 wrote:

Interesting your take that the Germans never built anything like the other peoples of Europe empire wise, because now the future of the EU rests with the Germans willingness to give all of the money they have saved over to the project of building the EU. I am not sure if the lack of history with building makes this prospect more likely (under the theory that they want their turn) or less likely (under the theory that the Germans are not psychologically suited for the job, as proven by them never doing it)......

Not sure if I agree with your basic thesis, but I enjoyed hearing it..


Well, I won't be so self-absorbed to think I am the only person to have the thoughts I posted. To me, it is just one possible explanation of why we hear a set of standard explanations for the Nazi's rise to power. Others, I would think have had the same thoughts. Likely, even in some book I haven't read.

Also, I do wonder if the continued, supposed interest in the Nazi era, through books and film, is an attempt to allow Germany to have the illusion that it did have "its day in the sun," so to speak, to ameliorate any feelings that its nationalism came too late to build an empire (not a good idea in a nuclear age). In other words, a "frustrated" Germany may not be good for the future?

What might also be of interest, in my opinion, is that the thorough job of de-Nazifying Germany after WWII did not eliminate the belief, by many Jews, to think that a Jewish national state was needed. So, if the Jewish belief that a Jewish national state is needed (aka, Israel), even though in a nuclear age the concept could be argued to be obsolete, could one think that collectively many Jews might have what could be called PTHD (Post Traumatic Holocaust Disorder)? If that would be correct, to some degree at least, what would have allowed Jews to have, or ever have "closure" on the Holocaust? The answer may be simple, but something the Allies would likely not have done. That would be to go beyond de-Nazification and de-Germanify Germany, since that would have taught the Jews (and the world) that when a people adopt a racially motivated belief system, bent on world domination, if they lose, they lose everything - language, culture, country.

Obviously, the EU is looking to Germany today to bail out the EU, rather than having the supposed "resources" to bail out the EU from within other country's resources (if Germany was, after WWII, "shared" with adjacent countries).

I think I might be making an argument for those that are pro-Palestinean to see that the problems in the Middle East could have been avoided, but it would have been a bitter medicine to swallow, and the expedient thing to do right after WWII was to put the Jews in the Middle East. Payback is a bitch, as they say.

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