Resentment in the North: Rich EU Members Lose Patience with the 'Olive Zone'

The rich countries of the northern euro zone are bearing the brunt of bailing out their debt-stricken fellow members. Resentment is growing among their populations, helping euroskeptic right-wing populists to win support. But there is little awareness of how much the European Union has done for their own countries. By SPIEGEL Staff.

Officially, of course, the one-euro coin is worth the same everywhere. But given the current state of the euro zone, you could be forgiven for thinking that the coin with the Greek owl or Spanish king on its reverse is worth less than one bearing, say, a German eagle or the silhouette of the Netherlands' Queen Beatrix.

An invisible crack now divides the euro zone. With their triple-A rating from the American credit rating agencies, six of the euro zone's 17 member states are considered sound borrowers. And the more government finances in Greece, Portugal, Italy, Spain and Ireland are thrown out of kilter, the more the countries with the best credit ratings are expected to vouch for the euro. They include, in addition to Germany and France, Finland, Luxembourg, the Netherlands and Austria.

From the Austrians eating at sausage stands in Vienna to the regulars at fish stalls in The Hague, to Luxembourg bankers and Finnish businesspeople, many in the euro zone's model countries seem conflicted nowadays. They are torn between the strong suspicion that some of their hard work is going down the drain with the hundreds of billions that are currently disappearing into aid packages and bailout funds for threatened EU countries, and the hope that their political leaders, in their efforts to appease citizens, might be right after all.

This euro crisis is not only about rescuing a common currency. It's about fundamental questions of political union.

It's about the suspicions of many Europeans that people in the southern part of the EU, derisively referred to as the "olive zone," lived well at the expense of others, and that those who were more careful with their money are now expected to swallow the poison that is making its way northward. On the other hand, it is not clear whether the EU will be able to continue in its current form if some countries are effectively under receivership while the strong economies are in a position to call the shots in future. Is there a threat that Germany, the economic giant among the triple-A countries, could unintentionally become the leading power in Europe through its fiscal authority?

'We Wouldn't Stand a Chance Without the Euro'

Such issues are not at the top of Heikki Vauhkonen's mind. A cheerful businessman with thinning hair, he heads a publicly traded family company in Helsinki that makes sauna heaters and soapstone stoves. "Finland is a small country with big neighbors," says Vauhkonen. "No one in industry here would think of breaking up the euro zone or withdrawing from it. We live from exports -- we wouldn't stand a chance without the euro."

Anne-Catherine Berner, also from Helsinki, shares his views almost to the letter. With a degree in business administration, Berner represents the third generation to run the textile company established by her family. At the same time, she heads an association of family-run companies that employ a total of 170,000 people and generate €30 billion ($43 billion) in annual revenues. Berner, also a strong advocate of Europe, says: "Searching for individual solutions doesn't help Finland."

Finnish Prime Minister Jyrki Katainen seems to disagree, which might explain why his finance minister announced an agreement last week on "collateral" for Finnish bailout loans to Greece. Under the agreement, the Greeks are expected to deposit about €500 million into an escrow account with the Finnish state in return for the roughly €1.4 billion Helsinki is required to contribute to the €109 billion European aid package for Greece. Finland will hold on to the money, which will be invested in triple-A securities, until the debt is repaid or the collateral plus accumulated interest equals the Finnish contribution.

Critics across Europe see this solo effort as a foolish attempt by the Finns to limit their own risks at the expense of others. If only one of the donor countries, which may now be tempted to conclude similar agreements, were to reject Finland's special provision, the entire bailout package for Greece will fall apart. The Finnish premier is not impressed by such prospects. He sees the aid for Greece from the perspective of a businessman. "The other euro countries know that Finland will not participate in this package if we are not provided with any collateral," says Katainen.

'Economic Gangrene'

Katainen, who has been in office since June, is clearly under pressure. Finland, next to Luxembourg and Estonia, is one of only three countries in the euro zone that are in compliance with the debt limits imposed by the Stability and Growth Pact. With its population of roughly 5 million, it is one of the biggest net contributors to the EU in relative terms. In 2010, Helsinki's payments to the EU exceeded the subsidies it received by 0.32 percent of its gross domestic product (as compared with 0.26 percent for Germany).

But since the established parties suffered a serious setback in the 2011 parliamentary election, in which the right-wing populist True Finns, under Timo Soini, captured 19.1 percent of votes, something of a sea change has begun in this northern European model country. The established parties are now trying to curry favor with the protest voters.

But they are not conveying their message as effectively as Soini does. He says that Europe suffers from "economic gangrene" caused by individual countries. "As long as we don't amputate what can no longer be saved, we risk poisoning the rest of the body." Polls indicate that some 23 percent of voters now agree with the diagnosis of the euroskeptic True Finns.

Finnish Minister for European Affairs and Foreign Trade Alexander Stubb openly admits that "the True Finns have backed us into a difficult corner," and that in the future the government will have to proceed "much more resolutely than before." Nevertheless, he promises: "We want to be part of the solution and not part of the problem."

Austria's Rising Right

Austrian Finance Minister Maria Fekter, who is doing her utmost to explain to voters why booming Austria should have to bleed for the starving olive zone, is fuming over the Finns these days. At the end of last week, Fekter sent her Finnish counterpart a venomous letter addressing their unilateral actions.

Fekter, nicknamed "Gravel Mitzi" because of her parents' gravel business (the name Mitzi is a form of Maria), is looking a little stern as she participates in an Internet chat with the online edition of the Austrian magazine NEWS. She has hardly had a chance to sit down before she is peppered with mean-spirited questions. "How can you justify giving away Austrian taxpayer funds to foreign countries?" one person asks. "How much longer will this euro dictatorship last?" asks another.

The minister puts up a good fight. She has seen the unflattering morning headlines in the popular newspapers about Belgium's Herman Van Rompuy, a center-right Christian democrat like Fekter who is now expected to lead a European economic government. She has read the criticism of the billions being sunk into the EU. Fekter is also familiar with the opinion polls showing that the right-wing populist Freedom Party of Austria (FPÖ) is now the strongest party in Austria, a country that has benefited more than most from the EU. The FPÖ's chairman, Heinz-Christian Strache, has called the euro bailout fund "a mass expropriation for the Austrians."

Fekter collects herself and straightens her body. Then she valiantly sends her message to the online readership: "The euro is a success story. It is one of the world's strongest currencies."

Only after her Internet flirtation with voters has ended, and she is already on her way out, does Fekter add that countries like Austria are paying close attention to the German-French approach to dealing with the euro crisis through bilateral meetings. "We small countries have a problem with two large countries getting together and then wanting to impose something on us." She insists that Austria is most of the time in agreement with the German approach, but adds: "I respect Angela Merkel, but I prefer to personally fight for the interests of my own country."

The Benefits of Europe

Less than 1,000 kilometers (625 miles) to the west, in the Kirchberg district of Luxembourg City, is the office of a man who plays an important role when it comes to the euro, the German economist Klaus Regling. He helped develop the Stability Pact and later, on behalf of the European Commission, reprimanded the administration of former German Chancellor Gerhard Schröder for not sticking to the deficit rules. Now he is the CEO of the European Financial Stability Facility, the rescue fund which the euro-zone members decided to set up in May 2010. Regling is now the man charged with preventing the collapse of the common currency with the help of the EFSF.

Judging by the mood among the people surrounding Regling's office on Avenue John F. Kennedy, everything will turn out all right. Here, where Luxembourg's bankers, EU officials and other well-off employees are constantly coming and going, where clever financial service providers manage and invest €2 trillion in assets. Here, it is hard to imagine a world without a united Europe.

The small grand duchy, one of the co-founders of the European Economic Community in 1957, later helped in the development of the EU and the euro. It has always been one of the model pupils in the euro zone.

"We have always earned our money," says Benoît Tesch, a consultant with PricewaterhouseCoopers, who is standing with a half-full glass of beer in the "Urban" bar in Kirchberg. According to Tesch, open borders are Luxembourg's capital, adding that if Europe goes downhill, it's logical to conclude that his country will go down with it. "But if Europe is doing well, we do even better," he says.

According to a study by the Swiss bank UBS, employees in Luxembourg have the third-highest purchasing power worldwide. Even Paul Helminger, the city's mayor for the last 12 years, would not consider it unseemly if his electorate were called upon to contribute generously to the European bailout fund. There is a price to be paid for the benefits Luxembourgers derive from Europe, says Helminger. Without Europe, their slice of the pie would be "not as tasty and not as big."

Dealing with the 'Garlic Countries'

In the Dutch city of The Hague, there is little evidence of the affluent ease of established Luxembourgers. With his platinum-blonde hair, hand-stitched shoes and navy-blue suit, Geert Wilders, head of the right-wing populist Party for Freedom (PVV), looks like the devil incarnate as he sits in the front row of the Dutch parliament.

Wilders is a political curiosity, both a silent partner and a thorn in the side of the conservative administration of Prime Minister Mark Rutte. He will only comment on the efforts to save Greece through his spokesman, who delivers the following statement: "Long live the euro, and the Greeks will drink another glass of ouzo to that."

His spokesman, speaking for Wilders, also explains the reason for this plenary session of the Dutch parliament in the middle of the summer recess. It is, he says, to address the debts of the "garlic countries." The phrase sounds notably less sympathetic than the term "olive zone."

This extraordinary session was called to address Greece and the bailout package, the issues of rich and poor in Europe and the eternal question of the transfer union. The Dutch, like the Germans, are net contributors. Even the growth rates of the two economies were almost identical in the last quarter: a paltry 0.1 percent.

But most of all, the session on these two days in the stone Binnenhof complex, the seat of the parliament, revolves around the man who is sitting in the first row, on the far right side, looking as if he is not even involved. In the WikiLeaks cables, US diplomats once referred to him as the "golden-pompadoured, maverick parliamentarian Geert Wilders."

The otherwise vocal rebel, currently the key figure in Dutch politics, leans back in his blue leather armchair, says nothing and watches the proceedings. There is no need for Wilders to say anything, because others are speaking for him -- including Prime Minister Rutte, who interrupted his vacation to attend the session.

Facing Angry Voters

Wilders tolerates Rutte's minority government, a coalition of the conservative-liberal People's Party for Freedom and Democracy (VVD) and the center-right Christian Democratic Appeal (CDA). It is a unique political construct. There are agreements between the government and Wilders in which his wishes are specified as the government's objectives. And Wilders, in addition to being an avowed critic of Islam, is also, as he readily admits, an "anti-European."

This odd arrangement places Rutte in a delicate position. The strictest of control mechanisms for the debtor nations are necessary, he says, but adds, in a concession to Wilders, that this absolutely cannot translate into more power for Brussels.

Wilders can indeed lean back and relish his position. He is not held responsible for the aid payments to Greece, which are, after all, part of the government's policy. At the same time, he is not a powerless member of the opposition. He pulls the strings behind the scenes, while others -- "his vassals," as Wilders' opponents now refer to members of the government -- are left to face the fury of angry voters.

The desolate state of a few southern EU countries is one of Prime Minister Rutte's problems, but by no means the only one. In fact, his real problem is his dependency on Wilders, with whom he meets every Monday morning before delivering his weekly report to Queen Beatrix, the head of state.

Skepticism in a Small Country

"Wilders is always first," Alexander Pechtold, the parliamentary floor leader of the social-liberal party D66, says sarcastically. Pechtold, 45, is sitting in a café on the Plein, the square in front of the parliament building. After six hours of debate, he seems more annoyed than exhausted. Pechtold's constant attacks on Wilders and the coalition government have made him something of an opposition leader. His party holds less than half as many seats as Wilders' PVV. Its slogan in last year's election was: "Europe: Yes."

"We have a problem," says Pechtold, "and it's the populists." According to Pechtold, they have managed to manipulate public opinion in such a way that skepticism about Europe is totally out of proportion to the benefits the EU offers the Dutch. "We Dutch are a trading nation, a small country," he says. "Our prosperity has always depended on cooperating with others."

The Finns, Austrians, Luxembourgers and the Dutch will probably all have to pay for the sins of others, at least until the next elections. But then the anti-European forces in Helsinki, Vienna and The Hague could very well win even more votes.

MANFRED ERTEL, JULIA AMALIA HEYER, VOLKMAR KABISCH AND WALTER MAYR

Translated from the German by Christopher Sultan