Berlin favours economic and social disintegration in certain Eurozone countries

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In the fourth year of the ongoing financial and real economy crisis in Europe, the deterioration of the employment and social situation was an easily predictable prospect. However the increasing pace of this worsening and the widening divergence between member states, as monitored by the EU Employment and Social Situation Quarterly Review for March 2013, poses now in the most urgent manner an overall reassessment of the policy tools and the economic targets set by the European Union’s governing elite in Brussels, Berlin and Paris.

For one thing all EU citizens, in the crisis stricken South and the still affluent North, for different reasons become everyday more disillusioned with the European project. The Southerners are angry for obvious reasons and the Northerners because they are told that they are working harder to support the lazy ones.  The antithesis between the Europe’s South and North if left to take its toll, it will undermine the ability of the Union to overcome the next economic crisis, which is surely approaching. The draconian measures though, imposed on Cyprus, Greece, Portugal, Ireland, Spain and Italy could have been tolerated by those populations, if there were some tangible prospects for betterment in the foreseeable future.

It’s not only that there is no light at the end of the tunnel for those populations, but on top of that the German political elite, spearheaded by the Federal Minister of Finance, Wolfgang Schauble, now telling everybody that Berlin can set the rules for the economies of Eurozone countries, and consequently redefine their social structures. In this dangerous game Germany targets more countries and not only the PIGs. For example the affluent Luxembourg is now under pressure by Germany, for the same reasons like Cyprus. Both those two small countries have developed strong financial sectors, independent from Frankfort and the Deutsche Bank.

Luxembourg vs Germany

Jean Asselborn, the Foreign Minister of Luxembourg speaking to Reuters yesterday was furious with Germany, because as he put it, this country wants again to impose its hegemony in Europe. Asselborn implied that the Germans want to destroy Luxembourg’s thriving financial sector, as they did with Cyprus because it is ‘overgrown’. In reality Germany wants to relocate Luxembourg’s business and profits to Frankfurt.

Of course Berlin doesn’t want to see most of Eurozone impoverished as a policy target ‘per se’. By applying the Teutonic principle however that Germany must profit from everything, the target remains this. In this logic Italy for example should stop producing what Germany produces, because the Italian cars and the Italian machines are not as good as the German products.

Targeting social deterioration

The fast deteriorating social and labour situation over at least half of Eurozone countries seems then to be a policy target for Berlin. Germany also seems to set the ‘right’ structure for all Eurozone economies (to resemble its own?). An overgrown financial sector is ‘bad’ and has to go. It was exactly this, what has happened in Cyprus, and Luxembourg is now afraid it may be next. After some months Berlin might target the Italian small and medium industrial firms, which are competing successfully with the German producers. The pretext may be that the Italians are not paying their taxes in full while the Germans do, or something like that.

The final result will be a fractured European Union and an endemic impoverishment of many countries. According to the findings of the European Commission’s Quarterly Review on EU Employment and Social Situation (March 2013):” Divergence continues to increase across Member States, translating into persistently growing labour market and social challenges, marked by ever higher unemployment at EU level”.

According to the same source the employment and social situation in the EU remained critical in the fourth quarter of 2012 with employment receding overall and unemployment rising further and households’ financial situation remained serious. The adverse effects of public budget cuts and tax increases on employment and living standards are increasingly apparent in certain Member States.

If the social and economic developments in the European Union continue to be powered by the same Teutonic policies the explosion seems to be inevitable in many countries. However the national political and economic elites in the worst hit EU member states, in order to avoid disintegration will reject the Germanisation of Europe, and resort to their own tools. Italy is most prone to take this direction, with a return to its old currency, the lira. In this case though the problem is how dear will be the price in terms of employment and social deterioration, if a country leaves the EU.

In any case Berlin seems determined to continue in its current policy lines, no matter how severe the effects will be on the employment and social situation in the EU. In reality either way, within or without the Eurozone many countries will continue to suffer.