No is not an acceptable answer Reich Kanzler. Is Reich Kanzler Merkel’s refusal to accept responsibility for the Euro disaster a sign of strength or weakness?
There has been an assumption that the refusal of Germany to shoulder its responsibilities for the Euro Zone disaster was a sign of German strength and dominance in Europe, but the real situation may be very different.
Reich Kanzler Merkel has been risking global recession in an attempt to hang on to her voting base ahead of next year’s German elections. This is more like a rabbit frozen in the glare of an oncoming car’s headlights than a powerful world leader.
It is easy to forget that Merkel is a child of the best forgotten East Germany with its Stazi. There is little to choose between any brand of National Socialism and that was demonstrated by the ease with which Nazis slide effortlessly into positions of power under USSR rule. There are persisting claims that Merkel was herself a Stazi informer. Whether these claims are based on hard evidence, or just on the assumption that anyone who benefited in education and relative wealth in East Germany must have been an informer or a Party Member, is unclear. Rumors aside, Merkel is terrified for sliding back into the mess of East Germany or the even more serious environment of post-1918 Weimar. She is haunted by visions of Germans taking wheel barrow loads of money to the baker in the hope of buying a loaf of bread. More chillingly, she must have received accurate briefings on the German economy.
Since the West Germans bought East Germany off the imploding USSR, West German taxpayers have been shipping large amounts of money East to bail out the East Germans. Now, the ambitions of the German political elite bring a responsibility for an even larger bail out of Southern Europe. This is not a well-received prospect for German taxpayers. As was the case with East Germany, the economic wasteland of Southern Europe is far worse than anyone appreciated. The situation is so bad that it may have delayed action by the finance markets because it is too bad to save and too bad to fail. Somewhere there will be very deep pain that investors and politicians alike have been praying will not happen.
Eventually, something big has to break.
The world hope was that Germany would eventually be forced to stand up to its responsibilities, take a deep breath and then start bailing out the Euro Zone.
The German hope has been that it can shrug off its responsibilities and see Britain and the IMF bail the Euro Zone out.
The French hope has been that the Chinese, Russians and Brazil will bail the Euro Zone out.
The political elite of the Euro Zone assumed that all they had to do was issue threats and everyone else would reach for their cheque books. It never seems to have occurred to them that only they are deeply wedded to the Euro and the Federal European Project. When even their own electorates now do not support the Euro and Federal Project, it is extraordinary to think that anyone outside the Euro Zone has any political belief in their new World Super state under German control. To encourage support from outside, the Germans have to give the World something in return and German world domination is not what that something is. Since the formation of a unified Germany, Europe has suffered three major wars, two of which engulfed the world. In each of those wars, France received a severe thrashing, which explains why Sarkozy is happy to be a German poodle. The prospect of a German unified Europe is beginning to sound alarm bells in capitals around the world. As German political rhetoric sounds increasingly like retreads of Hitler speeches, those alarm bells ring ever more loudly and make bail outs from outside the Euro Zone less likely.
Other countries are beginning to think that the pain of a recession caused by the Euro Zone may be a price worth paying and less than the cost of later standing up to the Forth Reich. People are beginning to remember the cost of appeasement of Berlin before 1939. Standing up to Germany in the 1930s would have stopped Hitler in his tracks and a global war would have been avoided.
The changing political landscape is not the only factor that is speeding the Euro disaster.
In the beginning every country in the Euro Zone and the Eurocrats in Brussels denied that the Euro was in trouble, even though they had at least some idea of the depth of the problems. Then Ireland and Portugal and Greece needed emergency loans to avoid having to default. In each case there were denials right up to the point where the lies were completely exposed. Ireland accepted emergency loans and became a subservient district of Germany, having to present its budget plans to Berlin before presenting them to Irish Parliamentary Representatives. Portugal is hovering at the point where it may have to allow Germany to chose a new government for Portugal. In Greece and Italy, German coups have seen the democratically elected governments replaced by “technocratic Governments” (or Eurocratic Governments) under prime Ministers approved by Germany and not by their own electors. Spain and France are now on the brink of following Greece, Ireland, Portugal and Italy.
The assumption has been that Europe, and even the Euro Zone, is rich and the Euro Zone countries can solve their own problems if they really wanted to. The reality is starting to look very different.
Only Germany looks able to fund itself out of all the Euro Zone economies, but even in Germany the cracks are starting to open.
The developing crisis is looking more like the Great Depression as each day goes by. The only question is whether it is now too late to take positive action.
If the Euro Zone announced that it was going to disband, there would be some market relief and the rest of the world could begin to halt its slide after the Euro Zone. Within the former Euro Zone there would be pain in every former member and the difference would be in the level of individual pain. However, once Euro Zone members again become fully sovereign countries again, they could take steps to begin a stabilization and the IMF would be able within its rules to start helping each country. The main losers would be Merkel and Sarkozy because their electorates would take the first opportunity to vote them out of office – but then that is probably their fate anyway. It would also be bad news for the army of Eurocrats who have been sucking Europe dry with their corrupt and incompetent government of the EU.
If the Euro Zone continues to ignore reality, the crisis will be beyond the ability of the IMF to mitigate disaster. Euro Zone countries will start to default and that could now include Germany.
The question that is now emerging is: Would it really be a bad thing for the Euro Zone countries to default?
Even days ago, an unthinkable question is now looking valid. What is making it valid is that it would speed the formation of a new world economic order and the total cost to the global economy is looking to be far less than the cost of propping up a currency that is still more likely to fail than to survive.