Stubborn and Egotistical Europe Is Right to Doubt German Euro Leadership
The drama over Cyprus has made clear that the euro-zone crisis is developing into a struggle over German hegemony in Europe. On the surface, Merkel and Schäuble seem to be working to stabilize the economy. In actuality, they're binding other nations with the shackles of debt.
Throughout Cyprus's financial crisis, German power has been on display. But Germany is pursuing the wrong ojectives, showing how it's incapable of wielding its power correctly. Cypriot leaders came up with the idea to make their own small-scale savers liable for the bankruptcy of the banks -- with the approval of Germany -- because they wanted to hold true to their principles of crime and punishment.
All of Europe, indeed the entire world, took notice. Despite deposit insurance and Chancellor Angela Merkel's own promises, in the end it's the common people who suffer? The plan was withdrawn, and now the burden is falling mostly on wealthy Russians. But the damage is done, confidence undermined. What is the chancellor's word actually worth? Cyprus has shown once again that Europe can't rely on the Germans.
Fortunately the Euro Group has now made the right move. Those with smaller deposits are safe, one bank goes bankrupt and another is downsized. But the theatrics of the past week fit well into the image Europe is projecting right now: Irresponsible bankers gamble away the money of even richer money-launderers, and the politicians help both groups to save themselves as best they can -- at the expense of the common people, who have neither the resources nor the influence to bring themselves to safety. And all of that takes place under German domination.
That was a sign. The chancellor indulges herself and the Germans in the luxury of navel-gazing. Historical memory is essentially wiped away, good for little more than cozy evenings when we wrap ourselves in blankets and ogle at the moral failures depicted in World War II TV dramas, like the recent German miniseries "Our Mothers, Our Fathers."
But this means nothing for the present. Just like twice before in our recent history, the Germans are falling deeper and deeper into conflict with their neighbors -- regardless of the cost. It's a path that could easily lead to fear of German political hegemony on the Continent. Indeed, Merkel's idea of European integration is simply that Europe should bend to Germany's political will.
Surrounded by Idiots?
As the Cyprus ordeal intensified, a truth about German politics was revealed: They are characterized by a stubbornness that Germans see as sticking to their principles, but what is in fact nothing more than self-righteousness. With her European political maneuvering, Merkel has broken all West German traditions. And she did so with less squeamishness than she had in breaking the traditions of her own party. Merkel's chief adviser for European affairs, Nikolaus Meyer-Landrut, laid it out for her in the summer of 2011. Everything for which Brussels is responsible works just fine, he told her, while areas that fall to member states are in disarray. Thus it would be logical to grant Brussels more power. But Merkel decided otherwise.
Under Angela Merkel's leadership, the Europe of nation states has been revived -- a trend against which former Chancellor Helmut Schmidt issued a stark warning. "The German Federal Constitutional Court, the Bundesbank and Chancellor Merkel are acting like the center of Europe, to the exasperation of our neighbors," he said, and a portion of the public opinion is prone to a "national-egotistical view" of Germany. Schmidt, who lived through all of Nazi Germany and World War II, is not one to use these words lightly.
Nikolaus Blome, deputy editor-in-chief of the mass-circulation tabloid Bild, wrote an editorial that called Cypriot parliamentarians "Cypr-IDIOTS" because they voted against the EU plan to tax bank deposits. But if we've learned anything from the best-selling "Diary of a Wimpy Kid" children's book series, it's that those who see themselves surrounded by idiots are usually idiots themselves. Out of this euro crisis is emerging a conflict over German hegemony in Europe. It looks to be based on economics, when in fact it is based on the politics of power.
The Germans bind the European people with the shackles of debt -- an action American anthropologist and Occupy Wall Street activist David Graeber judges as pernicious. "If history shows anything, it is that there's no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt -- above all, because it immediately makes it seem like it's the victim who's doing something wrong," he wrote in his 2011 book "Debt: The First 5,000 Years."
Germany Pays for (and Profits from) Crisis
As in the past, underdogs today are being ridiculed. Whoever has debts is guilty of their own crime.
That line of thought leaves room for both accusations and self-pity, as evidenced by conservative columnist Hugo-Müller Vogg. "Without German guarantees, there would be no bailout," he wrote in a Bild column last week. "Yet of all people, we Germans are the subject of criticism, even outright hatred, in crisis-plagued countries. The chancellor is denigrated with the Hitler moustache, German flags are torn apart and we Germans are the evil ones to be blamed for all misery." From this proceeds a conversation in bars and at dinner tables, among proletarians and professorials -- who could hand a glowing success in upcoming federal elections to the new right-wing populist party "Alternatives for Germany."
This is all a lie. Germans haven't just paid for the crisis, they've also profited from it. The savings in interest payments, which Germany have enjoyed since the beginning of the crisis, amounted to 10 billion last year alone. Plus there are the interest payments from debtor nations. The reality of the euro crisis is this: The poor of Athens are paying the rich in Germany.
Such experiments failed in the past, and they will fail in the future. Europeans will not allow it. As Germans keep cheering on their chancellor, they should mark the words of former Euro Group chief Jean-Claude Juncker: "Anyone who believes that the eternal issue of war and peace in Europe has been permanently laid to rest could be making a monumental error. The demons haven't been banished; they are merely sleeping."