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Is Germany at last turning against the EUro?

It would (will?) be interesting to hear what our own Paul Marks has to say to in answer to this, from Ambrose Evans-Pritchard:

Judging by the commentary, there has been a colossal misunderstanding around the world of what has just has happened in Germany. The significance of yesterday’s vote by the Bundestag to make the EU’s €440bn rescue fund (EFSF) more flexible is not that the outcome was a “Yes”.

This assent was a foregone conclusion, given the backing of the opposition Social Democrats and Greens. In any case, the vote merely ratifies the EU deal reached more than two months ago – itself too little, too late, rendered largely worthless by very fast-moving events.

The significance is entirely the opposite. The furious debate over the erosion of German fiscal sovereignty and democracy – as well as the escalating costs of the EU rescue machinery – has made it absolutely clear that the Bundestag will not prop up the ruins of monetary union for much longer.

Clearly, Evans-Pritchard had in mind commentary like this (Paul Marks yesterday):

It is the end – not just the end of any prospect that people will really face up to their problems (rather than scream for endless bailouts), but also the end for any pretence that modern government is in any real sense “democratic”. It is not a sudden emotional whim of the people that has been ignored – it is the settled opinion (conviction) of the people, which has been held (in spite of intense propaganda against it) for a long period of time, that has been spat upon.

Evans-Pritchard, however, says this:

Something profound has changed. Germans have begun to sense that the preservation of their own democracy and rule of law is in conflict with demands from Europe. They must choose one or the other.

Yet Europe and the world are so used to German self-abnegation for the EU Project – so used to the teleological destiny of ever-closer Union – that they cannot seem to grasp the fact. It reminds me of 1989 and the establishment failure to understand the Soviet game was up.

So, have things changed, or have they not?

I agree about the USSR parallels in all this. But Evans-Pritchard’s reportage also reminds me rather of that vote of confidence that they had in the House of Commons, which Neville Chamberlain “won” in 1940, but actually lost.

I remember once speculating, here, there or somewhere, that one of the many things that could reasonably be said to have caused Word War 2 was the failure of any sort of German Parliament to meet – circa 1939, and say, in the manner of a British Parliament: No! No more of this! That time, the idea was for Germany to conquer Europe (and much else besides) with armies. Now the plan is and has long been for Germany to buy Europe, and give it to … EUrope. But the price is again proving ruinous and the object being purchased is a crock.

This time, the means are surely still in place, as they were not in 1939, for Germany to say: No! But, did they? And if not, will they? Over to you, Paul Marks.

LATER: Detlev Schlichter agrees with Paul, using the word Götterdämmerung. Germany, he says, is finished.

He also says this:

And one final word to my English friends. No gloating please about the clever decision to stay out of the euro-mess. You have the same thing coming your way without the euro. The coalition’s consolidation course is apparently so ruthless that every month the state has to borrow MORE, not less. Even official inflation is already 5% but pressure is growing on the Bank of England to print more money. See the comical Vince Cable yesterday, or Martin Wolf, the man with the bazooka, in the FT today. Since 1971 the paper money system has been global. Its endgame will be global, too.

Indeed.

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10 comments to Is Germany at last turning against the EUro?

  • Sam Duncan

    I feel like I shouldn’t be commenting before Paul has his say, but you’re absolutely right about the parallels with 1989. It’s easy to forget, and people who weren’t around at the time probably don’t realise, that it didn’t feel inevitable. It was obvious that the Soviet system had failed, and that it should collapse, but the impression at the time seemed to be that the political interests were so powerful and so entrenched that they’d somehow weather it out and plough on regardless, cracking down on dissent, becoming even more repressive. Even as we saw the dominoes of eastern Europe fall, each one seemed to come as a surprise. And after they’d all gone, it was still somewhat surreal to see the Russian tricolour fly over Moscow three years later.

    I get exactly the same feeling with the EU. My head says it’s over, we’re in the endgame, but there’s a nagging voice telling me they’ll use it as an excuse for Even More Europe.

    Schlichter is, as usual, spot-on. I wish he wasn’t.

  • I’m not sure exactly what this meme is with the Germans finally turning against the Euro.

    The German people as a whole never wanted to give up the Deutsche Mark, but the German political elite wanted reunification very badly and the French new this and exploited it.

    The French new full well that the only way to pay for the ever rising costs of the French social and political system was a financial union with Germany. Therefore they exploited the German need for reunification and demanded they give up the Deutsche Mark for the purely conceptual (and political) Euro.

    However, they are now approaching a choice that even they will not make. If it comes to a choice between letting the Euro fail and bankrupting Germany, then they will at the uttermost end choose self-preservation and the castigation of the French.

    Better to do that than the eternal slavery of the German people to the Latin South. That would simply make the rise of nationalist elements within Germany more likely.

    Everyone knows where the French road goes and at the last the Germans will balk and remember that their duty is first and foremost to the people of Germany.

  • Dale Amon

    Some of us *did* think it was inevitable. My surprise back then was not that it happened, but that it happened a decade or so sooner than I expected.

  • Sam Duncan

    Well, yes, Dale, I suppose that’s really what I meant: failure at that particular point in time didn’t seem as certain as it is in hindsight. Previous experience suggested that they’d roll out the tanks, round up dissenters, and hang on for another 10-15 years. That they didn’t came as a pleasant surprise.

    But obviously, the fact that the whole communist experiment was doomed by its very nature from the start goes without saying.

  • It’s probably a good job that the EU doesn’t have any tanks then…

    For the time being….

  • Paul Marks

    Politics (UNLIKE economics) is an empirical subject.

    Perhaps Evans-Pritchard is correct and this is the last bailout that will be accepted by the German Parliament.

    It is just that I have heard this so often before. In the contexts of bailouts and Germany – with the courts or pariament going to stop……. and then not doing so. And in the context of the European Union generally. With such and such a thing being “so insane” that it can not happen – and then it does.

    Will the polticial, media, academic, (etc) elite change?

    Perhaps they will. The “bottom line” is that I do not really like them (to put it mildy) so I tend to believe that when faced with a choice between good or evil I tend to believe they will pick evil.

    Listening to German politicians and academics talking about “Europe” as if it was the object of worshop of a religious cult (they talk like quiet fanatics – post Christians looking for something to worship after centuries of theologians and philosophers have destroyed the old beliefs, first the Germans turned to “blood” now to “Europe”) does not stimulate hope in me.

    However, I repeat, politics is empirical – so Evans-Pritchard may be correct.

    As for Eurononsense (and general “intellectual” ignorance and stupidy) it can be seen just as much with the smug nonentiies invited on to English language French news – as it can among the German elite.

    Mr Cameron (and friends) also says much the same sort of thing. The Euro must be preseved, politicians must “do something” to “save” X, Y, Z, (the vile “Economist” magazine is at least a faithful reflection of the establisment elite when it demands even more interventionism).

    There is, however, a bottom line.

    Like Marxism in the Soviet context, the mixture of interventionism and Keynesianism that is the European Union (and Britain and the United States) CAN NOT work.

    Here we are away from the whims of academics, politicians and media creatures.

    We are in the realm of fact.

    And the fact is that this mess can not work – and will not last.

    Perhaps (as Evans-Pritchard suggests) nations like Germany will turn away from it.

    But if they do not – it will end anyway.

    It will crashing down on their (and our) heads.

  • Laird

    When Paul Marks and Detlev Schlichter are in agreement, I listen.

    To me, Evans-Pritchard seems entirely too credulous. And in my opinion his quoting of Myron Scholes and Joseph Stiglitz doesn’t bolster his argument any; quite the opposite, in fact. But, time will tell.

  • Will it be a case of Germany, in an attempt to bypass a Sarajevo, the shooting of the Euro, going straight to Versailles?

  • Paul Marks

    Mr Ambrose Evans-Pritchard is (alas) a supporter of “monetary stimulus” himself.

    Germany may yet break with the madness (that is a matter of politics – and I know little of politics).

    But not by following the economic advise of A.E.P. – or of Stiglitz, Krugman, Tobin and the other “Nobel Prize” winning morons.

  • Paul Marks

    Yet another delay to the next Greek bailout called.

    “They are turning to the free market Paul”.

    I doubt it.

    The French and German governments will just “recapitalize” (i.e. BAILOUT) the banks directly – rather than do it indirectly by bailing out Greece.

    No real change.

    The same vileness – by another method.