Eurogeddon - fiscal union and German destiny
When you hear of eurozone contagion and fiscal meltdown, do not be alarmed. Such things must happen, but the end is still to come. Nation will rise against nation, and politician against banker. There will be large knock-on effects worldwide and urgent high summits. These are the beginning of death throes.According to David Bloom, currency chief at HSBC, “We are heading towards fiscal union or break-up. Talk is no longer enough as the fire threatens to leap over the firebreak into Spain and Italy. What the market is worried about is Germany's long-term commitment to the euro project. If we see unreserved and absolute backing from the political establishment of Germany, that will be a soothing balm."
And the response of Chancellor Angela Merkel is taken directly from the Monnet grand plan for European integration: ‘There will be no "spectacular step",’ she said. “Just a controlled process of gradual steps and measures.”
And so, gradually, incrementally, salami-slice by salami-slice, we edge towards fiscal union – a monetary union with a single bank, a single interest rate, a single economic policy, and a single taxation policy. It was always obvious to anyone with an ounce of discernment that a single currency would fail in the absence of political union. And here we have it: not with a single ‘spectacular step’, but ‘a controlled process of gradual steps and measures’.
One has to feel sorry for the Greeks (not to mention the Irish and the Portuguese), for they have now ceased to be a sovereign nation. Greece is bankrupt, and he who pays the bail-out calls the tune. But one must also pity the poor German taxpayers, who are now bearing the costs of the entire state debt of Greece. Ambrose Evans-Pritchard in The Telegraph encapsulates perfectly the religio-political dilemma;
In essence, this is a soul-searching drama within Germany over its own national destiny and place in Europe, echoed in the Netherlands, Finland and even France. Europe's confusion reflects the schizophrenia of its ancient tribal nations, each faced with the fateful choice of crossing the Rubicon to an EU Treasury and joint government or letting the EU project unravel after half a century.When we hear talk of ‘German destiny’, we are talking about the self-perceived divine mission to preside over a unified Europe, achievable through a dominating German state. Germany’s Christian Democratic Union has been the driving force of European integration since the end of the Second World War. They are passionate about solidarity, the single market and the EU’s Social Charter. But these political objectives did not have their genesis in the Treaty of Rome: the same ideas were expressed by the Nazi finance minister Professor Walther Funk, the architect of Hitler’s ‘New Europe’. In 1942, he issued a compendium of papers which contained chapters and sections on ‘The Common European Currency’, ‘Harmonisation of European Rates of Exchange’, ‘The European Economic Community’, ‘The European Agricultural Economic Order’, ‘A Common Labour Policy’ and ‘The European regional principle’. In a summary of collectivist ideas and economic structures, he wrote: ‘The individual will be replaced by the people, the world market will be replaced by the living space, and capital will be replaced by the organisation of labour.’
Such a notion of ‘destiny’ or ‘divine right’ was also in the mind of Kaiser Wilhelm II, when he said: ‘…after the elimination of the British and the Jews…the result will be a United States of Europe… The hand of God is creating a new world…a United States of Europe under German leadership.’ The strategy was to consist of a central European economic association through mutual customs agreements, including France, Belgium, Holland, Denmark, Austro-Hungary, Poland, and possibly also Italy, Sweden and Norway. This association, while without a common constitutional over-structure and with the maintenance of external equality of its members, would lead to the establishment of economic domination of Germany over Central Europe.
Former German chancellor Helmut Kohl for many years declared his dissatisfaction with a common market of independent states, and believed it was German ‘destiny’ not merely to lead a European union, but to dominate it. At the time of the Maastricht debates, he said: ‘The European Union Treaty introduces a new and decisive stage in the process of European Union, which within a few years will lead to the creation of...the United States of Europe. There is no alternative to a policy which aims at combination, unless we wish to challenge fate. It has been my policy from the outset to combine indivisibly German unity and the political unification of Europe. For myself, these are two sides of the same coin. We shall only be able to create this greater Europe provided we irreversibly advance the present European core. Both must continue and remain at the top of the agenda: the European Union and the greater European edifice. There is no question of ‘either/or’ here, but only ‘both/and’.’
In stating this, he was merely following the ‘destiny’ mindset of his predecessors. Another former chancellor of Germany, Konrad Adenauer, declared: ‘Germany has a divine mission to save Western Europe.’ Since the era of Charlemagne, the notion of a ‘German destiny’ has been deeply engrained in the national psyche; it is an instinct which has driven Germany in the past, and one to which Hitler frequently referred in his speeches. Helmut Kohl also had dominance and destiny at the forefront of his thinking when he said: “The future will belong to the Germans...when we build the house of Europe... In the next two years we will make the process of European integration irreversible. This is a really big battle, but it is worth the fight.”
In 1994 the CDU, Chancellor Merkel’s party, set out their vision for a federal Europe, with a parliament which they stated would be a ‘genuine law-making body’. They further stated: ‘No country should be allowed to block by veto the efforts of the other countries to deepen integration.’ There can be no other interpretation of these aspirations than that they look to the emergence of a single state, with law-making and tax-raising powers. The CDU document went on to say: ‘Never again must there be a destabilizing vacuum of power in central Europe. If European integration were not to progress, Germany might be called upon, or tempted by its own security constraints, to try to effect the stabilization (a word replete with unpleasant historical echoes) on its own, and in the traditional way.’
His Grace will leave his readers and communicants to reflect on what Chancellor Kohl may have meant by that final phrase. Kohl and Merkel are a world apart from the Nazis, but Kohl did assert his conviction that if there were to be no further European integration, there may well be war. His Grace takes the contrary view: if we proceed along this path, it will surely lead to war. The terms ‘Reich’ and ‘Europe’ are synonymous in German thinking: a strong Reich was always necessary for a strong Europe, and conversely a strong Europe is inconceivable without a strong Reich. This is now Europe’s political law: EU policy is German policy; an assault on EU policy is an attack upon Germany; the failure of the euro represents the fall of the German empire. That cannot happen without Europe-wide convulsions, and the UK will not be insulated from the fallout.
Karl Lamers, the author of the 1994 CDU paper, asserted: ‘The highest interests of the Europeans are identical.’ Try telling that to the Greeks, as unemployment soars, wages are cut, public services are decimated and civil strife takes hold. As Germany achieves her ‘destiny’ as the head of a united Europe, controlling the European money supply is the principal means of sustaining that position. In a speech to the European-Atlantic Group on 12th June 1996, former German ambassador to the UK, Dr Jurgen Oesterholt, declared: ‘Germany is unconcerned with the economic experts who are ranged against monetary union. They will be proved irrelevant by the force of European will. It is Germany’s historic mission and role to provide that will.’
That ‘European will’ has now established a bail-out fund of €2 trillion, contra the received wisdom of the economic experts. The priority is to stabilise the monetary system, even if, as Ambrose Evans-Pritchard points out, ‘this risks pushing German debt levels above 110pc of GDP and causing apoplexy in the Bundestag’.
"We are approaching the endgame for this part of the European sovereign crises: the number of cans that now need kicking down the road would challenge the left foot of Lionel Messi," said Gary Jenkins from Evolution Securities. "The chances are that the EU will only take the step of fiscal union or common bond issuance at one minute to midnight on a weekend when it is clear that the system is close to collapse."As the sun darkens and the moon does not give its light; as the stars will fall from the sky and the heavenly bodies are shaken; we await the man of sufficient stature to hold the allegiance of all people; the one who will lift us out of the economic morass in which we are sinking. Send us such a man and, be he god or the devil, we will receive him. As His Grace prophesied long ago, we are witnessing the birth of the euromark. And so the plan will be perfected: the 'Germanisation of Europe’ will be complete; her ‘destiny’ fulfilled.
ADDENDUM (22 July 2011)
Some readers have found this post 'racist'. It is nothing of the sort. Indeed, in The Daily Telegraph, Peter Oborne alludes to the same 'German destiny' in his article 'The euro crisis will give Germany the empire it’s always dreamed of'. He observes:
Yesterday’s witching hour of the European Union means that Germany has come very close to realising Bismarck’s dream of an economic empire stretching from central Europe to the Eastern Mediterranean.Oborne chose Bismarck; His Grace focused on Kaiser Wilhelm II and Professor Funk. No difference at all. Is Oborne 'racist'?