Skip to comments.EU: The end of all-powerful Germany
Posted on 05/25/2012 12:11:16 AM PDT by bruinbirdman
The advent of a new administration in Paris has shifted the balance of power in the European Union away from Berlin and German austerity a development that has been welcomed in Athens as a source of renewed hope and a light at the end of the tunnel for the Greek population.
by Giorgos Malouhos
With regard to what we have seen in recent years, something changed at yesterdays extraordinary summit: there were no guidelines prepared a few hours in advance by the German chancellor and the French president. François Hollande did not adhere to the tradition established by Nicolas Sarkozy. His baptism of fire in Brussels was direct and not shielded by Berlin.
The summit also had another peculiarity. For the first time in many years, Germany had to contend with an agenda that was not dictated by Berlin, and in particular with issues linked to economic growth. No concrete decisions were taken on Wednesday night, but an important development clearly emerged: Germanys hegemony has been called into question by Europe. And its leaders in Berlin, who are acutely aware this change, already feel they have been dethroned.
The fact that German pre-eminence is now being contested will have a direct impact on Greece. Before yesterday's summit began, the German central bank made public a report which argues that no further efforts should be made to accommodate Greece, whose bankruptcy would at least amount to a final outcome for what is now an ongoing saga At the same time, François Hollande reaffirmed his support and confidence in the Greece and its people.
The new balance of power that is emerging in Europe is evident in the conclusions of the summit: We will ensure that European structural funds and instruments are mobilised to bring Greece on a path towards growth and job creation.
New balance of power in Europe
Germanys hegemony in Europe is now on the wane. As many commentators in the German press have pointed out, Angela Merkel is more than ever isolated with regard to her partners. The reality is that her policy has no allies. Now that it has been rejected by international organisations and the United States, which have adopted the line advocated by Paris and Madrid, there is no one to defend it.
So what can we expect the Germans to do? Will they start over and adapt to the new realities as though nothing had happened? Certainly not. They will refuse to back down and fight on. They have the political will and the power to do that. But they are no longer in total control, and they will no longer be the sole arbiters of policy. And this is the change that is the focus of enormous hopes Europe, and especially in Greece.
Conditions faced by our country have changed radically over recent weeks to a point where Greece will now have an opportunity to fight for a better future. Of course, as a majority of our partners have consistently pointed out, we will have to make good on our promises. There is no denying this fact. But at the same time, no one anticipated the new balance of power in Europe which emerged yesterday.
The commitments that we are obliged to honour, and which we should honour, are no longer caught in the grip of an impenetrable dogma that no one is allowed to touch. The parameter of economic growth, which has now been tabled, is a game changer.
Fanaticism has become the major danger
Greece can base its position on growth, and, perhaps even more tellingly, it can fight more effectivley against an austerity that served to hide a German nationalist approach. Berlin is no longer the sole dealmaker, which means that we can now expect to achieve results, for example, in the area of privatisations, and the energy sector. And there is no denying the critical importance of progress towards these goals.
Having emerged from the tunnel of despair which was the sole outcome of German hegemony, it is time for Greece to show that it intends to become a genuine European state and not one that needs to be shored up. In any case, we will have to do what is absolutely necessary for our survival either within or outside Europe. But all of this will be made much easier now that we have been released from the suffocating position we were forced to endure.
Since yesterday, our control over the future has grown considerably. This is a positive development, but one that must now be reflected in politics and, lets not forget, politics is the art of the possible. It follows that fanaticism has become the major danger. And it is worth wondering how we should oppose the many fanatics that have emerged on all sides of the political spectrum. The first observation and the one that should be emphasised today is that, in spite of all that has been said, the outlook for Greece has improved considerably.
Now is the time to focus on the light at the end of the tunnel. Now we have the opportunity to fight to change our destiny. Europe is no longer what it was a few weeks ago. The context is different, and the change that has emerged has resulted from the expression of the will of two peoples: the people of France and the people of Greece. The French have exercised their power to contest the will of an all-powerful Germany, which had completely subjugated their former president to the point where he could no longer remain in office. The Greeks showed they had the strength to demonstrate their discontent through an unequivocal anti-austerity vote. Now that all-powerful Germany has been forced to retreat, a major obstacle to Greeces future in Europe has now been removed. We should show that we have understood this change and that we are willing to fight for our future. At least we have the conditions in which such a fight is possible.
It’s wishful thinking from a Greek.
Germany still holds the cards. The treaty forbids (and requires a unanimity to alter - and Northern Europe is still solidly with the Germans which the author leaves out) eurobonds, and France has only turned to align with Club Med because their credit rating it heading down and they want to be able to use Germany’s credit card in the future too.
It’s looking more and more like Germany has decided cutting the Greeks loose is less expensive than keeping them on the German taxpayer’s tit forever.
Greece hasn’t faced any ‘austerity’, they’re been living beyond their means, and on the goodwill of northern Europe, for too long.
Their real ‘austerity’ will be felt when Merkel says the milk is all gone. Then Greeks who want to live on taxes, but pay no taxes, will have to choose.
The rats have been promised FREE CHEESE in return for voting Socialist for two generations.
Now that they are out of money to pay for the cheese, the rats still WANT the free cheese. After all, they ‘Paid” for it.
And the Pols are terrified to tell the rats the truth, that the money they ‘paid’, was already spent on giving those that came before them their free cheese.
Does anyone remember Sarkozy's Club Med efforts? Beyond EU countries, it included North Africa.
He even sent his wife over to seduce Ghadafi into the plan.
As Rush has often said, whoever pays for you controls you.
If you can’t support yourself, you don’t control yourself.
This article is all about how Greece is no longer under the control of Germany, but who is paying for Greece, if they are bankrupt? It’s nonsensical. The article is idiocy.
Return of the Drachma means the end of the Euro Zone grand single currency, consolidated socialist experiment. They all know that no one would buy any euro denominated sovereign debt and EU is not ready to give up yet.
Look for EU and Greece, in the end, to compromise.
Look for EuroBonds, probably in 2013.
The Greeks can now dictate to Germany all they want, just as long as they choose not to eat.
Germany public debt is 94% of GDP
Portugal public debt is 103% of GDP
Ireland public debt is 157% of GDP
Italy public debt is 118% of GDP
Ireland public debt is 157% of GDP
Greece public debt is 177% of GDP
Ponzi, is that you?
Certainly is not, unless the EU does break apart violently. 27 member states agreed by treaty to copy Germany in terms of economic and political structure. The vast majority of citizens do not know this. It’s quite entrenched now.
We’ll see how committed the French are to the Greeks when it comes time for loans and Germany is no longer willing to lend to Greece. Oh, that’s right, France won’t pay either. They’ll push for Euro bonds. What a joke...
I think not. Germany will try to keep things going but the EU is doomed by poor fiscal policies and an entitlement mind set. Look to see things fall apart fast in about 9 to 15 months. Greece will need food drops and be glad to get it. Europe is about to under go major changes—and they will be violent and sobering. In the end Germany will be on top again—that or Russia.
Note to France..
Your visions of superiority over Germany haven’t worked out too well in the past.
The global economic model is fundamentally broken. Why is this? Fundamentally, its because we don’t need all the people we have to produce all the goods & services the population needs. So we have excess people who rely on the Welfare (or workfare) state for their livelihood.
There is only one way to keep the model running. That is to let Governments continue to accumulate massive amounts of debt but make that debt manageable—perhaps even profitable. And the way to do that is the Zero Interest Rate Program (ZIRP). Japan has been doing that since the early 90s. When the return on everything else is negative, the Rich will flock to Government securities that pay zero (or even negative) interest in order to preserve their wealth.
Does it work? Yes and no. It achieves torpid (zombie-like) stability at the expense of real growth. Because you can’t get real growth from Government debt. Especially debt that just appears out of thin air. They are hoping that the current approach will just paper things over until the next big thing (world war?) happens and sets everything “right” again.
This guy lives in Wonderland.
The socialists can bluster all they want, but at the end of the day, “money talks & everything else walks”. Germany has the money. France does not.
The Euro crisis is coming down to 2 outcomes. Either Greece leaves the Euro, or Germany leaves the Euro.
With Hollande’s election in France, the pressure on Germany increases to finance the Greek fiscal black hole, & encourages the other PIIGS to line up at the trough for more unsustainable debt. Germany may well decide the Euro is not worth bankrupting itself, especially since Greece refuses to mend its ways. Germany must be looking enviously at Britain, which has no obligation to support the Euro.
Perceptive. There are ad hominem quotes from the Japanese man on the street to the effect, "Why do we need growth? We are the third largest economy. We have everything we need. I am satisfied."