Yesterday was International Workers’ Day. It was celebrated all over Europe with public holidays. It is a bit ironic that on the day that Europeans celebrate our workers so many millions of these workers are on the dole. Traditionally, periods of high unemployment are also periods of social and political change. It is easy to see how the present levels of unemployment might lead to political U-turns.
Today, unemployment in Spain is 23.6%, Greece 21%, Portugal 15% and Ireland 14.7%. Greek, Italian, French and Irish voters will all be given a chance to express their preferences over the coming weeks and months. Although some of the political elites are trying to divorce local difficulties from greater European issues, everyone realizes that it is mendacious to try to do so because policy is being set in Europe.
And it is not just policy that is being set in Europe. Governments too are being determined by EU technocrats. This is extremely dangerous. Lest we forget, in the past six months, two legitimate national governments have been deposed by the EU. The democratically elected leaders of Italy and Greece have been thrown out and replaced by technocrats. These are now EU puppet governments. In Ireland, the government’s job, to use the words of one of our senior Labour politicians has been reduced to “policing” EU agreements.
The biggest loser in all this, if other electorates turn, is going to be the German view of the European Union.
Are we seeing the beginning of a process whereby Germany becomes isolated in Europe?
The Germans know that they do not yet have the “permission” to behave like a bully in Europe. If they overstep the mark, most countries have sufficient collective memory of German “form” to react in the expected way.
But Germany itself is changing too.
We now know that the design flaws of the Maastricht Treaty that created the rationale for European monetary union in 1992 have been exposed by the current sovereign crisis. Convergence, the mantra of EU central bankers, politicians and bond dealers in the 1990s, has proved a cruel mirage.
The Mediterranean did not magically transform into Greek, Italian and Spanish templates of sober, inflation obsessed, high savings, high tech Germany. Nor did we become a Celtic version of the Saxons.
The Euro triggered a tsunami of wasteful fiscal spending in Greece and Portugal, the loss of export markets for family owned Italian firms dependent on lira devaluations and an epic construction bubble in Spain whose denouement has devastated its banking system and cajas. Ireland has mirrored Spain.
“Convergence” was an illusion in Europe and the ECB’s “one size fits all monetary policy” was a disaster under Wim Duisenberg, Trichet and possibly even Draghi. Europe simply did not meet the economic model of an optimal currency area even a decade after the creation of the ECB and the Euro.
Germany has unquestionably benefited from the Euro project, the strategic goal of every postwar German chancellor since Konrad Adenaur. The people of Germany loved their Deutsche Mark but German industrialists dreamed of having a cheaper currency. Within the Euro, German business created a trillion euro export colossus and accumulated the world’s largest trade surplus. In fact, the crisis in peripheral Europe benefited Deutscheland AG since it triggered a devaluation of the Euro against the dollar and the Chinese Yuan, increasing Germany’s most important trading partner.
Just examine the graph, which shows the different unemployment experience of Germany versus Spain, Ireland and Italy. German unemployment is now the lowest in twenty years, while the rest are experiencing something quite different.
By using the French-German axis, symbolized by the term “Merkozy”, Berlin has emerged as the geopolitical and financial hub of 21st century Europe. Germany is no longer an American appendage, occupied and self-conscious, but the strategic partner of Russia and China in the brave new world of international power politics.
Ever since the Greek debt crisis escalated in May 2010, Germany in Europe has imposed its fiscal diktat: austerity and cuts in government spending in exchange for Troika bailouts.
But all is not rosy in the Teutonic garten. The Bundesbank was forced to acquiesce in the ECB’s giant “cash for trash” scheme. In addition, in recent weeks Chancellor Merkel’s insistence on balanced budget amendments in the “fiscal compact” which is supposed to seal German dominance in the EU is running into trouble.
The Dutch budget crisis, Nicholas Sarkozy’s humiliation in the French elections and the Spanish repudiation of its deficit targets are all symptoms of a new backlash against the German vision for Europe.
In the past week alone, there have been safe haven flows into German Bunds and US Treasury debt and rumours that the Bundesbank is secretly preparing for the end of the Euro. (These rumours are now monthly occurrences in financial markets.) However, if the Elysee Palace in Paris under Hollande were to become a fulcrum of anti-austerity, the Germans could look quite isolated and the unthinkable could become thinkable.
Berlin is losing its tenuous power to dictate the future of Europe.
But what happens if Germany decides it doesn’t care? Yes it is looking isolated, but what if the Germans’ patience with the rest of us is also fraying?
If Germany keeps being blamed for the woes of others and if it senses that it is surrounded by a bunch of ingrates who assume that Germany will write the cheque every time, might the Germans themselves get fed up?
Sometimes when we listen to the debates here on the fiscal compact, we could be forgiven for thinking that the world is waiting for us to make up our minds. This is not the case. The world is moving very quickly, with many parts in motion. We are now part of a European process.
Up to now, the talk has been that certain countries — Spain, Italy and Greece – might go it on their own, but what if the country that breaks ranks is Germany?
Have we considered that one yet?
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The Germans did not dream of the Euro, far from it! It was sold to the German public as the price to be paid for Allied approval of re-unification. France and Britain were opposed to re-unification as it meant Germany would
be the largest country with 80 million people as compared to 55-60 millions in France, Britain and Italy. France demanded the EMU as a way to reduce the power of the Bundesbank who had practically defined monetary policy in Europe for a number of years, very much to the dislike of
France and Britain.
Compass Alignment
So David ,I believe , is saying The West goes East because what will be left is not worth staying around for .
We ‘ en peripherique ‘ will be left with an Outback where you drive for miles and meet no one …..at least that is the Idea.
Where old technology will be the same as the modern technology only different . The Amazon comes to mind.
Amazon Jungle
Welcome to Euramazon where the new King Tarzan will be Hollande and all the little animals will be caged to be fed their daily rations . There will be full employment and lots to do ………..and to pay back in your lifetime.
The single European Currency was being talked about as far back as the 1930’s in Germany.(see http://awakenlongford.wordpress.com/2012/04/26/living-history-the-road-to-europe-was-not-paved-with-good-intentions/ ) I will assume that if Germany decides to go it’s own way that will be the end of the Euro, and maybe, just maybe, that’s not a bad thing. For the Euro to be imploding as it is, at such a young age, is absolutely astounding and proves what an ill conceived project that it was. I believe that the ordinary man in the street in Ireland hasn’t up to now, given much thought to our Government being redundant, to handing all… Read more »
Just a quick mention, off topic somewhat, my friends,
As 2016 is approaching fast, what are was supposed to celebrate at Easter 2016?
Our Sovereignty?
Our Independence?
Our intention to stand free as a Republic?
Maybe the reading of the Proclamation at Easter 2016 will not be the symbolic gesture it is now, but more an actual call to action for the second time!
Hi David, Here is a YouTube video that quickly gets to the core of the European stability Mechanism THE SHOCKING TRUTH OF THE PENDING EU COLLAPSE! http://youtu.be/EPcWHBPYOSU
In answering David’s question, I would say that: 1) The German people, in general, are profoundly Euorpean and patriotic German sentiments of superiority is expressed through harmless proxies such as cars, sports and beers; 2) Also, the German design for Europe since WWII has not been to dominate and is still not the case. The strongest evidence of this came from Poland’s finance minister a few months ago who encouraged Germany to step up it’s leadership and not step down! 3) Germans are practical and know that the Euro is of huge benefit to them; 4) Unfortunately, the German people… Read more »
Good article The Stability Treaty leaflet is out. It says that the treaty will tackle the economic crisis, ensure Ireland can get funding and restore international investor confidence and lead to social cohesion. Sounds good doesn’t it? But this just sounds like the hot air being blown by our politicians since the crisis began and we have stopped listening to them. Can they put numbers on their claims? No. I suspect they are just winging it If Ireland votes yes then what? If Ireland votes no then what? Why vote for more austerity when this is not in the interests… Read more »
Pauldiv, a small piece of your wish, maybe! 1.All Government Budgets will be balanced, or in Surplus. Annual structural deficits must not exceed 0.5% of GDP. = NO JOBS NO GROWTH 2.Countries which are able to maintain Government debt levels below 60% will be rewarded by being allowed to have deficits up to 1.0% of GDP.MAYBE JOBS MAYBE GROWTH 3.The above rules will be introduced into member states Constitutions or the legal equivalent. This rule will contain an automatic correction mechanism that shall be triggered in the event of a deviation from the rule, the correction mechanism will be defined… Read more »
I wanted to find out what people say about Larouch Pac. This is the crew Georg hates with a vengeance
Lyndon LaRouche’s Long Campaign
http://www.rickross.com/reference/larouche/larouche16.html
LaRouche? I was just called by LaRouche PAC. Can DU educate me?
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132×2335574#2335577
Interesting stuff
Hi David, I am in Frankfurt at the moment, flew up from Oz on Monday, heading back home on the red eye on Friday night, you know how it goes …….you sparked this memory of this post that I threw into the mix back almost 3 years ago….. Jasus you can read these clowns like a book….. 1. Jim says, May 20, 2009, 2:13 am Given that Europe will invariably bail out Ireland, and later on Ireland will ratify the Lisbon Treaty, it seems to me that the Dail per se will be downgraded to the level of a glorified… Read more »
Personally, I don’t beleive in the isolation of any country. The regime might need to be isolated, from time to time, for countries like North Korea, Zimbabwe, and Syria – because of the way they abuse the people. But the isolation of a country is a serious matter, even on a minor scale. News in, and this is a serious blow to Sarkozy. Basically one of the serious candidates on the French Presidential race, and probably the one who talks the most sense of the lot of them, has decided to back Hollande. http://www.telegraph.co.uk/news/worldnews/francois-hollande/9244402/France-elections-2012-Francois-Hollande-scents-victory-as-he-gets-backing-of-Francois-Bayrou.html Melanchon has already also plumped for… Read more »
Is Tony Brogan out there tonight? Tony, silver down quite a bit today. What’s going on and should you buy on this current dip or wait a bit for even bigger dips?
Look David if Ireland was to leave the euro and Europe and we could not borrow money from any one would we become a third world country.
Or would we survive ,I keep going back to how a business is run if you run a business the way Ireland is run how long would the business survive.
Hi All! I am not a Fianna Fail voter, or in anyway affiliated to them. So it is has stunned me that one of the best, maybe most genuine, intelligent and respectful consideration of what this referendum and these treaties entail seems to have come from a longtime serving Fianna Fail member…. ….Eamon O’Cuiv I know someone posted link to this under a previous DMcW Article, but I genuinely thought that it might be of interest to everyone on this blog and its readers to post the excerpts from his speech here? I am interested in what people here think…… Read more »
Breaking news………..
Pinochico taking Irish Government to European Court,claimimg damage to reputation…
AL Queda distance itself from Vatican claimimg they have gone too far and our operating without any decent morale or human restraint.
Martin Sheen has been asked to go up river to elimante with extreme prejudice , Colonel Kurtz [Cardinal Brady].Church claims if Sheen captured they will deny any knowledge of his existence………….
Tanasite Gilmore claims he “did not”make ANY decisions yesterday and says rumours saying he did are unfounded and a attack on his person and his party……
Meanwhile , in Afghanistan…same shit,different day.
Good Morning
Not my favourite politician. Is there any substance behind these claims that a Yes vote will result in a further 6 – 8 Bn in cuts?
http://www.irishexaminer.com/breakingnews/ireland/adams-challenges-government-to-present-post-treaty-figures-550253.html
It seems to me like it’s a choice between spam or sausages. Either way it’s crap.
Since Germany is in focus, here is what is going on, (and it is not a tantrum) More Opposition to Fiscal Pact in Germany May 3, 2012 (EIRNS)–While a broad range of leftist extra-parliamentarian opposition is consolidating nationwide in Germany for protest rallies and other events against the Fiscal Pact, opposition is also building in the Bundestag, among the established parties there. Following a manifesto f the SPD party left (DL21) which is being circulated now, an anonymous German Social Democrat has placed a statement on Facebook, for Facebookers to sign up on a call to the Bundestag to reject… Read more »
More on what is happening in Germany, and there is yet more below. None of this is on RTE, so maybe Enda does not know… Finally, Some Anti-ESM Groups Take to the Streets (as the BueSo Told Them) May 2, 2012 (EIRNS)–The Zivile Koalition group and the website abgeordnetencheck.de have, as they told the press yesterday, have mobilized 600,000 e-mails already in protest against the ESM. The aim is to reach, or get as close to as possible to, 1 million. The e-mails are sent by citizens to members of the Bundestag, demanding that the Parliament vote “no” on the… Read more »
We had Merkozy, so how about M&M’s (a type on Bonbon I suppose, but not recommended for mental health) !! Secret Monti-Merkel Pact To Ratify the ESM/Fiscal Pact Replaces “Merkozy” Duo May 1, 2012 (EIRNS)–Former Italian Foreign Minister Lamberto Dini has confirmed the existence of a secret plan between Monti and Merkel to replace the Merkel Sarkozy “Merkozy” axis in anticipation that Socialist François Hollande will win the French election on May 6, to ensure that the Fiscal Pact is not modified as Hollande has demanded. The new “MM” Berlin-Rome Axis would ensure the ratification of the ESM and the… Read more »
From France a reasoned and clear statement, very relevant now that O’Cuiv has spoken out. Hollande’s crowd after all opened the door to the financial mess, but it seems something has changed. Presidential Candidate Cheminade: “What I Will Vote for on May 6” May 3, 2012 (EIRNS)–In anticipation of the May 6 run off election in France between Nicolas Sarkozy and François Hollande, former Presidential candidate Jacques Cheminade issued a statement on May 3 with the above title. It begins: “I will not vote for Nicolas Sarkozy. Through his bowing down to financial forces, he is responsible for the current… Read more »
Gerry Adams makes a very clear distinction here :
People must decide between austerity or jobs and growth
http://www.sinnfein.ie/contents/23121
Hollande also wants a growth pact, and Draghi’s reaction is most interesting (from a bankers POV).
@ cooldude As I have said before, I do not see money itself as the problem. Therefore money itself cannot be the solution. This issue of fiat versus commodity money is an irrelevance. [At the same time I accept that investing in gold today may be a wise decision; though I would think that land, if you can get it, would be even better. Remember, if gold is used in the creation of the new world reserve currency, there is a possibility of confiscation or compulsory purchase.] So to say something about your monetary solution. We cannot resolve the problems… Read more »
Situation in Sarkozy’s political meetings are becoming extremely worrying. Several journalists (whether right or left leaning) have been agressed verbally and physically while covering such meetings. Some were thrown bottles of water at, others had their hair pulled, their badge forcibly removed, punched in the back, pushed… Sarkozy has been claiming that journalists have been partials against him and have slandered his name. Asked after one of those agressions if he has anything to say, he replied “I do not condone violence but one has to understand that these people are extremely angry at the news coverages against me”. So,… Read more »
Another housing bubble caused by the EU and ECB.
And this is about to fall in a heap…
http://www.telegraph.co.uk/finance/economics/houseprices/9244152/France-faces-40pc-house-price-slump.html
The Euro is a disaster.
For the Germans, the scale of the bailout is about to get extreme….
As DMcW asks what if? Well look at what Berlin has to deal with: Eurosystem Concentrates Insolvency Risk on Bundesbank “Target-2 payments system is the hydrogen in the {Hindenburg}” May 4, 2012 (EIRNS)–Thanks to the Euro transfer system called Trans-European Automated Real-Time Gross Settlement Express Transfer System, or “Target-2,” the risk of insolvency of a national banking sector or of a single large bank has been concentrated in one central bank, the Bundesbank! Target-2 is a clearing house system, by which part of the money transferred between Eurozone banks goes through their respective central banks. Money is never transferred physically,… Read more »
IN ORDER TO CONTROL A NATION EXISTING AUTHORITY MUST BE REPLACED
TO REPLACE AUHORITY IT MUST FIRST BE DISCREDITED.
THIS MAKES THE POPULATION TEMPORALILY WEAK…
CONFUSED…
AND LOOKING FOR REPLACEMENT
-> WHICH WILL BE OFFERED.
THE WINDOW IS SMALL
TIMING IS VERY IMPORTANT.
David wrote: “We now know that the design flaws of the Maastricht Treaty that created the rationale for European monetary union in 1992 have been exposed by the current sovereign crisis. Convergence, the mantra of EU central bankers, politicians and bond dealers in the 1990s, has proved a cruel mirage.” But the crisis is not a sovereign crisis…it is a financial crisis; a crisis of private banking; the costs of which have been imposed upon the public. The crisis does not arise from sovereign bugetary deficits; but from sovereign regulatory deficit. Our governments allowed the financial and banking sector to… Read more »
@ bonbon There is a de-industrialization program being implemented – I agree with you on that; but the mechanism of meltdown has nothing directly to do with the Euro or Germany. The global meltdown is being engineered and managed through central banks, the financial markets and hedge funds – mainly using derivatives. The only way to make sense of what is unfolding is to see it from a global perspective. The oligarchs are implementing a new world order; and as Kissinger has said, the process and the outcomes will have different characteristics in different parts of the world. We could… Read more »
It is time for Glass-Steagall in Britain! Mervyn King, Quoting FDR, Calls for Bank Separation May 3, 2012 (EIR) — Bank of England Governor Mervyn King has called for bank separation in a lecture sponsored by the BBC. While the media plays the speech as an apology for not doing more to prevent the crisis, in the lecture itself (an audio of which is available on the website of the {Guardian} daily), King attacked the banks and the total failure of former Chancellor of the Exchequer Gordon Brown’s “light touch” banking regulation. While the lecture was punctuated with excerpts from… Read more »
Germany and what if ? : here is a bombshell :
Handelsblatt Sat 050512: Der Euro war und ist eine Schnapsidee.
from Prof. Arnulf Baring. “The Euro is a daft idea”.
I’ll get a good English version. This is the core establishment business press!
As Kohl had no “Plan B” in 1989 whn the Wall fell (even when the warning was long before), has FG/LP the same blindspot?
Obama took over from Bush, and found a mess left behind, and it was a shock. When the Con-Lib government took over, they were shocked by the state of Britain’s finances, when they got inside and seen what was happening. When the Spanish PP took over from Mr. Bean, they were shocked by what they seen, and by what they uncover everyday. We had a similar situation when FG/LP took over from FF/GP. Chances are, that when Hollande and the Socialists take over from Sarkozy, they will be shocked when they see what us really going on, and the real… Read more »
I think that you are totally wrong in that your target is continually wrong. The matter is certainly not any more (if it ever was) a political one, and all the pointers I’ve seen go not to a political problem and a political solution. The fact of the matter is, that Europe is a Civil Servant invention and it was always so, right from the beginning. A group of highly influential Civil Servants promulgated the ideas, then convinced politicians that this was ‘A Good Thing’ and, being the sort of minds they were not only convinced them but started a… Read more »
Hi All, I think we have to be careful in blaming the Euro as the source of the debt crisis problem. I also think that while balanced budgets sound like a sensible thing, we shouldn’t blame runaway national debts for the crisis either. Indeed runaway national debts have been necessary to keeping this system going. The root of the debt crisis is as follows; While Central Banks create cash for their Treasuries, it is the Commercial banks which create all our digital money, or 97% of the money supply. Banks can only create this new money through the loan process… Read more »