Blog 2023 Malcolm Blair-Robinson

It is now accepted worldwide that there is a political as well as financial crisis facing the Euro zone. This crisis has global potential. At the heart of it is an acceptance of Germany’s economic authority by France. Once these two agree, the rest will fall into line. But to work, to have effect, to be seen to have effect and to set the euro on the path to recovery, France must concede to Germany. The world is beginning to wonder whether this will happen.

Germany’s economic power in Europe is overwhelming. It contributes half of its bailout funds. Its political view, supported by the mass inclination of its voters, is for a model of financial rectitude based upon hard work, thrift and sound money. This jars with the less austere and more permissive financial regime which France has always preferred, favoured too by Italy and taken to extremes by others, notably Greece.

Germany did not get here in one easy bound. Its history is the most brutal and tormented in Europe. It has unleashed destruction upon others and itself been destroyed. He has known hyper-inflation when a loaf cost trillions of a currency which had been made worthless. It has had military, political, economic and social baptisms of unprecedented fire. Yet though it all it has emerged as Europe’s foremost economic power. It will not surrender what it has gained at such cost to pay the debts of economic playboys.

Europe had the option, long since gone, to set up structures which would create a democratic framework for unified economic governance within the euro zone. Now Greece is going bust, a sixty per cent write off is being canvassed, the banks are in peril and nobody can agree. It was thought that the spendthrift might have to leave and the northern countries would make a go of it together. But this cannot happen if France and Germany are not in accord. There are now two possibilities for an outcome of the multiple summits now in progress. Once is a fudge of committees and fiddles which will avert calamity now, but make it certain later. The other is to do it Germany’s way.

There is a third prospect, looming like an ogre in the shadows. No agreement of any kind. This means calamity now. Mayhem by next weekend.

This entry was posted on Saturday, October 22nd, 2011 at 11:18 am and is filed under Malcolm Blair Robinson. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.