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Posted by
Olog-hai
on Sun Nov 13 11:35:16 2011, in response to Re: EUEUEUEUEU Germany must decide whether eurozone lives or dies, posted by Olog-hai on Sun Nov 13 11:22:47 2011.
edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d The Sunday Express is far more blunt than the other so-called "Tory" papers.
GERMANS PUSH EU TO THE BRINKSunday November 13,2011
By Neil HamiltonThe catastrophic EU plan for monetary union could almost be a case of déjà-vu.
For we have been here before. In 1941 to be exact.
Dr. Walther Funk, the Third Reich economics minister, started laying down plans for a postwar Europäische Wirtschafts Gemeinschaft, a European Economic Community, as most of Europe lay at Hitler’s feet.
This involved a common European currency, Harmonization of European Rates of Exchange, a European Agricultural Economic Order, a Common Labor Policy and The European Regional Principle.
Sound familiar?
The EU was created ostensibly as a means of stopping Germany dominating its neighbors—yet the EU has implemented large parts of the Funk Plan, even adopting the names of its institutions.
Weak European leaders are now routinely summoned to German Chancellor Angela Merkel’s presence to receive their orders on how to run their economies. Teams of EU officials are then dispatched to ensure compliance.
Sometimes, events are even more dramatic. Last week, the Greek and Italian PMs, Papandreou and Berlusconi, were forced to walk the plank, largely as a result of EU pressure from Germany. It’s easy to see who rules the roost.
In 1990, Mrs. Thatcher’s Trade & Industry Secretary, Nicholas Ridley, was sacked for describing the EU’s plans for monetary union as “a German racket to take over the whole of Europe”. It may not have been obvious to most at that time, but Ridley knew enough history and economics to foresee what was coming. Telling an inconvenient truth has ended many political careers and Tory Europhiles ended his. Just as, soon after, they ousted Mrs. Thatcher for standing up to Europe.
Germany has emerged as the industrial engine room of Europe and there are a number of reasons for that. First, following reunification in 1989 there has been massive internal investment in infrastructure and manufacturing works. This technology, in the hands of the hard-working, highly motivated German workforce, means exports are booming and their productivity has raced ahead of Mediterranean partners.
Germany has for many years cherished a long-held belief that it is destined to lead a United States of Europe. As ex-Chancellor Helmut Kohl once put it, unaware that reporters were in earshot: “The future will belong to the Germans… when we build the house of Europe.”
Former Finance Minister Theo Waigel less diplomatically said in 1997: “Germany, as the biggest and most powerful economic member state will be the leader [of Europe], whether you like it or not.”
Its current economic and trade dominance means that the euro is effectively undervalued for Germany and overvalued for Greece, Portugal, Italy and Spain—creating a permanent imbalance in commerce.
Similarly, in the eurozone, interest rates have to be the same regardless of variations in countries’ economic health.
The European Central Bank sets interest rates to avoid inflation in Germany. This is a policy with its heart in German history. In the Thirties, the Weimar Republic printed money to keep the economy afloat and stoked catastrophic inflation. However, the problem throughout southern Europe is the direct opposite and requires lower interest rates to get economies moving.
The euro has locked weak countries into high exchange and interest rates leading to endemic recession, unemployment and debt. By contrast, strong countries such as Germany enjoy massive trade surpluses and a buoyant economy with inflation kept in check.
Nations with a single currency have similar problems. Traditionally, the south of England has been prosperous while the north and Celtic fringe have struggled. In a nation-state such as the UK, this is partly ironed out by redistributing taxpayers’ money from richer to poorer areas.
This has also happened in Germany since reunification. In the past 20 years, its government has poured more than £1 trillion into the East. Their taxpayers grumble, but have put up with this colossal drain because the recipients are Germans engaged in rebuilding their nation.
They feel no such affinity with the Greeks and Italians. Hence, German public opinion has resolutely refused to countenance the scale of the bailout required to pay for a decade of Mediterranean profligacy.
Germany has taken the weak countries’ penny in the form of huge export surpluses, but its taxpayers refuse to hand over the compensating biscuit of tax transfers to alleviate the higher unemployment and economic decline caused by a German-run eurozone monetary policy. All this means the eurozone acts as a giant stirrup-pump, perversely siphoning wealth from the poor to the rich.
It seems things have turned out just as economist Dr. Funk intended. Europe is being run for Germany’s advantage. Compliance is ensured by the bureaucrats of Brussels, Frankfurt and the IMF, not forgetting Angela Merkel’s little helper Nicolas Sarkozy.
However, as the Germans refuse to bow to reality, it becomes increasingly obvious that this unbalanced system is teetering on the point of collapse. The danger now is that Europe’s peoples are rising against the political elite who have imprisoned them in an economic madhouse.
The austere measures that the newly bankrupted countries will have to impose will seem intolerable.
While some states, led by Germany, will continue to live high on the hog at the expense of poorer countries, many will feel fury and will take to the streets.
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