Germany may be the country that brings the euro crashing down

[-:Undertaker:-]

http://www.telegraph.co.uk/comment/9...hing-down.html

Germany may be the country that brings the euro crashing down

Though largely unnoticed in Britain, a political storm is brewing in Germany

Francois Hollande and Angela Merkel have divergent views on the eurozone's future

While attention in this country was focused on the delights of the Olympics, almost wholly unnoticed here has been the extraordinary drama unfolding in Germany – portending a truly seismic shift in the history of the European Union. The Germans have at last peered into the abyss that opens in front of them as a result of pouring all that money into the debts of their eurozone partners. To say that they don’t like what they see is a wild understatement.

Reported daily in such papers as Die Welt, Handelsblatt and Der Spiegel, a succession of politicians, financiers and commentators have concluded that, with Greece about to go bankrupt and Spain and Italy to follow, enough is enough. Certainly, they argue, Greece must be allowed to leave the euro. But so, many add, must Spain, Italy and others. Indeed, so dire has this crisis become – with one senior politician estimating Germany’s potential liability at more than $1 trillion – that voices are now being raised to say that the only practical solution to this mess would be for Germany itself to abandon the euro. The rest of the eurozone could thus be left to sink or swim with a currency which, without Germany’s backing, would face a massive devaluation.

Anyone wanting to see the kind of headlines which have been reflecting this drama – “Greece must go bankrupt”, “Multiple countries must leave the euro”, “Germany’s trillion-dollar liability”, “The current imbalances will blow Europe apart”, “Germany must withdraw from the euro” – can find them on my colleague Richard North’s blog,

www.eureferendum.com, where he has been reporting on it daily.

According to North (formerly a research director in the European Parliament), one of the oddest features of this crisis is how little it has been reported outside Germany. Britain is far from alone in being oblivious to the huge significance of what is happening. This is partly because so much is fogged by the public show put on by other European players, notably the Commission and the head of the European Central Bank, to promote the idea that “the euro cannot be allowed to fail”. It was always intended to be the supreme symbol of the European project’s overriding aim, to weld the countries of Europe together in full fiscal and political union. But this would now require a major new treaty, with a further massive surrender of national sovereignty.

The likelihood of such a treaty being ratified – since it would require a slew of referendums, several of which would probably be lost – is remote. Above all, such a treaty would have to be ratified by Germany itself, and next month her constitutional court will rule on whether, a step towards this would be a breach of her Basic Law, which forbids any surrender of sovereignty to an outside power. Angela Merkel, facing an election next year, cannot afford to ignore the evidence of the polls – that a vast majority of her people say they have had enough of being expected to bail out their failing neighbours indefinitely.

Without question, this is by far the gravest crisis the “project” has ever faced, but one which it has hubristically brought on itself, with all the inevitability of a Greek tragedy, by that gamble it took in the 1990s, to impose a common currency without first creating the political union without which (as was observed at the time) it could not work. As telling as anything in this drama has been the silence of France, under its new president, François Hollande, who, if anything, sides with those who look to Germany to bail them out. The old “Franco-German motor” is dying – and with it the entire project it drove forward for 50 years.

As for us British, sitting impotently on the sidelines, we are irrelevant. But the crash, when it comes, will of course draw us down with it, as in the coming months it makes front-page news across the world.

An interesting insight there to attitudes across the channel in Germany with the newspaper headlines being analysed. As with the other thread concerning Finland, you can see the disintegration is taking place now at the core. In recent months it died down a bit (markets and politics are usually quiet in summer), but autumn will clear the fog.

Thoughts?

[David]

didnt read it
world war 3?

[Inseriousity.]

Yes but our headlines/public opinion are also anti-EU but our politicians are still weaseling out of an in-out referendum. This article doesn't really explain much if Germany's politicians are the same (I know the article says that senior politicians are saying x, y and z but politicians say a lot of things, doesn't mean they actually do them is the point I'm trying to get across here ).

[-:Undertaker:-]

Yes but our headlines/public opinion are also anti-EU but our politicians are still weaseling out of an in-out referendum. This article doesn't really explain much if Germany's politicians are the same (I know the article says that senior politicians are saying x, y and z but politicians say a lot of things, doesn't mean they actually do them is the point I'm trying to get across here ).

Ah yes good point, but historically Germany hasn't been like us - we (the public and thus the majority of our newspapers) have always been sceptical of this entire project if not rejecting it outright. The German media on the other hand (and a majority of the people) have always been supportive of the EU because they've always been made to feel guilty about the past, mainly by the French. The shift of attitudes as seen in the headlines of the German media are astounding, even i'm surprised in the direction this is going in Germany.

Often people make the mistake of thinking it is Germany who drives the 'project' - it's not, its the French and the EU Commission (which has always been stuffed full of French officals).