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

Featured Stings

On Human Rights Day European Youth Forum calls for end to discrimination of young people

This afternoon Britain will be once more isolated from mainland Europe

Eurozone: Disinflation engulfs the industrial goods sector

Vulnerable young people must not be blamed & stigmatised for violent radicalisation

Britain and Germany change attitude towards the European Union

Alice in Colombia

The Parliament defies a politically biased Banking Union

The big challenge of leadership and entrepreneurship in Europe

Eurozone’s north-south growth gap to become structural

On the euro but out of it?

EU sets ambitious targets for the Warsaw climate conference

Intel @ MWC14: Our Love Story with Mobile – Transforming Wireless Networks

Trump asked Merkel to pay NATO arrears and cut down exports ignoring the EU

Everybody against Germany over the expensive euro

Doctors without borders

Arlington, USA: kick-off of the fifth round of the EU-US boxing match

European Confederation of Junior Enterprises hosts in Geneva the Junior Enterprise World Conference

ECB embarks on the risky trip to Eurozone banking universe

Medical students: The need for emigration

While EU Open Days 2013 discuss the 2020 strategy, Microsoft shares a glimpse of EU 2060

The scary EU elections result and the delayed Council’s repentance

China’s stock markets show recovery signs while EU is closely watching in anticipation of the €10bn investment

Germany fears that Americans and Russians want to partition Europe again

Trailing the US-EU economic confrontation

YOUTH RIGHTS AT RISK FROM RISE OF EXTREME-RIGHT AND POPULISTS IN THE EUROPEAN PARLIAMENT

EU to negotiate an FTA with Japan

ECB readies itself for extraordinary monetary measures defying Germany

Zhua Zhou: Choosing The Future

Marco Polo’s Dream

Any doubt?

Happens now in Brussels: Green Week sets the EU and global climate policy agenda

The completion of the European Banking Union attracts billions of new capital for Eurozone banks

Germany to help China in trade disputes with Brussels

Exchanges of medical students and the true understanding of global health issues

Access to health in the developped and developing world

Will the EU ever tackle the migration crisis despite the lack of political will?

GSMA Mobile 360: Connecting Cities, Connecting Lives, Connecting Europe

French elections: by the time the EU economy revives and the migration crisis is solved extremists could take over Europe

The next 48 hours may change the European Union

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

18th European Forum on Eco-innovation live from Barcelona: What’s next for eco-labelling?

Intel, Almunia and 1 billion euros for unfair potatoes

COP21 Breaking News_03 December: Europe’s children urge leaders to commit to climate action at UN Climate Summit in Paris

No better year for the EU’s weak chain links

Can Kiev make face to mounting economic problems and social unrest?

EU and Amazon cut deal to end antitrust investigation over e-books deals

COP21 Breaking News_03 December: There is a new draft agreement on the negotiating table

Fear casts again a cold, ugly shadow over Europe; Turkey sides with Russia

The European Commission cuts roaming charges. But “it’s not enough”…

A hot autumn after a cool summer for Europe

EU-US to miss 2015 deadline and even lose Germany’s support in TTIP’s darkest week yet

Can the banking union help Eurozone counter its imminent threats?

Should Europe be afraid of the developing world?

Access to ‘affordable’ medicines in India: challenges & solutions

Is Europe misjudging its abilities to endure more austerity and unemployment?

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

Global Citizen – Volunteer Internships

10 months were not enough for the EU to save the environment but 2 days are

The EU accuses Russia of bullying Ukraine to change sides

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 )

Twitter picture

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

Facebook photo

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

Google+ photo

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

Connecting to %s