Since the fall of the Berlin Wall 25 years ago and the always somewhat fragile agreement between Northern Ireland, part of th eUK  and the independent Irish Republic there is only one place left in Europe where a dividing line separates parts of what had once been a united country: Cyprus.   A Nomansstrip runs through the capital city of Nicosia, and beyond, that divides the country into a northern part, with an ethnic Turkish population, occupied by Turkish troops from the mainland, and an independent southern part populated by ethnic Greeks.  Previous attempts to unite the two parts have failed but once again discussions are going on.  Much depends on the approval of the Turkish government in Ankara, which is by no means a certainty, as well as agreement on land exchanges, and a method for organizing a single government for the entire island, built on two somewhat autonomous provinces.  There are many problems to be resolved, but also much to be gained if agreement can be reached.  It would in particular  be a very welcome development for the European Union, to which the southern part belongs – and the newly united one would  presumably enter – as it would be a demonstration of trust in the future of the EU despite the unwitting British effort to demolish it.  Stay tuned!
Greece
The Powerful and Complicated Angela Merkel
Angela Merkel, one of the world’s most powerful women, appears on the surface to have a dual personality. On the one hand she has dealt a very tough hand to Greece through the German-led austerity program, a program that has not led to improvement in Greece’s economic situation while harming the Greek people immeasurably. On the other hand she has been the strongest voice in Europe for a compassionate, human rights program to assist refugees from the Middle East conflicts. While the Greek austerity program is politically popular in Germany, her proposed refugee program has mixed support among German voters, especially mixed among those in the former East Germany. And while she has had to back off from her initial willingness to accept signifiant numbers of refugees, she is apparently sticking to the basic effort to address the issue, and pulling the rest of the EU along with her.
While forced Greek austerity and welcoming refugees seem to come from very different places, it can be argued that they are both viewed by many in Germany as being in the country’s national interests. But it is perhaps better to view them in terms of her domestic political interests. There is a strong impulse among Germans to punish the Greeks for their past sins of profligacy as well as a view that hard working Germans should not be paying to bail out Greece. The refugees present a human rights issue that many Germans view as an opportunity to do the right thing, while also satisfying Germany’s need for workers in the face of the country’s falling birthrate. But as the numbers of refugees heading to Germany increases beyond original expectations Merkel is now risking a loss in her domestic political support. But having criticized her for her austerity policy it seems fair to give her credit for taking on the refugee issue in a humane and positive way, despite growing domestic uneasiness.
In addition to these major challenges Merkel is now faced with the the unpleasant story of Volkswagen’s deceit in hiding the true polluting effects of its diesel engines. The thought of Germany’s largest and most successful corporation knowingly poisoning the air people breath and hiding the fact of it has an especially ugly resonance and just might force Germans to look in their mirrors before forcing Greeks to continue to accept the destruction of their economy. While this introduces another tough issue for Merkel, I would not bet against her. Her political skills and instincts are simply too impressive to ignore.
Merkel, Schaeuble and the Beginning of the End of a United Europe
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.