Merkel, Schaeuble and the Beginning of the End of a United Europe

Posted July 14, 2015 on 8:38 am | In the category Economy, Europe, Germany, Greece, Merkel | by Jeff

So, the Eurozone and the Greeks have dodged a bullet…or have they? and should they have? Below is a slightly edited exchange between an American former expat retiree and his friend who has lived in Europe for over twenty years. The former (A) lived in Munich and Prague for ten years; the latter (B) an American lawyer/businessman who has lived and worked in Europe for over twenty years.

A: What are your thoughts on Merkel and her Finance Monster – ur – Minister?

B: Repulsion. Same as for Greek governments of all denominations. Lying #### the lot of them. . Plague on German Volk and Greek governments. Tyrants and enslavers. There are no tyrants but that there are slaves. Politicians (particularly Greek ones) are slaves to the indulgence of their own power and so sell their people into slavery to keep their personal indulgence. And Hollande, …. He is a nothing. He was fighting Merkel just so as to keep France punching far above its weight for another few years.

In my opinion Greece should vote itself out of the Euro and the currency would soar (to my benefit admittedly). That not good for Angela. Good for Greek people who could get on with their lazy ways and devalue their currency whenever it was convenient for them. Good for principles. Good precedent for Portuguese, Spanish and probably Irish people. Bad for their incumbent governments.

If the people do not want an EU then there should not be one. If they want one they should have fiscal and political union and give up nation states except during the World Cup. That is the point my favorite economist misses. Wolfgang Munchau (Financial Times) is usually better but I think he has never known a non=integrated Europe and often forgets that indeed it is a utility for the benefit of people. Mostly of little people. :

A: Most of what I have read leading up to last night’s “negotiations” started with the premise that the Euro without political unity of some sort was doomed to struggle if not fail. Pickety, Stiglitz and Krugman, and many other professional economists have suggested that the best answer for Greece is to leave the Eurozone and work out their troubles with a new Drachma. In fact as Munchau says, it might be good also for other countries. (i.e. Ireland, Portugal, Spain) I have felt that Germany had simply found a new way to dominate the rest of Europe for its own parochial benefit, this time in a less obviously malign way. And sure, the Greeks have been led by crooks for years and many Greeks don’t work as hard as they might….and of course not as hard as the Germans claim to work. But austerity is a self indulgent exercise designed by Schaeuble, implemented by Merkel for the self interest of Germany, and the rest of Europe ends up participating in their own damage. As for the Greeks sleeping in the street waiting for the ATM s to,open and picking through garbage, they are simply collateral damage.

It is especially galling for me to see Merkelmania produce a heroine out of a local politician playing to her Calvinist voters while humiliating a fellow European country and forcing that country to accept absurd, counter-productive austerity programs designed to impoverish itself so it can accept so-called bail out money, which they then give to German banks. Ergo, a perfect ploy by the Germans, who then applaud themselves for their moral stance. This is not going to end well.

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  1. Mr Jeff and his colleague are awfully forgiving on the key topics of corruption and debt repayment. It should be noted that Germany was not the most hard-line country demanding that debts must be repaid. That was Finland, the only Scandinavian country in the euro zone, with Estonia its semi-Scandinavian relative not far behind. To best understand the north/south divide on this, see the central bank-robbing/suicide scene from the Finn Aki Kaurismaki’s great film, “The Man Without a Past”. Up here it is unforgivable to not repay your debts and you pay the price if you can’t. Germany is a softie in comparison.

    Comment by Chester Hasbrouck Frisby — August 8, 2015 #

  2. Wow! Sure doesn’t seem forgiving at all. Rather it is a pox on both their houses, but with a commitment to rational approaches to solving a problem that risks ruining the grand European experiment. And that may indeed be the end result. Clearly Greece should get itself out of the Euro since all parties know that the German led austerity freaks will end up destroying what’s left of the Greek economy. As for tiny Finland, they are punching over their weight class and waiting for the rebirth of Nokia. Ain’t gonna happen and that leaves the right wing Finn party in control of a sinking ship. For now.

    But certainly as long as the situation is viewed through German morality lens (I’ll skip the irony of that term) there is little hope for a sane resolution.

    Comment by Gunther Purdue — August 11, 2015 #

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