Friday, November 18, 2011

Auf Wiedersehen? Not yet

As Germany flexes its muscles and as the whole of Europe hangs on its every word, it’s worth wondering if Mrs Thatcher wasn’t, as usual, right to be worried about the resurgence of the country.

Amid all the euphoria at the time of German unification, she was nervous.

Lord Waldegrave, who was Europe Minister in 1989, says Mrs Thatcher was alarmed Germany would be an "unstoppable force" in an unbalanced Europe.

She told Russia’s President Gorbachev: "Although Nato had traditionally made statements supporting Germany's aspiration to be reunited, in practice we were rather apprehensive.

"All Europe is watching this, not without a degree of fear, remembering very well who started the two world wars."

Of course, she failed to slow the unification of Germany, admitting: "If there is one instance in which a foreign policy I pursued met with unambiguous failure, it was my policy on German reunification.”

In order the better to try to understand the Germans, she invited several historians of Germany to a meeting at Chequers on Sunday March 24, 1990.

According to the memorandum of the meeting drawn up by her foreign policy advisor, Sir Charles Powell, this included "angst, aggressiveness, assertiveness, bullying, egotism, inferiority complexes and sentimentality".

As David Cameron meets Chancellor Angela Merkel and German MPs start attacking Britain’s approach to the EU, it’s clear the real power in Europe rests in the Bundestag and the Bundesbank.

You could reasonably argue that we are, at the moment, witnessing examples of this “aggressiveness, assertiveness, bullying”.

The German Government and its bankers are calling the shots. They have deposed the elected leaders of Italy and Greece and replaced them with hand-picked, unelected placemen.

Now they are drawing up plans to take over failing economies via a European Monetary Fund.

It will only work – everyone acknowledges this – if there is genuine political union within the Eurozone, a Superstate with a centralised economic policy.

No nation state will wear this but that won’t stop the plan. It seems it even involves circumventing Cameron’s legislative pledge to hold a referendum on any change in EU treaties.

Chancellor Merkel says: "The task of our generation is to complete economic and monetary union, and build political union in Europe, step by step. That does not mean less Europe, it means more Europe."

Germany seems to think it can hide its own ambitions behind the façade of the EU. The truth is that Germany runs the EU and proposes to mould the EU in its own image.

You could argue that this is a positive development. The southern basket-case economies would be forced to submit to Teutonic discipline.

On the other hand, you could argue that Germany has exploited the Euro to make its products cheaper and more competitive.

It has, in effect, been pouring money to Spain, Italy, Greece and elsewhere so that these countries can afford to carry on buying Germany’s manufactured goods.

Who is to blame when the borrower over-borrows and can’t repay his debts – the borrower or the lender?

Obviously the borrower in the first instance but, if we castigate the banks for pouring away billions of pounds in unaffordable loans, why not also blame a wealthy country like Germany for encouraging its poorer neighbours to carry on borrowing to finance a lifestyle they couldn’t afford?

Germany is guilty of lining its own pocket at the expense of other Eurozone countries and therefore has an obligation to bail them out.

Indeed, the real solution to the crisis would be for Germany to withdraw from the Euro altogether and bring back the Deutschmark.

That’s not an attractive idea in Berlin and Frankfurt because, suddenly, German products would become unaffordable and German manufacturing would take a hit while all its rivals within the EU would receive a hefty boost.

That is a reasonable long-term alternative to a European Superstate.

And there is one snag with all these proposals for “more Europe” – nobody has actually asked the peoples of the EU if it’s something they want.

They don’t ask the question for a very good reason. They know the answer would be no.

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