Germany may benefit from EU crisis

[Bombay Dude]

German Chancellor Angela Merkel has expressed deep concern over the future of Europe amid the worsening eurozone economic crisis that is affecting most of the continent.

The German chancellor made the remarks during a Youth Union convention in the northern German city of Rostock on Friday, hours after a German government spokesman said Merkel would travel to Greece next week for the first time since the eurozone debt crisis began in 2009.

The German chancellor pointedly asked troubled countries to clarify whether they were willing to remain members of the eurozone.

Countries that want to stay in the eurozone must rectify all the things that went wrong over the past ten years, Merkel said.

The long-drawn-out eurozone debt crisis, which began in Greece in late 2009 and reached Italy, Spain, and France in 2011, is viewed as a threat not only to Europe but also to many of the world’s other developed economies.

Press TV has conducted an interview with Ian Williams, with Foreign Policy in Focus from New York, to further discuss the issue.

The following is an approximate transcript of the interview.

Press TV: Merkel has called this current debt crisis that Europe is facing one of the worst crises ever. Do you think that’s an accurate assessment?

Williams: Yes, it clearly is one of the worst crises ever but it’s worse for some than others. Germany will weather the crisis well. It might even benefit from it.

The countries like Greece, which probably should not have been in the European Union or the euro to begin with, are going to suffer one way or the other. A lot of this is very symbolic. Greece’s contribution to the overall European economy is very small, and for the proportion of the euro is very small.

As always, with the financial markets, it is the sentiments. It’s the idea that if Greece were to fall or to default then it would send signals elsewhere.

It would also mean that a lot of speculators would then take on the next weakest, to try to pull off the same sort of coup against their currencies and against their central banks.

One of the ways to do this, of course, is to introduce the nasty word “regulation” and try to “soften them” -- that speculation, the societal ways of cash swashing around the world looking for the next weakest target.


Press TV: Well she’s also asking the indebted countries to do more and to rectify all that went wrong in the past ten years. That’s sort of a bit pretentious considering countries like Greece, countries like Spain and Italy are going through austerity after austerity just to appease the European Union, to get more loans to appease the IMF. What more does she want them to do?

Williams: Greece is a special case. Greece was taking money. It was misspending it. It was not accounting for it, roughly. That’s been one of the problems that’s invited the Germans about the Mediterranean economies in general and Greece in particular.

But overall, there is no doubt at all that the policies of the Germans and the German central bankers have been edging in terms of austerity are possibly the worst thing that could have been done. It’s like the medieval practice of bleeding patients who were dying. It hastens the death. It does not hasten the cure.


Press TV: Also, Germany is facing its own economic downturn. Do you think these tactics are in a way of diverting attention away from Germany’s own economic and fiscal policies?

Williams: Obviously, for Germany - her very first duty is to her own voters, and there’s a limit to how much they are going to put out. I don’t think it’s been pointed out just how much they have benefited from this arraignment.

The euro has been basically a mechanism to ensure that Germany has stayed a competitive export-led manufacturing economy.

If it were not for the euro in its present form, it would not have been as easy to do it. In many ways, Germany is a model for the industrialized world in terms of maintaining a manufacturing economy.

Britain and America have exported jobs to China and other places. Germany has maintained high living standards, high social security and very high productivity.

So one of those contributing factors has been that the euro has allowed them to shift some of the burdens of this onto the weaker economies of the Mediterranean to whom they have sold the goods for euros.

PressTV - Germany may benefit from EU crisis: Expert

 

[DV RULES]

The Crisis in the EU and the Rise of Germany


«This year could be the most difficult of the crisis for Europe», predicts Germany's Foreign Affairs Minister, Guido Westerwelle (1). Amid news from Brussels and a number of other EU countries, this conclusion comes as a surprise to no-one. Reports that European Council President Herman Van Rompuy and High Representative for Foreign Affairs and Security Policy Catherine Ashton declined to remain in their posts for the next term are only aggravating the confused impression being given by Europe's political elite. Horses are not usually changed midstream but if they are, it means they are no longer offering any kind of hope.

The Friedrich Ebert Foundation published the results of a study in which experts from 13 European countries took part (2). In their opinion, there are four likely scenarios for Europe leading up to 2020: maintaining the status quo, permanent crisis; the complete break-up of the Eurozone; differentiation with a separate strong core and periphery, with the periphery rejecting the euro; and a full fiscal union within the current Eurozone. The last scenario is considered to be the most realistic. And it is becoming increasingly evident that Germany's key role in settling problems in the Eurozone is creating a special relationship between Germany and its partners... The authors of the study make no mention of the anti-German feelings of debtor countries, whose populations blame Germany for the adoption of austerity programmes. The study also points out that the EU is becoming aware of Germany's economic power, while at the same time debtor countries have a growing sense of fear, although hidden, when it comes to Berlin.

These kinds of feelings are not just seizing the Eurozone, but the European Union as a whole. Only these fears can explain the efforts of certain Central and Eastern European countries to strengthen bilateral contacts with Germany.

At the end of February, former Commissioner of the European Commission, Günter Verheugen, received an honorary doctorate from Babeş-Bolyai University in Romania for his contribution towards Romania joining the European Union. From 1999-2004, the German politician was Commissioner for Enlargement in the European Commission headed by Romano Prodi. At that time, Verheugen was the first to name a deadline for Romania's entry into the EU – 2007. And so it happened; 12 years after officially applying to join, Romania and Bulgaria were accepted into the EU.

Speaking at an awards ceremony in February, Romanian Prime Minister Victor Ponta called the German politician the founding father of the idea of a European Romania. The evaluation was designed to be heard in Berlin. At the beginning of the 1990s, a united Germany was energetically carrying out a strategic course of action to expand the European Union to the east, which in spirit was a response to the age-old tradition of Drang nach Osten. Verheugen, along with other German politicians, worked within the framework of this course of action. The treaty on the accession of six Central and Eastern European countries to the EU, including Romania, was adopted at a session of the Council of the European Union in the German city of Essen in 1994.

It is hardly accidental that the former German politician received his honorary doctorate from a university in Cluj-Napoca – a city in the historical region of Transylvania founded by German merchants; in German it is known as Klausenburg. The city was included in the territories transferred to Hungary as part of the second Vienna Award (1940), and from 1944-1945, during the German occupation of Hungary, it was under the direct control of Berlin. Today, teaching at the university is conducted in Romanian, Hungarian and German. The dispute between Romania and Hungary over this territory has been formally eliminated, otherwise neither country would have been accepted into the EU, but in practice the situation regarding the Hungarian minority is one of the most sensitive domestic policy topics in Romania and acts as a source of friction between Romania and Hungary which escalated after the self-determination of Székely Land in 2009 (the Székelys are a Hungarian minority group).

In contrast, Germany's policy regarding ethnic Germans is not proving unpopular with the Romanian authorities. During the latest session of the German-Romanian government commission (an annual event which takes place alternately in Germany and Romania), the commission's co-chair, German Deputy Interior Minister Christoph Bergner, declared, among other things: «Both the German and Romanian sides recognise that in the interests of the whole of Europe, it is extremely important to give support to the German minority, strengthening their identity and viability» (3). This support has a cash equivalent. In 2013, the German Ministry of Internal Affairs allocated 1.7 million euros and the Ministry of Foreign Affairs – 0.4 million euros, while Romania allocated 1.45 million euros (4). At present in Romania, additional payments to ethnic Germans (the overall size of the diaspora is nearly 40,000 people) exceed the size of the country's minimum pension.

Another example of the Romanian authorities' dalliances with influential Germany has been the nomination of Klaus Johannis, who for many years headed the Democratic Forum of Germans in Romania, for the post of First Deputy Chairman of the National Conservative Party. The most surprising aspect of this appointment is the departure from regulation which in cases like these requires a certain length of service in the party that Johannis could not possibly have, as he only appeared in the party four days before his appointment.

So in order to strengthen links with Germany, the Romanians are actively making use of the German ethnic minority's presence in their country. In this regard, the Hungarians have gone even further. From 2013 onwards, the Hungarian parliament has decided that 19 January will be celebrated as a day of remembrance for Germans expelled from Hungary. According to German historians, at least half a million Germans living in Hungary were deported after the Second World War; the overall number of people deported is estimated to be 14 million. Budapest officially apologised for the expulsion of Germans back in 1995. In 2007, the Hungarian parliament held a conference dedicated to the memory of those expelled. That same year, the parliament unanimously voted to establish a day of remembrance and a high-ranking guest from Germany spoke at a special session for the occasion – Bundestag President Norman Lammert. In his speech, he called the Hungarian parliament's decision «an impressive gesture promoting reconciliation and understanding». Angela Merkel also spoke approvingly of this «impressive gesture» when she received Hungarian President Janos Ader in Berlin.

Note that Germany itself does not yet have such a day of remembrance. While in opposition, the Christian Democratic Union (CDU)/Christian Socialist Union (CSU) and the Free Democratic Party (FDP) pushed a resolution through the Bundestag in 2003 on the establishment of a day of remembrance and, in 2011, the Bundestag was obliged to consider the possibility of introducing one, but a decision has still not been made. At present, a number of CDU and CSU land offices are suggesting that a day of remembrance be held for victims of the expulsion, while the head of the CSU, Horst Seehofer, is demanding that compensation be paid to Germans who ended up doing forced labour in camps in the USSR, Czechoslovakia, Poland and Romania after the end of the Second World War. According to Erika Steinbach, head of the German Union of Expellees, in 2012 there were 40,000 people living in Germany who would have been entitled to this compensation. Germany's parliamentary parties are in dispute over the choice of date for this remembrance day, but there is certainly no disagreement among German politicians that such a national day of remembrance should be established.


Natalya Meden - The Crisis in the EU and the Rise of Germany - Strategic Culture Foundation - on-line journal > The Crisis in the EU and the Rise of Germany > Strategic-Culture.org - Strategic Culture Foundation

 

[kawaraj]

This EU framework basically paralyze all weak nations, moving the competiveness to only Germany, France and in part Italy.

It's a hell for countries like Greece, Cyprus and the like.

 

[banned]

Ha, The Fourth Reich is back!

 

[tranquilium]

Erm no, just no. Germany NEEDS EU. In fact, out of the entire European Union, Germany has the most to lose if EU is gone.

Remember, Germany was one of the Axis powers in WWII. As a result, severe restriction is placed on the nation's development. One such example is the aircraft industry in Germany. Did you ever wonder why the nation that invented the jet fighter and operated one of the most powerful air fleet must now rely on France for aircraft? The answer is that as part of the WWII surrender, Germany could no longer pursue many vital sectors for their national defense. This means while Germany looked great on the economy front, it is very vulnerable as far as national defense goes. To put it more bluntly, without the protection offered by EU, US can literally walk into Germany and take whatever they want and it had happened once before:
On September 22, 1985, the governments of France, West Germany, Japan, United States, and the United Kingdom agreed to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets. This is known as the Plaza Accord. Today the best known effect of plaza accord is the lost decade (soon to be decades) of Japan. The rapid (key word here) rise in the price of Yen and Mark severely hampered Japanese and German exports. In Japan, in order to maintain growth and jobs, the Japanese are forced to heavily invest in stock market and real estate. When that bubble exploded, it crippled the Japanese economy and send Yen into a downward spiral and effectively allowed US to figuratively loot Japan silly. Now, Germany was spared of that fate because, quite frankly, they got the lucky break of the century. USSR collapsed on 91, this means the entire eastern Europe just effective turned into German's market. (In contrast, China had grew greatly in the same time period, effectively making Japan's life even more difficult)
This is why Germany is spending all these efforts to keep EU together despite many countries clearly had debt issues long before they joined EU. Alone, Germany is simply a fat lamb waiting to be eaten by the first major power that has a big enough military and desperate enough for cash. With EU, however, Germany is protected by EU's military, thus ensuring its safety.

 

[Durvag]

Germany is just revenging of lost of WWII.....they wanna to be the only power in EU but this time bye economy not war.....

 

[Backbencher]

I doubt it.
The shabby European economies will come to haunt every top European power including Germany . Germany's economy mainly depends upon foreign export and with such a unpleasant state of the European union there are bound to be minimum demands from its neibhours .
Actually a slow moving Europe is in no one's benefit, be it China or India