A New Europe--with Germany in Charge

[jack stowaway]

As a clear damp dawn rose over Brussels on Friday morning, the tired and tetchy leaders of Europe emerged, bleary-eyed from nine hours of night-time sparring over how to rescue the single currency and indeed the entire European project.

Brave faces were put on, bluffs called, counter-bluffs revealed, vetoes wielded. Histrionics from France's Nicolas Sarkozy, poker-faced calm from Germany's Angela Merkel, David Cameron gambling the UK's place in Europe by opting to battle for Britain rather than helping to save the euro. When the dust settles, Friday 9 December may be seen as a watershed, the beginning of the end for Britain in Europe. But more than that – the emergence for the first time of a cold new Europe in which Germany is the undisputed, pre-eminent power imposing a decade of austerity on the eurozone as the price for its propping up the currency.

The prospect is of a joyless union of penalties, punishments, disciplines and seething resentments, with the centrist elites who run the EU increasingly under siege from anti-EU populists on the right and left everywhere in Europe.

"For the first time in the history of the EU, the Germans are now in charge. But they are also more isolated than before," said Charles Grant, director of the Centre for European Reform thinktank. "The British are certainly more marginal than before. Their influence has never been lower in my lifetime."

For the rest of the article, go to...

http://www.guardian.co.uk/business/2011 ... pe-germany

[Cosima___J]

"Germany in charge"
Well yes, of course, the people with the money will always be in charge.

The whole idea of a monetary union (the euro) was far-fetched. I'm surprised it's lasted this long. How can the economies of vastly different countries (the PIIGS vs the northern tier) really be harmonized?

[John F]

Friday 9 December may be seen as a watershed, the beginning of the end for Britain in Europe.

A commentator on the PBS NewsHour said that to the contrary, the beginning of the end was years ago when Britain refused to join the Euro Zone.

[absinthe]

I think the fun is about to start.

Let's see what the people of some of these countries really think when they find they're having to get their budgets signed of by Germany. That it'll be German tax inspectors prying into their lives. Let's see what happens when Greece and/or Ireland drop out of the EZ.

The problem for Cameron is he failed to spot that he got nothing in return, not even protection for the City's financial industry.

http://www.ft.com/cms/s/0/0b0c463c-227f ... z1g7yvD3zL

[jbuck919]

The problem for Cameron is he failed to spot that he got nothing in return, not even protection for the City's financial industry.

Now I'm confused. Didn't he in fact spot exactly that, which is why he did not go along with the grand scheme?

The whole idea of a monetary union (the euro) was far-fetched. I'm surprised it's lasted this long. How can the economies of vastly different countries (the PIIGS vs the northern tier) really be harmonized?

Don't back off when you find out that Paul Krugman agrees with you. This may seem obvious now, and was certainly predicted from some quarters at the time, but the prevailing voices then were those of what Krugman calls, pejoratively, a bunch of romantics. I thought the Euro was a good idea at the time without thinking about the disparities. How about you?

[absinthe]

The problem for Cameron is he failed to spot that he got nothing in return, not even protection for the City's financial industry.

Now I'm confused. Didn't he in fact spot exactly that, which is why he did not go along with the grand scheme?

He thought he did. But I'm not sure he expected to find himself quite as isolated. The 17-club (that could soon become the "26") can now organise europe as they like which might include settling EU financial transactions demoninated in euros in the eurozone.

One might appreciate Camoron (new spelling) if he'd got it right or behaved more wisely. Trouble is, we seem to have sacrificed wisdom for youth and spivvyness; and many of us previous "don't care-ers" are starting to feel uncomfortable. Admittedly he was in a bit of a spot. He might have conceded subject to negotiation then found some excuse for spinning out implementation in London.

Anyway, this union will take time to establish. It's inevitably seen as German led and the little French twerp is just hanging on Merkel's apron - no one is in doubt about that. He has to watch his behaviour with elections 5 months away and the French not at all happy about handing power, budgets and so forth to a German-led Brussels....

Socialist presidential hopeful Francois Hollande, in Berlin on Monday to address opposition Social Democrats (SPD), and far-right leader Marine Le Pen have both criticized the idea of handing Brussels more control of public finances.

Hollande aide Pierre Moscovici told French LCI television on Monday that acquiescing to Berlin’s demands would be evidence that the Franco-German relationship had become unbalanced.

“We do not need a treaty to have budgetary union,” he said. “Most of all, it erodes our sovereignty. We do not need to be under the nitpicking control of the European Court of Justice.”

...let alone the rest. I can't see the Netherlands or Denmark being too eager.


I suppose Merkozy was a bit upset over losing a nice tax-take from the UK finance industry to prop up Europe's failing states. The London Stock Exchange is bigger than anything in europe so the UK would have been disproportionately penalised - but they might dot us in the eye in return just down the line.

[John F]

Maybe I've missed something, but I see no sign in all of this that the euro is going away. To the contrary, it's all about propping up and protecting the euro. Well, eventually it will get sorted out in a way I understand.

I was all in favor of the euro from a purely selfish tourist point of view. Used to be I'd come home from Europe with several countries' small change rattling in my pocket; now it's just euros or pounds, depending. Concerning international high finance, I've really no opinion, except that insofar as the current European crisis can be blamed on the euro, obviously it can't have been a great idea.

[absinthe]

I was all in favor of the euro from a purely selfish tourist point of view. Used to be I'd come home from Europe with several countries' small change rattling in my pocket; now it's just euros or pounds, depending. Concerning international high finance, I've really no opinion, except that insofar as the current European crisis can be blamed on the euro, obviously it can't have been a great idea.

The trouble probably started when Germany realised how advantageous the common currency was. French and German banks started lending like crazy (as is now known) to Greece, Italy, Spain, etc., to enable them to buy French and German stuff. The spending was never monitored. Greece originally "got into" the euro with bent accounting (thanks I believe to an outfit whose name begins with G. S.) and with the very poor Grecian record for collecting tax, was the first with debts running out of control. No one noticed until it was too late. Eurozone prosperity was built on debt.

It's my belief that Greece would be better off defaulting and quitting the euro, devaluing its drachma and enabling it to rebuild. Sure it might be frozen out of capital markets but so what? Tourism would boom. It would just need to watch the spending - and get a decent tax collection system. As things stand, Greece can never get out of debt.

The idea of a common currency is fine but it really does need a common fiscal policy - that's openly admitted now. The hope of Germany forcing 17 (perhaps 26) nations into a fiscal straight-jacket is remote. 26 different cultures, languages, population sizes, wealth, etc., surrendering their sovereignity to an unelected Brussels bureaucracy run from Berlin will soon get resentments rising. It could be the end of the EU if anything explodes. It would certainly trumpet the end of democracy in europe.

[jack stowaway]

Another view....

The 'Great Game' here has nothing to do with the Euro and everything to do with Anglo-French rivalry--the enduring fault-line in European history. (Franco-German rivalry is merely a recent side-show).

What is at stake, long-term, is cultural-political ascendancy/prestige. The great aim of French politics is (and always has been) the marginalization of England and the threat to French cultural preeminence presented by perfidious Albion.

The near-hegemony the English language enjoys inside Brussels and in European business, science and cultural industries is a source of constant anguish to the French elite. A united Europe, minus the UK, would guarantee a revival of German and French as the language of politics and diplomacy generally--and the consequent diminishment of English linguistic-cultural influence.

Cameron--and all the blazer-coated Johhny Englanders who urged him on, have likely succeeded in accomplishing what neither Napoleon nor Hitler could--the steady, long-term and irreversible decline of English power and influence in Europe.

Behind the 'new Europe' project is traditional Great Power rivalry. The end-game has started. And post-De Gaulle France is the winner.

Of course, the above scenario may change if other countries rise up against German financial and French bureaucratic hegemony and the Eurozone splits asunder (probably back to the original Franco-German pact). But in either event, I fear Cameron's shortsightedness (and ignorance of history) has fatally compromised the UK's long-term standing in Europe.

It was a mistake of historical proportions to reject the post-war offer to become a founding member of the European project. It is an equally colossal mistake for the UK to turn its back on Europe at this time of crisis. That this has been done in defence of London bankers makes the decision all the more tragic. The self-interests of the City of London are not synonymous with the wider and longer-term interests of the UK as a European power.

[jbuck919]

The self-interests of the City of London are not synonymous with the wider and longer-term interests of the UK....

No similarities with any New World country to be seen there.

Curious as to the source of the passage, Jack. Good to see you posting, BTW.

[jack stowaway]

Hi John.

Thanks for the bienvenue

I am the source. (Sounds Biblical, doesn't it.) The passage reflects my own thoughts on the situation. They may well be outdated and/or wide of the mark, but they are a product of a school-history upbringing which focused very much on Great Power notions of history and, in particular, the age-old rivalry for pre-eminence between France and Great Britain.

They are too, I suppose, a product of much childhood reading of historians such as Arthur Bryant and other 'English Exceptionalists' whose names I cannot now recall. Their Anglo-centric reading of history invariably positioned Anglo-French rivalry at the center of most world conflicts--from the French-Indian wars of Colonial America to the lead-up to both world wars.

I'm not sure if you're familiar with a British tv series called 'Yes, Minister'? In one episode, the deputy head of the Civil Service, a certain Sir Humphrey Appleby, is questioned by a naive subordinate (Bernard) on why Britain needs nuclear weapons. The conversation went something like this...

Bernard: Because of the Russians?
SHA: No, Bernard
Bernard: The Chinese?
SHA: No. Bernard.
Bernard: Then why?
SHA: The French!

One can imagine a similar, albeit reversed, conversation taking place in the Palais Bourbon.

[jbuck919]

Hi John.

Thanks for the bienvenue

I am the source. (Sounds Biblical, doesn't it.)

As long as you don't also claim to be the way, the truth, and the life. Well, it's nice that you defended your credentials to make such an assessment, but the point is that you sound like a professional print commentator, which I mean as a compliment. No one else here that I know of, including myself, can manage offhand that kind of mastery of journalistic opinion style.

None of which should be interpreted to mean that I necessarily agree with you.

[John F]

Their Anglo-centric reading of history invariably positioned Anglo-French rivalry at the center of most world conflicts--from the French-Indian wars of Colonial America to the lead-up to both world wars.

I don't understand. The UK and France were allies throughout the 20th century and in both the world wars and the cold war, weren't they? Members of NATO and all that. Uneasy allies at times, notably when de Gaulle was back in power in France, but on the same side of the great power conflicts in Europe. Or maybe you mean "rivalry" in a different sense than opposition?

[jack stowaway]

Their Anglo-centric reading of history invariably positioned Anglo-French rivalry at the center of most world conflicts--from the French-Indian wars of Colonial America to the lead-up to both world wars.

I don't understand. The UK and France were allies throughout the 20th century and in both the world wars and the cold war, weren't they? Members of NATO and all that. Uneasy allies at times, notably when de Gaulle was back in power in France, but on the same side of the great power conflicts in Europe. Or maybe you mean "rivalry" in a different sense than opposition?

I mean it in the sense of a mutual obsession (although more on the UK side, I think) with the other's motives. Suspicion of the French (whether allied with them or not) seems a permanent leitmotif in English history. These are the two countries, after all, that fought The Hundred Years War.

[jbuck919]

I mean it in the sense of a mutual obsession (although more on the UK side, I think) with the other's motives. Suspicion of the French (whether allied with them or not) seems a permanent leitmotif in English history. These are the two countries, after all, that fought The Hundred Years War.

Don't you think it more than slightly romantic to hold a shadow from the Middle Ages over modern Europe? Or even of history through the middle of the 20th century? You may know Brits who still talk in private about the froggies, but that is not much in the way of resurrecting defunct struggles for domination.

[jack stowaway]

I mean it in the sense of a mutual obsession (although more on the UK side, I think) with the other's motives. Suspicion of the French (whether allied with them or not) seems a permanent leitmotif in English history. These are the two countries, after all, that fought The Hundred Years War.

Don't you think it more than slightly romantic to hold a shadow from the Middle Ages over modern Europe? Or even of history through the middle of the 20th century? You may know Brits who still talk in private about the froggies, but that is not much in the way of resurrecting defunct struggles for domination.

Yes, I do [think it romantic]. And you are quite right, it is a 'shadow', one that ought to be expunged from modern thinking.

My comments were intended to explicate what I believe to be an undeclared yet powerful current of feeling that animates Tory opposition to Europe (i.e. France); a feeling that is reciprocated to some degree on the other side of the channel. [Or La Manche, if you prefer]

Although I understand the view (I was schooled in the same view of history), I do not subscribe to it--as I think the 4th paragraph makes clear. But I think that it still exists, and still exerts a powerful influence, especially among Tory opinion-makers.

As a staunch 'European' I have long been bemused by the British obsession with French, or German, domination. Hence my dismay at Cameron's veto. A huge mistake in my opinion, but one which I feel is driven, at least in part, by the thinking described in my post.

On quite another note [in reply to your previous post--for which, thanks, btw], like many former members, including Ralph, Barry and Corlyss, I find my interest in posting has declined considerably since the halcyon early days of internet-discovery. I am now much more content to read what others have to say, and to silently register agreement or disagreement without feeling the urge to respond in print.

If I do post it is more often to copy or link to a newspaper article that either throws some light on a question under discussion or simply because I feel that other posters may find it interesting.

Of late, I've returned to...books! I have a volume of Walt Whitman by my bedside and enjoy the forced slow-pace of physical reading as opposed to online scanning.

And yet I hope that this board continues to thrive. I enjoy coming online to read the thoughts of regular contributors--whom I feel I have got to 'know' over the years, including, of course, yourself, John.

I would miss CMG if, for any reason, it ceased to exist.

[John F]

Their Anglo-centric reading of history invariably positioned Anglo-French rivalry at the center of most world conflicts--from the French-Indian wars of Colonial America to the lead-up to both world wars.

I don't understand. The UK and France were allies throughout the 20th century and in both the world wars and the cold war, weren't they? Members of NATO and all that. Uneasy allies at times, notably when de Gaulle was back in power in France, but on the same side of the great power conflicts in Europe. Or maybe you mean "rivalry" in a different sense than opposition?

I mean it in the sense of a mutual obsession (although more on the UK side, I think) with the other's motives. Suspicion of the French (whether allied with them or not) seems a permanent leitmotif in English history. These are the two countries, after all, that fought The Hundred Years War.

And they fought it seven hundred years ago, over the succession to the French crown, which hasn't been an issue between the two nations since. Soon it will be two centuries since the UK and France warred against each other, and over a century since they formed an entente cordiale to acknowledge that their long history of mutual belligerence was long since ended. If you're saying that David Cameron's and Nicolas Sarkozy's memories of Henry V and Napoleon have any influence at all on Anglo-French relations today, I hope you're wrong, because that would be incredibly stupid.

[absinthe]

I doubt this latest impasse has anything to do with historical rivalries. Watching the results of the summit on Friday, Merkozy was clearly disappointed
with the UK. They might have emerged with an accord but Cameron thwarted that. Some frustration concerned the loss of a juicy lump of tax on London's financial transactions. As 75% of european settlements occur in London the UK would have been the biggest contributer to prop up failing states. Sarkozy was tearing his hair out because they sincerely hoped to emerge with something to placate markets and his electorate. It seems it's the european way to dither until a crisis is full in their face then people act.

The Common Market worked well for many years (even if it incited some idiot trading) so the will to move away from old rivalries (refreshed by a war) was there. Ok, the EU grew too big, too fast - possibly because snapping up ex-Comecon countries was expedient while the going was good. The euro was basically a good idea were it supported by at least some oversight. I doubt that if I applied for a £1billion loan at my bank they'd let me have it without knowing how it would be spent and without covenants in place. So France and Germany should have done more. They didn't even take security! Instead of buying German goods the Greeks spent it on public service pay increases of 30%.

I think there'll be trouble in Europe. Things won't go as smoothly as Merkozy hopes but it won't be down to ancient rivalries. Even today investors awake to realise all is not yet right. Interest on PIGS bonds are up again. Let's see what happens if Hollande succeeds Sarkozy next year.

The UK? The fallout has started but I wouldn't mind betting we'll be back in Brussels before long. Camoron is a spiv but no statesman.

[John F]

Very interesting. It's surely a safe bet that there'll continue to be trouble in Europe, though I wouldn't bet on what the trouble is going to be. Rules are more easily made than obeyed or enforced. Austerity is elusive even when politicians are committed to it - just look at Washington. As for Germany being "in charge," it has the advantage of a strong economy and sober fiscal policies, but these are sources of influence on other nations rather than coercion. Seems to me the time for such grand generalizations hasn't yet come.

[jbuck919]

It seems it's the european way to dither until a crisis is full in their face then people act.

It's the same in the US, except for the "then people act" part.

[absinthe]

Hah!


Well, as John F said, it's easy to make rules, less so to implement and enforce them and that was illustrated today as officials in the 26 started pondering the detail. Stocks plunged again. It transpires that City folk are either nervous, puzzled or disdainful, realising Cameron hasn't protected finance, more like his own skin.

This guy expresses doubts fairly well:
http://blogs.reuters.com/hugo-dixon/201 ... ish-style/