Europe unites against Germany

After the onset of the economic crisis and the events in Greece, it became clear who really dominates in the EU. Germany has become the undisputed leader of all decision-making processes within the EU. It dictates its conditions and makes demands. Obviously, not everyone is pleased with this state of affairs, and some EU members are dissatisfied.

In southern European countries affected by the crisis the number of those disgruntled by German dominance in the EU is growing. The Financial Times conducted a study that found that 82 percent of Italians and 88 percent of Spanish considered the level of influence of Germany in the European Union excessive. In 2011, these numbers were 53 percent and 67 percent, respectively. Everyone understands that the dominance of Germany in the European Union is growing, provoking a backlash in the countries of southern Europe experiencing a profound crisis. The survey results clearly demonstrate strong objections of Italy and Spain against the austerity measures pursued by Germany. The residents of the UK and France share their sentiment and believe that the EU headed by Germany will cause them great damage. They believe that Germany had no right to impose on them stringent requirements during the economic downturn.

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Even tiny Luxembourg expressed its dissatisfaction with the dominance of Germany in the European Union. Jean Asselborn, Luxembourg Foreign Minister, criticized the policies of Angela Merkel, and accused the German authorities of a "quest for hegemony" in the EU and attempts to impose on Cyprus their model of overcoming the crisis. The Minister said that Germany could not be deciding what economic model other countries in the EU should be choosing. However, residents of Germany support the policies of Angela Merkel in combatting the crisis. In Germany only 13 percent of citizens believe that the work of Francois Hollande (President of France) and David Cameron (British Prime Minister) is satisfactory.

Nearly 80 percent of Spanish citizens believe that Mariano Rajoy (Spanish Prime Minister) is doing a poor job. There is an interesting pattern in these countries - people want to give the reins of power to Brussels that would be able to control national budgets. However, 69 percent of Germans and two thirds of Britons disagree. They believe that the EU should not interfere in their budgets. Generally, the EU is moving in two directions - growing importance of Germany as the dominant member of the EU and the widening gap between the richer northern countries and southern EU countries experiencing a deep recession.

Like it or not, Germany is by far the only leader in the European Union. The previous union of Germany and France has fallen apart. France is going through tough times, while German economy is on the rise. Germany assumed the role of the leader of the EU and has to pull the economy of Greece, Spain and Italy, solving the existing problems in these countries. Perhaps these solutions look excessively tough, but against the background of the crisis they are highly effective. Southern Europe has painted itself into a corner, constantly growing its debt. Living in debt cannot continue forever. Now, without the aid of Germany Greeks, Spaniards and Italians simply cannot survive.

Any creditor imposes their own terms, and they can be pretty tough. But without funding from outside it would have been even worse. Therefore, the Southern countries have no one to blame other than themselves. Germany seeks to impose fairly strict financial limitations on the Eurozone countries and proposes the introduction of a three percent budget deficit rule. Sanctions will be automatically applied to all violators. The Court will observe whether each individual country follows the three percent rule. Germany says that if 27 European Union countries are not ready to accept the terms of this agreement, then this version of the agreement will operate between the 17 members of the Eurozone.

However, not everyone is in support of Germany's plans. Many experts believe that Germany's proposal implies a significant loss of sovereignty for a number of countries forming the Eurozone. It is noteworthy that the German proposal to "repair" Europe does not require much sacrifice from Germany. The Government does not want to pay for the salvation of other European countries, and is adamantly against the creation of "Eurobonds" that would help spreading the risk of a default among all countries of the Eurozone. Europe is losing its democratic face, while Germany is increasingly expanding its leadership. Some even believe that Germany purposefully uses the financial crisis to conquer Europe, as it once was done by Hitler.

These are predictions of London Financial Times. The paper stated that the process of the EU enlargement took place randomly and without a clear concept of the European Union, which resulted in a crisis. The Greek crisis has clearly demonstrated that the EU has two tiers: the core that consists of the countries of the Eurozone where everything is dictated by Germany, and the rest of the EU. The enlarged EU is now a completely different league than it had previously been. The Franco-German engine is no longer a two-stroke one, it is dominated by only Germany led by Angela Merkel. She is obeyed and considered.

The recent European Union summits are a clear indication. Germany offers certain programs, and all other countries adopt them without amendments. The current economic situation in Germany is the result of ten years of hard work of a number of governments of the country in order to increase the efficiency of the German economy. In the beginning of the current globalization, Germany was able to reach a strategic compromise within the country, which in many ways explains today's special position of the country in the Eurozone. The workers agreed to a freeze and reduction of income, and businessmen pledged not to take their production abroad.

Since 1995, business and government have been adhering to specific policies aimed at improving the competitiveness of the national economy. This led to the fact that over the last ten years the competitiveness of German goods has increased by 25 percent compared to other countries in the Eurozone. From 1996 to 2008, the volume of German exports increased two-fold. The increase in the efficiency of the German economy led to a rise in the cost of production in other countries of the Eurozone. As a result, other members of the Eurozone, especially Italy and France, found themselves in a situation where they cannot establish foreign trade balance.

Simply put, the highly competitive German goods displace national products in other countries of the Eurozone. At the same time, the Eurozone countries are unable to devaluate their national currency - the most effective way to improve the competitiveness of their goods. After the introduction of the euro they do not have such authority.

The modern Germany is not only the EU's largest economy, but also a country that sets the rules for the domestic macroeconomic of the Eurozone. The most likely scenario for the further development of the Eurozone might be the following: the countries unable to get out of the budget crisis will have to transfer some of their sovereign powers to Germany, or they will have to leave the Eurozone. The Eurozone will either be transformed into a "Greater Germany" or fall apart.  

Sergei Vasilenkov

Pravda.Ru 

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