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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. . . .


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.


    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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