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Romano Prodi Calls for a “Latin Front” to Oppose German Domination of Europe

COMMENT: We are seeing the continued development of “The European Disunion.” The U.S. Department of the Treasury, Paul Krugman and a growing chorus of European voices are noting Germany’s economic policies as being brutally restrictive toward other European countries and the world as a whole.

The German policy vector is deliberate, a continuation of “war by other means.”

Noteworthy, as well, is the openly chauvinistic tone of the German press and German officialdom. Berating other European nations as being inferior is more or less routine for the Germans at this point.

Now, former Italian Prime Minister Romano Prodi has issued a call for a “Latin Front” to openly oppose German policy. It will be interesting to see if this becomes a reality, and what retaliation this draws from Germany.

Below, we review the European Monetary Union as the realization of a long-standing blueprint for German European domination and, through that, world domination.

  • Writing in 1943, Paul Winkler foresaw that the Prusso-Teutonics would realize their goals through the creation of a German-dominated central European economic union (bearing a striking resemblance to today’s European Monetary Union.) One of the principal influences on List’s thinking was the “continental” concept of Napoleon, who attempted to economically unite Europe under French influence.
  • List’s blueprint was echoed by the German Chancellor with regard to German’s goals in the First World War.
  • The Listian model was put into effect by the Third Reich, as can be gleaned by read­ing Dorothy Thompson’s analy­sis of Germany’s plans for world dom­i­nance by a cen­tral­ized Euro­pean eco­nomic union. Ms. Thomp­son was writ­ing in The New York Her­ald Tri­bune on May 31, 1940! Her com­ments are repro­duced by Tetens on page 92.
  • The European Economic Community was formally articulated by Reich officials during the war, with the clear design to extend and amplify the arrangement after the war. Below, we quote Gustave Koenigs, Secretary of State at a 1942 conference about the European Economic Community.

“Italy’s Mr Euro Urges Latin Front, Warns Germany Won’t Sell Another Mercedes in Europe”  by Ambrose Evans-Pritchard; The Telegraph [UK]; 11/4/20

EXCERPT: The plot is thickening fast in Italy. Romano Prodi – Mr Euro himself – is calling for a Latin Front to rise up against Germany and force through a reflation policy before the whole experiment of monetary union spins out of control.

“France, Italy, and Spain should together pound their fists on the table, but they are not doing so because they delude themselves that they can go it alone,” he told Quotidiano Nazionale.

Should Germany persist in imposing its contractionary ruin on Europe – “should the euro break apart, with one exchange rate in the North and one in the South”, as he puts it – Germany itself will reap as it has sown. “Their exchange rate will double and they will not sell a single Mercedes in Europe. German industrialists know this but all they manage to secure are slight changes, not enough to end the crisis.” . . . .

. . . . Professor Prodi is the prime minister who prepared Italy for EMU in the 1990s, and then presided over the launch of the euro as European Commission chief. Some readers may remember that I crossed swords with him 15 years ago, but that dispute is ancient history now and has no bearing on today’s economic debate.

He rightly warns that nothing of substance will change as a result of the Bundestag elections. “German public opinion is by now convinced that any economic stimulus for the European economy is an unjustified help for the ‘feckless’ South, to which I have the honour of belonging. They are obsessed with inflation, just like teenagers obsessed with sex. They don’t understand that the real problem today in deflation, as I have been saying for a year,” he said.

This is the nub of the matter. The policy regime has become maniacally restrictive because every decision is filtered through “game theory” calculations, the belief in Berlin that the naughty Latins will somehow cheat unless their feet are held to the fire.

The ECB is playing this game too. It is no longer a central bank. It has become an enforcer of political pressure. The ECB is not even trying to meet its 2pc inflation target. It has abandoned its 4.5pc M3 money growth target and its twin pillar monetary structure. . . .

. . . . Be that as it may, Il Professore said the European Union – which he led for five years – has broken down as functioning system. “Today there is only one country and only one in command: Germany. “

He said it has long been obvious that Italy cannot restore control over its public finances in recession conditions. “The debt to GDP ratio has been rising for three years despite austerity. It is a failed policy.” (119.3pc in 2010, 120.8pc in 2011, 127pc in 2012, 132.3pc in 2013, according to the IMF’s Fiscal Monitor).

This too goes to the heart of the matter. Italy is a fiscal saint, the only major country in the industrial world to run a primary budget near balance for over seven years, and a surplus this year of 2.5pc of GDP. Yet the debt trajectory is accelerating upwards.

This is entirely due to the “denominator effect”. The contraction of nominal GDP – the result of a quadruple whammy of tight fiscal, tight money, tight credit, (regulatory overkill) and a Teutonic exchange rate – has forced Italy to service a rising debt burden on a shrinking economic base. It is a classic debt-deflation trap, as described by Irving Fisher 1933.

Il Professore says Italy should be given a waiver on the €51bn put aside in budget deficit calculations for EU bail-out policies, giving the country leeway for a mini-blitz on investment. Better still, the Maastricht treaty should be changed to eliminate the 3pc deficit ceiling. “It is stupid that this has not been changed for 20 years. A 3pc deficit makes sense at certain moments, at other times it should be zero, at others 4pc or 5pc.”

Stupidissimo indeed. But instead of revising Maastricht, Berlin has rammed through the even stupider Fiscal Compact, locking Europe into 20 years of chronic deflation and depression. (Yes, you could in theory offset that with monetary stimulus, but the opposite is happening. EMU monetary policy is becoming tighter and tighter as incipient deflation raises the “real” interest rate.) . . .

The Thousand-Year Conspiracy; by Paul Winkler; Charles Scribner’s Sons [HC]; 1943; pp. 15-16.

. . . . Charles Andler, a French author, summed up certain ideas of List in his work, The Origins of Pan-Germanism, (published in 1915.) ‘It is necessary to organize continental Europe against England. Napoleon I, a great strategist, also knew the methods of economic hegemony. His continental system, which met with opposition even from countries which might have profited from such an arrangement should be revived, but, this time, not as an instrument of Napoleonic domination. The idea of united Europe in a closed trade bloc is no longer shocking if Germany assumes domination over such a bloc—and not France. [Emphasis added.] Belgium, Holland, Switzerland, willingly or by force, will enter this ‘Customs Federation.’ Austria is assumed to be won over at the outset. Even France, if she gets rid of her notions of military conquest, will not be excluded. The first steps the Confederation would take to assure unity of thought and action would be to establish a joint representative body, as well as to organize a common fleet. But of course, both the headquarters of the Federation and its parliamentary seat would be in Germany. [Emphasis added.]”. . . .

“WW1 Cen­te­nary — His­tor­i­cal Revi­sion In British Gov­ern­ment Cir­cles”; Ger­many Watch; 6/11/2013.

. . . . This is a direct trans­la­tion of [Ger­man Chan­cel­lor] Bethman-Hollweg’s inter­nal memo on Germany’s war aims, from Sep­tem­ber 1914. . . .

“. . . . We must cre­ate a cen­tral Euro­pean eco­nomic asso­ci­a­tion through com­mon cus­toms treaties, to include France, Bel­gium, Hol­land, Den­mark, Austria-Hungary, Poland and per­haps Italy, Swe­den and Nor­way. This asso­ci­a­tion will not have any com­mon con­sti­tu­tional supreme author­ity and all its mem­bers will be for­mally equal, but in prac­tice will be under Ger­man lead­er­ship and must sta­bi­lize Germany’s eco­nomic dom­i­nance over ‘Mid­dle Europe’ . . .”

Germany Plots with the Kremlin; T.H. Tetens; Henry Schuman [HC]; 1953; p. 92.

. . . . The Ger­mans have a clear plan of what they intend to do in case of vic­tory. I believe that I know the essen­tial details of that plan. I have heard it from a suf­fi­cient num­ber of impor­tant Ger­mans to credit its authen­tic­ity . . . Germany’s plan is to make a cus­toms union of Europe, with com­plete finan­cial and eco­nomic con­trol cen­tered in Berlin. This will cre­ate at once the largest free trade area and the largest planned econ­omy in the world. In West­ern Europe alone . . . there will be an eco­nomic unity of 400 mil­lion per­sons . . . To these will be added the resources of the British, French, Dutch and Bel­gian empires. These will be pooled in the name of Europa Germanica . . .

“The Ger­mans count upon polit­i­cal power fol­low­ing eco­nomic power, and not vice versa. Ter­ri­to­r­ial changes do not con­cern them, because there will be no ‘France’ or ‘Eng­land,’ except as lan­guage groups. Lit­tle imme­di­ate con­cern is felt regard­ing polit­i­cal orga­ni­za­tions . . . . No nation will have the con­trol of its own finan­cial or eco­nomic sys­tem or of its cus­toms. [Italics are mine–D.E.] The Naz­i­fi­ca­tion of all coun­tries will be accom­plished by eco­nomic pres­sure. In all coun­tries, con­tacts have been estab­lished long ago with sym­pa­thetic busi­ness­men and indus­tri­al­ists . . . . As far as the United States is con­cerned, the plan­ners of the World Ger­man­ica laugh off the idea of any armed inva­sion. They say that it will be com­pletely unnec­es­sary to take mil­i­tary action against the United States to force it to play ball with this sys­tem. . . . Here, as in every other coun­try, they have estab­lished rela­tions with numer­ous indus­tries and com­mer­cial orga­ni­za­tions, to whom they will offer advan­tages in co-operation with Germany. . . .

Europaische Wirtschafts Gemeinschaft (European Economic Community–translation).

. . . At the moment the so-called “European Economic Community” is not yet fact; there is no pact, no organisation, no council and no General Secretary. However, it is not just a part of our imagination or some dream by a politician – it is very real. . . .

. . .  Its roots are in the economic co-operation of the European nations and it will develop after the war into a permanent European economic community. . . .

Discussion

3 comments for “Romano Prodi Calls for a “Latin Front” to Oppose German Domination of Europe”

  1. Oh great. This probably wasn’t the ‘front’ Prodi had in mind. The EU is getting a Tea Party:

    Le Pen and Wilders forge plan to ‘wreck’ EU from within
    Front National and Freedom party aim to exploit euroscepticism at European elections to block policymaking within parliament

    Ian Traynor in Brussels
    theguardian.com, Wednesday 13 November 2013 14.09 EST

    Two of Europe’s leading far-right populists struck a pact on Wednesdayto build a continental alliance to wreck the European parliament from within, and slay “the monster in Brussels”.

    Marine Le Pen, the leader of France’s rightwing nationalist Front National, and Geert Wilders, the Dutch maverick anti-Islam campaigner, announced they were joining forces ahead of European parliament elections next year to seek to exploit the euroscepticism soaring across the EU after four years of austerity, and the financial and debt crisis.

    Le Pen, who has predicted that the EU will collapse as did the Soviet Union, said the aim was to bypass Brussels and restore freedom to the nations and people of Europe.

    The rise of populists on the right and the left, from Sweden to Greece, has worried the mainstream EU elites and is already shaping policy ahead of the May elections. At the top level of EU institutions in Brussels, there is talk of “populists, xenophobes, extremists, fascists” gaining around 30% of seats in the next parliament and using that platform to try to paralyse EU policy-making.

    “This is a historical day. Today is the beginning of the liberation from the European elite, the monster in Brussels,” declared Wilders after meeting Le Pen in the Dutch parliament in The Hague. “We want to decide how we control our borders, our money, our economy, our currency.”

    The aim of the electoral alliance appears to be to form a Trojan horse in Brussels and Strasbourg: a large parliamentary caucus dedicated to wrecking the very institution that the far-right has entered. To qualify for caucus status, the new group needs at least 25 MEPs from seven countries, which they will get easily on current poll projections, although it is not clear if they can yet muster seven national parties.

    “We want to give freedom back to our people,” said Le Pen. “Our old European nations are forced to ask the authorisation of Brussels in all circumstances, forced to submit their budget to the headmistress.”

    Both politicians are currently riding high in the polls in their own countries. A poll last month in France put the Front National at 24% ahead of the governing Socialists and the mainstream conservatives. Wilders’ Freedom party, while suffering setbacks in elections last year, is currently leading in Dutch opinion polls.

    Eurosceptic parties or those actively committed to wrecking the EU and to ditching the single currency are also expected to do well in Greece, Austria, Sweden, Denmark, Poland and elsewhere in eastern Europe, while Nigel Farage’s UK Independence party is being tipped as a possible winner of European elections in Britain.

    “As a result of the economic fallout from the eurozone debt crisis, populist parties on both right and left have seen and will likely realise a significant surge in their popularity,” said analysts at the Eurasia Group. “The crisis has provided populist and nationalist parties with an excellent opportunity to clean up and modernise their rhetoric. Political parties hitherto thought of as ‘nasty’ or ‘racist’ can no longer be considered so.”

    Posted by Pterrafractyl | November 20, 2013, 12:08 pm
  2. Yeah, someone should probably look into the backroom IMF death threats:

    The Telegraph
    EU officials plotted IMF attack to bring rebellious Italy to its knees

    By Ambrose Evans-Pritchard Economics Last updated: May 15th, 2014

    The revelations about EMU skulduggery are coming thick and fast. Tim Geithner recounts in his book Stress Test: Reflections on Financial Crises just how far the EU elites are willing to go to save the euro, even if it means toppling elected leaders and eviscerating Europe’s sovereign parliaments.

    The former US Treasury Secretary says that EU officials approached him in the white heat of the EMU crisis in November 2011 with a plan to overthrow Silvio Berlusconi, Italy’s elected leader.

    “They wanted us to refuse to back IMF loans to Italy as long as he refused to go,” he writes.

    Geithner told them this was unthinkable. The US could not misuse the machinery of the IMF to settle political disputes in this way. “We can’t have his blood on our hands”.

    This concurs with we knew at the time about the backroom manoeuvres, and the action in the bond markets.

    It is a constitutional scandal of the first order. These officials decided for themselves that the sanctity of monetary union entitled them to overrule the parliamentary process, that means justify the end. It is the definition of a monetary dictatorship.

    Mr Berlusconi has demanded a parliamentary inquiry. “It’s a clear violation of democratic rules and an assault on the sovereignty of our country. The plot is an extremely serious news which confirms what I’ve been saying for a long time,” he said.

    There has been a drip-drip of revelations. Italy’s former member on the ECB’s executive board, Lorenzo Bini-Smaghi, suggested in his book last summer that the decision to topple Berlusconi (and replace him with ex-EU commissioner Mario Monti) was taken after he started threatening a return to the Lira in meetings with EU leaders.

    I have always found the incident bizarre. Italy had previously been held up an example of virtue, one of the very few EMU states then near primary budget surplus. It was not in serious breach of deficit rules. It was in crisis in the Autumn of 2011 because the ECB had raised rates twice and triggered what was to become a deep double-dip recession. Yet the blame for this disastrous policy error was displaced on to Italy’s government.

    Fresh details emerged this week in a terrific account of the crisis by Peter Spiegel in the Financial Times.

    The report recounts the hour-by-hour drama at the G20 Summit in Cannes as the euro came close to blowing up. It culminates in the incredible scene when President Barack Obama takes over meeting and tells the Europeans what to do, causing Chancellor Angela Merkel to break down in tears: “Ich bringe mich nicht selbst um.” I won’t commit suicide.

    That particular spasm of the crisis – and there have been three episodes (May 2010, Nov 2011, and July 2012) when the would have splintered without drastic action – was set off by the shock decision of Greek premier Georges Papandreou to call a referendum on the austerity terms of his country’s bail-out. He thought a vote was needed to stop Greece spinning out of control, and to pre-empt a possible military coup (as he saw it).

    Papandreou was hauled before the star chamber and literally crushed into silence by French leader Nicolas Sarkozy, who was waving his “Position commune sur la Grèce” like an indictment sheet.

    The FT report then reveals that the Commission’s Jose Manuel Barroso took charge of the executive details, orchestrating the Putsch that ousted Papandreou in Greece. In this case the EU picked ECB veteran Lucas Papademos to take over.

    Parliamentary formalities were upheld in both Italy and Greece. The presidents appointed the new leaders in each of the two countries. Both Monti and Papademos are honourable and dedicated public servants. Yet these were clearly coups d’etat in spirit, if not in constitutional law.

    David Marsh from the financial body OMFIF has called for a “Truth and Reconciliation Committee” to expose the abuses that have occurred in EMU affairs from the beginning. Something must be done to hold accountable those responsible for the fateful error of launching monetary union, and for the chronic mismanagement of the project thereafter.

    We are told that the euro crisis is now over. I do not see how one can safely reach that conclusion when Italy and Portugal are contracting again, and France is back to zero growth; or when lowflation/deflation is causing the debt trajectories of Southern Europe to spiral ever higher; all against a background of G2 monetary tightening in the US and China.

    There will be another spasm to this crisis. So who will Europe’s elites topple next, and what other conspiracies will they hatch to perpetuate a monetary venture that serves no worthwhile moral purpose? They must be stopped.

    Here’s a bit more on the scene that brought Merkel to tears. It yields some surprising insights into the mind of Merkel:

    Financial Times
    ‘It Was the Point Where the eurozone Could have Exploded’
    How the euro was saved
    Peter Spiegel
    May 12, 2014

    To the astonishment of almost everyone in the room, Angela Merkel began to cry.

    Das ist nicht fair.” That is not fair, the German chancellor said angrily, tears welling in her eyes. “Ich bringe mich nicht selbst um.” I am not going to commit suicide.

    For those who witnessed the breakdown in a small conference room in the French seaside resort of Cannes, it was shocking enough to watch Europe’s most powerful and emotionally controlled leader brought to tears.

    But the scene was even more remarkable, those present said, for the two objects of her ire: the man sitting next to her, French President Nicolas Sarkozy, and the other across the table, US President Barack Obama.

    It would be the low point in a brutal, recrimination-filled night, one many participants would recall as the nadir of the three-year eurozone crisis. Mr Sarkozy had hoped his leadership of the Group of 20 summit would cement his standing on the global stage en route to re-election. Instead, everything was falling apart.

    Greece was imploding politically; Italy, a country too big to bail out, appeared just days away from being cut off from global financial markets; and Ms Merkel, try as Mr Sarkozy and Mr Obama might, could not be convinced to increase German contributions to the eurozone’s “firewall” – the “big bazooka” or “wall of money” they believed had to grow dramatically to fend off attacks by panicking bond traders.

    Instead, a cornered Ms Merkel threw the French and American criticism back in their faces. If Mr Sarkozy or Mr Obama did not like the way her government ran, they had only themselves to blame. After all, it was their allied militaries that had “imposed” the German constitution on a defeated wartime foe six decades earlier.

    “It was the point where clearly the eurozone as we know it could have exploded,” said a member of the French delegation at Cannes. “It was the feeling [that with] the contagion, at this point, you were on the brink of explosion.”

    “Instead, a cornered Ms Merkel threw the French and American criticism back in their faces. If Mr Sarkozy or Mr Obama did not like the way her government ran, they had only themselves to blame. After all, it was their allied militaries that had “imposed” the German constitution on a defeated wartime foe six decades earlier.”

    Aha. Well, if that’s how it goes, a new Marshall plan should be just around the corner, right?

    Posted by Pterrafractyl | May 15, 2014, 9:04 am
  3. Here’s a fascinating look at how the German mainstream media is coming to grips with the fact that the country suddenly has a new empire:

    Der Spiegel
    ‘The Fourth Reich’: What Some Europeans See When They Look at Germany

    Following World War II, a German return to dominance in Europe seemed an impossibility. But the euro crisis has transformed the country into a reluctant hegemon and comparisons with the Nazis have become rampant. Are they fair? By SPIEGEL Staff

    March 23, 2015 – 04:28 PM

    May 30, 1941 was the day when Manolis Glezos made a fool of Adolf Hitler. He and a friend snuck up to a flag pole on the Acropolis in Athens on which a gigantic swastika flag was flying. The Germans had raised the banner four weeks earlier when they occupied the country, but Glezos took down the hated flag and ripped it up. The deed turned both him and his friend into heroes.

    Back then, Glezos was a resistance fighter. Today, the soon-to-be 93-year-old is a member of the European Parliament for the Greek governing party Syriza. Sitting in his Brussels office on the third floor of the Willy Brandt Building, he is telling the story of his fight against the Nazis of old and about his current fight against the Germans of today. Glezos’ white hair is wild and unkempt, making him look like an aging Che Guevara; his wrinkled face carries the traces of a European century.

    Initially, he fought against the Italian fascists, later he took up arms against the German Wehrmacht, as the country’s Nazi-era military was known. He then did battle against the Greek military dictatorship. He was sent to prison frequently, spending a total of almost 12 years behind bars, time he spent writing poetry. When he was let out, he would rejoin the fight. “That era is still very alive in me,” he says.

    Glezos knows what it can mean when Germans strive for predominance in Europe and says that’s what is happening again now. This time, though, it isn’t soldiers who have a chokehold on Greece, he says, but business leaders and politicians. “German capital dominates Europe and it profits from the misery in Greece,” Glezos says. “But we don’t need your money.”

    In his eyes, the German present is directly connected to its horrible past, though he emphasizes that he doesn’t mean the German people but the country’s ruling classes. Germany for him is once again an aggressor today: “Its relationship with Greece is comparable to that between a tyrant and his slaves.”

    Glezos says that he is reminded of a text written by Joseph Goebbels in which the Nazi propaganda minister reflects about a future Europe under German leadership. It’s called “The Year 2000.” “Goebbels was only wrong by 10 years,” Glezos says, adding that in 2010, in the financial crisis, German dominance began.

    For a long time, it was primarily the Germans who obsessed about their country’s Nazi past, but recently, other countries in Europe have joined them. Chancellor Angela Merkel with a Hitler moustache, German tanks heading south: There has been a flood of such caricatures in Greece, Spain, Britain, Poland, Italy and Portugal in recent weeks and years. And Nazi symbols have become de rigueur at anti-austerity demonstrations.

    People have even begun talking about the “Fourth Reich,” a reference to the Third Reich of Adolf Hitler. That may sound absurd given that today’s Germany is a successful democracy without a trace of national-socialism — and that no one would actually associate Merkel with Nazism. But further reflection on the word “Reich,” or empire, may not be entirely out of place. The term refers to a dominion, with a central power exerting control over many different peoples. According to this definition, would it be wrong to speak of a German Reich in the economic realm?

    A Shadow over the Present Day

    Greek Prime Minister Alexis Tsipras certainly doesn’t have the impression that he is free to steer his country’s policy as he likes. This Monday, he is in Berlin for meetings with the German chancellor, at which Germany’s national-socialist past will be a topic of conversation. Greece is demanding that Germany pay reparations for Nazi war crimes visited on the country during World War II.

    Those demands, of course, have much to do with the desperation now being felt by a government that has thus far acted with a significant degree of amateurism. But it would be a mistake to believe that the German past is no longer relevant. Again and again, it casts its shadow over the present day.

    A heavy accusation has been levelled at Germany — by some in Greece, in Spain and in France but also by some in Great Britain and in the United States. The euro crisis, a certain breed of politicians, journalists and economists argue, has allowed Germany to dominate Southern Europe and to suffocate it in order to impose its principles even as its export policy has meant that the country has profited from that same currency crisis more than any other country. Germany’s image in some countries has become one of an egotistical economic occupier flanked by smaller Northern European countries from the same mold.

    The accusations come primarily from opinion-makers in countries that have experienced years of mass unemployment and the anger is palpable, which is why the demons from Germany’s past are returning. And it is hardly surprising that those now suffering humiliation would demand payment of past debts. Germany’s historic guilt is now being wielded by the powerless as a weapon to make noise and be heard.

    Surveys abroad, to be sure, have found that Germans are widely respected overseas. But in Europe today, people are nevertheless quick to cry Nazi when German policy becomes uncomfortable.

    The accusations against the German government have a strange dialectic: Germany is dominating, people say, but it isn’t leading. It is a hegemon, but a weak one. That, too, leads us to history. In his 1987 book “From Bismarck to Hitler,” historian Sebastian Haffner wrote that turn-of-the-century Germany had an “unwieldy size.” It was, he said, both too big and too small. That may be true once again.

    How, then, does Germany’s role in Europe look at the moment when viewed from outside? And inside?

    ‘Tank Divisions of Yore’

    Next to the Milan stock exchange, not far from where an 11-meter (30-foot) tall sculpture of a middle finger offers its unique commentary on the decline of high finance, the headquarters of the newspaper Il Giornale can be found. There, in exactly the same office once used by renowned Italian journalist and author Indro Montanelli, Vittorio Feltri is now sitting. Seventy-one years old, Feltri has been a journalist for more than half a century with Corriere della Sera and other papers. Last year, he published a remarkable book together with another well respected journalist named Gennaro Sangiuliano, deputy head of news for the national broadcaster Rai 1. Its title: “The Fourth Reich: How Germany Subdued Europe.”

    It isn’t just desperate, radicalized demonstrators who draw comparisons to the past. Often, respected intellectuals and citizens who are free of financial concerns, like Feltri and Sangiuliano, do the same.

    The two authors see the euro as a means to a German end, writing that the common currency is reminiscent “rightly or wrongly ” of the “tank divisions of yore.” The euro, they believe, is to secure territory under German control. And Germany’s high court, the Bundesverfassungsgericht? “Sounds like a Wehrmacht weapon.” They write of Chancellor “Merkiavelli, in her pretentious headquarters, the “Kohlosseum,” and say that she is now completing the plan that Hitler failed to make reality. The book, says Feltri, is intended as a polemical tract meant to point out the “unsuitability of this common currency that only Germany is profiting from.”

    A large share of Italy’s political class shares Feltri’s view. Last year, the Social Democrat Romano Prodi, former president of the European Commission, raised eyebrows with an essay published in the periodical L’Espresso. “In Germany, populist and nationalist sentiments are covered by Merkel,” he wrote. “But in Brussels in recent years, only one country has determined the direction; Germany has even seen fit to teach others unacceptable moral lessons.”

    Whereas Italian Prime Minister Matteo Renzi is careful to emphasize his proximity to Germany, radical tones can be heard on the right wing. Germany expert Luigi Reitani said at a conference late last year that some in Italy have begun drawing “a line from the barbarian invasions via Bismarck and Hitler to Merkel.”

    Things sometimes sound similar in France. Arnaud Montebourg, who would later become economics minister, said in 2011 that “Bismarck united the German principalities to rule over Europe and, in particular, France. In a shockingly similar way, Angela Merkel seeks to solve her domestic problems by foisting the economic and financial order adhered to by German conservatives onto the rest of Europe.” In other words, Germany’s former expansionary policies have returned in the economic realm.

    Aggressive Trade Policy?

    The goods, to be sure, are sold without any form of coercion. Europe loves products from Germany, and Berlin’s export surplus in 2014 stood at more than 7 percent of economic output. An export surplus means that Germany, in trading with other countries, takes in more money than it spends on their products. The difference often flows back out of Germany in the form of so-called capital exports. In other words, banks in Germany loan foreign companies money so that they can buy German products.

    Since the turn of the millennium, Germany’s trade surplus has almost quadrupled and now stands at €217 billion ($236.4 billion). With France alone, the surplus was €30 billion in 2014. Even if exports to euro-zone member states dropped as a result of the crisis, no other country in the world has a trade surplus as large as Germany’s. Why is that? Is it because of aggressive trade policy?

    German economist Henrik Enderlein is not dogmatic and doesn’t view the world through a national lens. A professor of political economics at the Hertie School of Governance in Berlin, Enderlein studied in both France and the US, worked at the European Central Bank (ECB) and taught at Harvard. He is an economic advisor to Germany’s Social Democrats and his father was a politician with the business-friendly Free Democrats. “The fact that Germany today has the highest trade surplus of all countries has a simple reason,” he says. “After the introduction of the euro, we had no other choice than to become more competitive. But it is absurd to believe that Germany did so in order to harm other countries.”

    Enderlein believes that Germany didn’t consciously strive for its current roll but that it happened due to the structure of the euro zone. He also believes that the ECB is partially to blame because in the years after the euro’s 1999 introduction, the euro zone’s prime interest rate was kept between 3 and 4 percent. For southern European countries, this was much too low and led to a boom with rapidly climbing salaries and prices. For Germany, on the other hand, such interest rates were too high and employers had no choice but to keep salaries low so as to keep their products affordable. At first glance, that doesn’t seem aggressive, but southern European countries complained that Germany was guilty of “wage dumping,” or keeping domestic wages artificially low.

    The resistance to rising wages led to German growth, self-confidence and, as a result, power. When Angela Merkel travels to Brussels, she does so as the leader of by far the strongest economy in the euro zone. Policies she doesn’t agree with don’t get passed. Power as such isn’t a bad thing when those that have it use it wisely. But do they?

    There is a new tone in Germany. It is one that no longer abides by the noble customs of diplomacy. Whispering, suggesting and hinting have been replaced by ranting and blustering.

    Here is what this new tone sounds like coming out of the mouth of German Finance Minister Wolfgang Schäuble. Of Greece, he said that “a country that for decades has suffered and lived far beyond its means due to the failure of its elite — not because of Europe, not because of Brussels and not because of Berlin but exclusively because of the failure of its elite — has to slowly come back to reality. And when those responsible in this country lie to their people, it’s not surprising that the people react as they have.” He made the comments last Monday at an event hosted by the center-right foundation Konrad Adenauer Stiftung.

    Triumphalism

    The day before, Bavarian Finance Minister Markus Söder sounded similarly aggressive during an appearance on a German talk show with Greek Finance Minister Yanis Varoufakis. He didn’t miss a single opportunity to gloat about Bavaria’s economic and financial strength.

    Volker Kauder, the conservatives’ floor leader in German parliament, is the author of a particularly triumphalist example of the new tone, uttered way back in 2011. At a party conference of Merkel’s Christian Democrats in Leipzig, Kauder said in a speech: “Suddenly, German is being spoken in Europe.” Though CDU delegates loved it, the sentence was not well received further afield and Kauder now says he wouldn’t repeat it.

    Merkel, of course, would never adopt such a tone, at least not publicly. She is more careful, her utterances sometimes so twisted that it isn’t immediately obvious what she is trying to say. Last Tuesday, she told conservative parliamentarians in Berlin that “Germany must be a country that doesn’t leave anything untried in the search for progress.” She meant progress elsewhere, in Greece.

    The chancellor has an expansive project that is to ultimately result, one could say tongue in cheek, in a Merkel Reich. She isn’t nearly as focused on Europe as her predecessor Helmut Kohl, who wanted to see Germany dissolve into the European Union. Merkel thinks more in nation-state terms, but she knows that Germany alone will have little influence on the world. Countries that want to have a say must have a large population and a strong economy. Germany has the latter, but, relative to China or the US, lacks the former — which is why Germany needs populous Europe. But it must be a competitive, economically powerful Europe — and that is what Merkel is working toward.

    Early on in the euro crisis, she developed ideas for so-called bench-marking. The concept called for European countries to be measured in several categories against the best in that category, which was often Germany. In this way, a German Europe would be created.

    In the battle against the debt crisis in Ireland, Spain, Portugal, Cyprus and Greece, Europe considered two different approaches. The southern countries wanted to stimulate growth through increased spending in the hope that state revenues would climb. Germany and northern European countries, by contrast, preferred cost cutting and structural reforms, an approach that made significant demands of the citizens of the countries affected.

    The economically powerful Germany got its way. In order to put the struggling countries on the right track — on the German track, that is — Merkel brought in the International Monetary Fund so as to free Germany from having to play the strict overseer. Still, it has not escaped notice that Berlin is in charge.

    From an early point in the crisis, other European leaders dared to protest openly. Then Polish Prime Minister Donald Tusk said that he had “fundamental doubts about the method” and asked Merkel at an EU summit: “Why do you have to foment division?” But three quarters of a year later, Merkel got her way with the passage of the rather German concept of a “fiscal pact.” In addition, EU leaders agreed to anchor debt limits in their national constitutions, to impose stricter penalties for those who exceeded maximum deficit limits and to pass structural reforms on the model of those Germany passed from 2003 to 2005. German sociologist Ulrich Beck, who has since passed away, referred to the pressure being exerted on Europe from Berlin as “Merkiavellismus.”

    The Dominance of Others

    Bismarck’s reich, under Emperor Wilhelm II as of 1888, was also of an awkward size. It was too large in the sense that it was the most powerful state in Europe, leading France, Britain and Russia to all feel threatened. But it was too small to rule over Europe by itself. The Germans too had to form alliances — and the internal and external logic of these alliances was one of the most important reasons for the outbreak of World War I. The Kaiserreich lost, and broke apart in 1918.

    Hitler believed that his “Greater Germany” was large enough to rule over Europe, but he was badly wrong. Even with the most brutal of war tactics and oppression, Nazi Germany was unable to defeat the Allies.

    After the end of the Third Reich, German dominance on the Continent appeared to have been rendered an impossibility for all time. West Germany and East Germany both were initially tentative states that more or less willingly subordinated themselves to their big brothers, the US and the Soviet Union. They ceded to the dominance of others.

    West Germany, though, soon developed a new — economic this time — instrument of power: the deutsche mark. Because the West German economy grew rapidly and its sovereign debt remained relatively manageable, the German central bank, the Bundesbank, dominated economic and financial policy in Europe in the 1970s and 80s. Governments in France, Britain and Italy paid close attention to the decisions being made in Frankfurt. Shortly before German reunification, a senior official in the office of the French president was quoted as saying: “We may have the nuclear bomb, but the Germans have the deutsche mark.”

    François Mitterrand, president of France when the Berlin Wall fell, was not a fan of German reunification. He was afraid that a German colossus in the middle of Europe might soon begin seeking political dominance once again. British Prime Minister Margaret Thatcher believed so too, as did many Germans, particularly on the left wing. Author Günter Grass believed the country would return to its old hubris, its feeling of superiority.

    German national team trainer Franz Beckenbauer seemed to confirm as much in 1990 when, after winning the World Cup in Italy, he said: “We are now that number one in the world after long having been the number one in Europe. Now, we are getting the players from (East Germany). I’m sorry for the rest of the world, but the German team won’t be beatable for years to come.”

    In the political realm, too, there were occasional signs of megalomania. Chancellor Helmut Schmidt believed himself to be the best economist in the world in the late 1970s and early 1980s. When he met with US President Jimmy Carter, he didn’t see it as a meeting between the big US and little Germany, he saw it as a meeting of big Schmidt and little Carter — and not because of their physical sizes. Then, in the 1990s, came Oskar Lafontaine, a member of the Social Democrats at the time. As German finance minister in 1998, Lafontaine undertook the first effort to rebuild Europe according to Germany’s vision. Because he wanted to harmonize European financial markets and was fighting for a currency union, the British tabloid Sun wondered if he was “the most dangerous man in Europe.”

    Too Small and Hesitant?

    Ultimately, Lafontaine failed, and the German national team likewise experienced its share of losses, at least until 2014. Furthermore, united Germany initially kept a low political profile and remained modest. But then, the euro arrived, which Mitterand hoped would take away Germany’s “nuclear bomb.” The euro was supposed to break Germany’s economic dominance, but it has had the opposite effect. The shared currency has bound together the fates of euro-zone member states and granted Germany power over the others.

    Which is why the “German question” has returned. Is the new Germany too big and powerful for the other European countries or is it too small and hesitant?

    Hans Kundnani is head of research at the European Council on Foreign Relations, a pan-European think tank based in London. His focus is German foreign policy and he has written a widely noted book about Germany called “The Paradox of German Power.” Kundnani links the old German question with the new debate about Germany’s role in the euro zone. The strength of Germany’s economy combined with mutual dependence of the member states has created, he argues, economic instability that is comparable to the political instability that characterized the Bismarck era.

    The problem, Kundnani believes, is not so much that Germany is exercising hegemonic power in Europe, but that it is only halfway exercising such power. It is focused entirely on itself — and it may be too small for the role that it should be playing.

    “Germany is once again a paradox. It is strong and weak at the same time — just like in the 19th century after unification, it seems powerful from the outside but feels vulnerable to many Germans,” Kundnani writes. “It does not want to ‘lead’ and resists debt mutualization, but at the same time it seeks to remake Europe in its own image in order to make it more ‘competitive.'”

    “Lead,” in this context, means to frequently pay, which is also how Varoufakis sees things. The Greek finance minister wants Merkel to establish a kind of Marshall Plan, just like the US once did to get postwar Europe back on its feet.

    A real hegemon like the US, Kundnani writes, doesn’t just establish norms. It also creates incentives for those it rules over so that they remain part of the system. To do so, it must compromise in the short term so as to secure its long-term interests.

    ‘More Like an Empire’

    Germany, to be sure, has been the primary backer of two Greek aid packages, but they haven’t proven sufficient. The new Greek government aims to fundamentally change the euro zone, establishing more mutualized debt and fewer German rules. Others agree. “This is not a monetary union,” the Financial Times wrote back in May, 2012. “It is far more like an empire.”

    The investor George Soros warned that Europe could become split between countries with trade surpluses and those with deficits, describing it as a German empire in the middle of Europe with the periphery as its hinterlands. Empire, of course, is another word for Reich.

    In today’s world, dominated as it is by economic issues, rulers and the ruled have ceded their historical roles to creditors and debtors. Germany is Europe’s largest creditor. Creditors have power over the debtors: They expect gratitude and they often have clear ideas regarding what the debtors must do so that they can one day pay back the money they owe. Creditors are not generally well liked.

    Creditors want to have power over their debtors because they are afraid. Afraid that they won’t see their money again. Germany could pay Greece’s debts, but not those of Italy and Spain.

    Germany may be big enough to impose its rules on Europe, Kundnani writes, but it is too small to be a real hegemon. Just like it was before World War I, Germany is afraid of being encircled by smaller countries. A part of that fear is that the ECB could ultimately be controlled by Southern European countries and that the power could be transferred to the debtor countries.

    Germany is acting not like a hegemon, but like a “semi-hegemon.” It is an argument previously made by the German historian Ludwig Dehio in describing Germany’s position in Europe after 1871. Though the context was radically different, former Polish Foreign Minister Radoslaw Sikorski also said in a speech in Berlin in November 2011 that he was less afraid of German power than he was of German inaction and urged Germany to take the lead in Europe.

    Kundnani has observed a tendency for Germans to see themselves as being the real victims of the euro crisis — a view that is in diametric opposition to how debtor nations see things. Aggression is the result, to be seen in the new political “tone” in Germany or in the German tabloid Bild, which never tires of calling the Greeks “greedy.”

    Misguided Nazi References

    Whereas Germany has dominated Europe economically during the euro crisis, it has remained a foreign policy dwarf. The apex of this refusal to play a significant political role was its abstention in March 2011 United Nations Security Council vote on the NATO intervention in Libya. European partners like France also saw the vote as a step backwards for Germany. After all, the country had been involved in the Kosovo air strikes as well as the Afghanistan war.

    Viewed superficially, the call for more German leadership, which has been heard from many Eastern European countries in recent years, stands in marked contrast to the complaints of Germany’s economic dominance. But the two are connected. Germany seeks to be an economic power, but not a military one. Its nationalism is based on economic output and export statistics, not on a desire to become a geo-political power. The same dilemma can be seen in the role Germany has played in the Ukraine crisis.

    Germany, Kundnani writes, “is characterized by a strange mixture of economic assertiveness and military abstinence.” For that reason alone, the references to the Nazi period are off base. It is not about violence or racism. It is about money. And that is a vast difference, even if monetary questions can be uncomfortable as well.

    But an empire is in play, at least in the economic realm. The euro zone is clearly ruled by Germany, though Berlin is not unchallenged. It does, however, have a significant say in the fates of millions of people from other countries. Such power creates a significant amount of responsibility, but the government and other policymakers nevertheless sometimes behave as though they were leading a small country.

    Germany is, in fact, not big enough to solve the problems of all the others with money. But it would still be important sometimes to show more greatness, sometimes by way of generosity. And it would certainly be easier to make progress in Europe without the new polemic tone from Munich and Berlin. Power and greatness can sometimes be shown by ignoring the inappropriate comparisons, or by elegantly refuting them.

    While it was nice to see a long article reflecting on the fact that “an empire is in play, at least in the economic realm,” it was still somewhat disturbing to see a long list of examples of how Berlin is effectively running Europe coupled with discussion of the view that “Germany is too small and hesitant to effectively lead” and his really just a “semi-hegemon”. Is that the best take away lesson here?

    Posted by Pterrafractyl | March 24, 2015, 12:29 pm

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