After the Italian ‘no’ and the Brexit, Germans must decide which Europe they want

Questions and answers during the national briefing by Wolfgang Schauble, Federal Minister for Finance of Germany, following the ECOFIN Council on 6 December 2016, in Brussels. Snapshot from a video. (European Council - Council of the European Union, Audiovisual Services).

Questions and answers during the national briefing by Wolfgang Schauble, Federal Minister for Finance of Germany, following the ECOFIN Council on 6 December 2016, in Brussels. Snapshot from a video. (European Council – Council of the European Union, Audiovisual Services).

There is no doubt that Europe is in disarray. The long standing malaise of high unemployment and economic stagnation has already mutated into critical political problems. The mutations of the European political ecosystem take various, unseen before forms. In the northern EU countries they invariably appear as extreme right or even semi-fascist political parties, inflated by anti-immigration, xenophobic and chauvinistic rhetoric, also directed against the ‘lazy’ and over indebted southerners in Greece, Italy, Spain and Portugal. In the south, the political mutations take other forms including left wing extremism in Greece and Portugal or assume a clown outfit as in Beppe Grillo’s Italy.

However, there is a common denominator in all those cases. This is a populist narrative containing mainly crude Eurosceptisism and irrelevant or even crooked anti- systemic cries. As if destructing the European Union and throwing the immigrants in the Mediterranean would automatically create good jobs and cure the everyday frustrations for a large part of the population. There is an audience, though, for all that. According to the EU statistical service, the Eurostat: “more than 1 in 10 people in the EU cannot afford to get together with friends or family for a drink and 1 in 6 is not able to participate in a leisure activity”. Add to that the part of the population which is traditionally captive to chauvinistic cries and the sum becomes uncontrollable. The rest has to be charged to inept, self centered politicians, who have distanced themselves from the agonizing parts of society.

A critical mass of people

This dreadful reality was manifested in last Sunday’s Italian referendum. Most voters didn’t care to answer the question asked, namely, should the constitution be changed in order for the institutional decision making system in the Parliament to be more effective. Nearly 60% voted ‘no’. They rebuffed the ‘system’, the EU, the elites, the globalization, the immigrants, the Germanic Europe and whatever the populist politicians had for sale. So, Matteo Renzi received a double blow. For one thing, the Italians denied him the chance of becoming the dominant political figure. At the same time though, many earnest Italians showed their complete disappointment with the way the EU functions, which is to penalize almost everybody who cannot comply with the Germanic way in which the economy functions. The 18 to 34 years of age group voted by 81% ‘no’ for a good reason. Youth unemployment is around 40% nationwide and more than 50% in Rome and southwards.

This is the outcome of six years of economic misery in the south of the EU, caused by brutal austerity, over indebtedness and Teutonic economic policies. It was not like that before. In Italy and Greece unemployment rates were for decades down to single digits. The Greeks still pay the price for rescuing the Germans and in many ways the western banking system, back in the 2009-2010 financial meltdown. The country was forced to pay its oversized debts in nominal values, which would have been drastically cut down had Greece chosen to go insolvent, and asked its creditors to sit down and negotiate the servicing of a workable debt. The three rescue programs of German inspiration and profit imposed on Greece have increased the country’s public debt from 120% in 2009 to 180% today.

It’s the turn of Italy

Now, it’s the turn of Italy to go through the same appalling process. Some weeks before the referendum, Renzi asked Germany to agree to a European solution for the recapitalization of the ailing Italian banks, with first in the list the Monte dei Paschi bank, the oldest lender of Europe. Berlin denied to even discuss the prospect of activating the European Banking Union tools, insisting that Italy is alone in this and the EU cannot offer any help.

The Germans forget that back in the banking crisis era of 2009-2010 they violated all and every EU law when rescuing their own failing banks. They also forget that their exponential economic development of the 1950s and the 1960s was built upon the full write-off of their debts which the rest of world had the generosity to offer them.

Germany v ECB

On top of that, Germany is systematically attacking and undermining the efforts of the European Central Bank under Mario Draghi to alleviate financial pressures burdening heavily indebted Eurozone members. Today, Thursday 8 December in Frankfurt, the Governing Council of ECB, on the insistence of Germany, is reportedly expected to discuss the reduction or even the gradual withdrawal of the unconventional monetary measures used by the central bank to support the weaker member states.

Draghi himself indirectly blames the political stubbornness of Germany for the deadlocks that Eurozone may face in the future. In an interview with the prestigious Spanish newspaper ‘El País’ when asked if there is a risk of “going back to the 1930s with protectionism and authoritarianism” he answered “All in all, the banking sector and perhaps more generally the financial sector, is stronger than it used to be before the crisis. But in the medium term it is not yet clear what the consequences of past, current and future political uncertainty will be. There will be consequences, that much is certain”. Given that, so far the political choices in Eurozone’s economic affairs are almost exclusively dictated by Germany, the ominous reference is clear.

In short, after the realities of the Brexit and the Italian ‘no’ towards a Germanic EU, things have to change. If not, the Italexit is not very far away. The currently followed economic policies, inspired mainly by Berlin, invariably lead to a Germanic Europe that everybody else rejects. Of course, the question is if Italy, Greece, Spain and Portugal will be willing or able to continue participating in it.

Soon, the Germans will be obliged to choose – it is impossible for them to have it all. Germany cannot , at the same time, gain from British and Greek customers for its expensive cars but ignore their hardships, because, in the long term, it is a lose-lose situation.

 

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Banks get trillions and the unemployed ECB’s love…

Can Greece’s democratic institutions keep it in Eurozone?

Another doomed EU attempt to interfere in Libya?

ECOFIN: Protecting bankers and tax-evaders

China’s New Normal and Its Relevance to the EU

Deutsche Bank again in the middle of the US-EU economic skirmishes

“C’est la vie”? French recession and unemployment to linger in Eurozone

The true EU unemployment rate may have soared to 21.9%

The European Internet is not neutral and neither is the Commissioner

EU to lead one more fight against climate change at G7 summit

Social Committee teaches Van Rompuy a lesson

Is Europe ready to cooperate with the rest of the world? Can Germany change its selfish policies?

ECB money bonanza not enough to revive euro area, Germany longs to rule with stagnation

A male gynecologist in Iraq: red line violated

The EU stops being soft with 10 Downing Street about Brexit

Greece may offer to China a European gateway

EU-Turkey deal on migrants kicked off but to who’s interest?

JADE Testimonial #3: Sebastian @ Fundraising

Do the EU policies on agro-food smell?

How distorted is the EU labour market by this crisis?

Launch of Pact for Youth: European Youth Forum calls for real business engagement

The strong version of the EU banking union gains momentum

EU deserves the title of the Syrian affair merchandiser

Climate Change Revolution: by-laws for the world

More unemployment and lower wages to make European workers competitive?

A young European voice on Grexit: too high a bill and too big a deal!

Investing in working conditions and quality jobs

Europe rethinking its severe austerity policies

Gender Equality and medicine in the 21st Century: we want the fair share

Austerity lovers and ‘relaxationists’ fight over the EU budget

Youth Guarantee putting young people in jobs

Threats from mammoth banks and Brussels fuel May’s poll rates

From Russia with love: Brussels and Moscow close to an agreement on Ukraine’s gas supplies

Eurozone stagnates after exporting its recession to trading partners

South Eurozone needs some…inflation and liquidity

Assembly of European Regions @ European Business Summit 2014: The European regions on the path to recovery

Is there a chance for the West to win the war on terror?

The race for Driverless vehicles: where is the industry heading?

Eurozone: Economic Sentiment Indicator recovering losses

The European Parliament rewrites the EU budget in a bright day for the Union

Why do thousands of migrants need to be drowned for Brussels to wake up?

Youth Entrepreneurship Issue of the month: JEN, organisers of JADE October Meeting, on why JEs should come together

€5 billion of EU energy efficiency project money spent on “comfort”

The challenges of mental health among the Syrian medical students

Entrepreneurial leadership: what does it take to become a leader?

Minority governments ‘à la mode’ in Europe but can they last long?

Greferendum: the biggest political gaffe in western modern history to tear Europe apart? #Grexit #Graccident

Parliament toughens its position on banking union

What have the banks done to the markets making them unable to bear cheap oil?

ECB offers cheaper money despite reactions from Germany

Fostering intergenerational solidarity and cooperation through age-friendly environments: the right answer to Europe’s demographic challenge

The EU Commission to fight unemployment tsunami with a…scoreboard

Is deflation a real danger for Eurozone?

Eurozone: Bankers-politicians rig keeps robbing taxpayers

How can entrepreneurship tackle the migration crisis in the EU?

What will Germany look like after the next election?

Italian electoral results to change Eurozone climate and weight on the Cyprus issue

Appreciation of euro to continue

MWC 2016 LIVE: Freemium MVNO model a success, claims FreedomPop head

Nitrate pollution of water sources: new impulses for EU Water Policy?

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s