Friday 20 September 2019

Protectionism comeback in new anti-EU agenda

German policy is leading to a defensive backslide into nationalist politics, writes Carol Hunt

'THE euro's dead. Long live Germany!" was the uber-nationalist cry earlier this month from top German lawyer, Markus Kerber. He's currently suing the German government in an attempt to stop it 'bailing out' bankrupt neighbours, starting with Greece and then going on to Ireland, Portugal, Italy, Greece and Spain -- none of which he believes is a 'worthy member' of the Eurozone.

He's not alone. Market analyst and author Michael Mross is among the experts who say the Germans are at boiling point.

"If the problems of the euro become more and more, bigger and bigger, higher and higher, it's not excluded [that] German people [will] go on the street and say we don't want to pay any more," he warns.

The Germans are angry. Perhaps rightly so -- as one Frankfurter said: "We're just certainly not responsible for the debts and the deficit run in Portugal, Greece, in the 'PIGS' states."

Maybe they are, maybe they aren't, maybe it's a bit of both; but a glance at history shows that Germany still has a debt to pay her fellow Europeans.

In an interview published last Thursday in Spiegel online, economic historian Albrecht Ritschl argued that Germany -- not Greece or Ireland or any of the so-called 'Pigs' -- has been by far the worst debtor nation of the past century, and the one shown most debt forgiveness by its neighbours.

Ritschl reminded his interviewer, "In the 20th Century, Germany started two world wars [okay, the first is debatable], the second of which was conducted as a war of annihilation and extermination, and subsequently its enemies waived its reparations payments completely or to a considerable extent.

"For Germany, that was a life-saving gesture, and it was the actual financial basis of the economic miracle (that began in the Fifties). But it also meant that the victims of the German occupation in Europe also had to forgo reparations, including the Greeks."

Ah, the Greeks who reluctantly had to bear gifts. "No one in Greece has forgotten that Germany owes its economic prosperity to the grace of other nations," says Ritschl.

So it seems.

When the Germans accuse them of having lied about their deficit and debt, and insist that Greece is well known for corruption and not paying taxes, the Greeks repeat the accusations made by their Deputy Prime Minister Theodoros Pangalos last year when he said (in an interview with BBC): "They [the German government] shouldn't complain much about stealing and not being very specific about economic dealings [from Greece]."

Now, why would that be, Mr Pangalos?

Why? Because, says he: "They [the Nazis] took away the Greek gold that was in the Bank of Greece, they took away the Greek money and they never gave it back."

Oh dear, wars have been fought for less.

And Mr Pangalos isn't the only one who thinks German policy is destroying the European union. Two weeks ago, billionaire George Soros told German weekly Die Zeit, "German policy is a danger for Europe, it could destroy the European project."

And things really don't seem to be looking too good for the technocratic Euro-philes who hoped that a monetary union (without fiscal union) would prove unworkable (as it has) and inevitably lead to a Federal United States of Europe.

Was this -- as some cynics suspect -- their plan all along? If it was, they forgot to factor in a defensive backslide into nationalist politics by countries hit by unemployment, little economic growth and a growing sense of injustice.

As Soros said: "Right now the Germans are dragging their neighbours into deflation, which threatens a long phase of stagnation. And that leads to nationalism, social unrest and xenophobia. Democracy itself could be at risk."

He could very well be right. Protectionism is once again part of the new anti-EU agenda. And of course, it's not just the Germans. In France -- as in much of the rest of Europe -- the far right is appealing to disillusioned citizens, meaning President Nicolas Sarkozy has to adopt a more protectionist, nationalist stance to attract these voters.

Last month, following disputes between France and Italy over Italy permitting North African immigrants to travel through Italy and into France, the European Council of Ministers agreed to debate proposals to restore passport controls to people travelling from one EU country to another. As reported in Marketwatch last week, this strikes at the heart of the whole idea of free movement through the EU. And in Denmark, the Liberal minority government was recently forced to introduce passport checks to maintain its parliamentary majority support from the anti-immigrant Danish People's Party.

What's next? Tariffs? Trade wars? An invasion by men in suits who will conquer and control us with private bank debts?

Oh, we've already had that.

The only thing that can save the euro now -- and possibly the entire European project -- is federalisation. And that just ain't going to happen. No one -- certainly not Germany -- wants to pay for a new Marshall Plan.

But without it, Greece will default, followed by Ireland, Portugal, Spain... and on and on it will go. And where it will stop, nobody knows.

Ironically, just when Europe needs to pull tighter together to prevent self-serving nationalism and vengeful social unrest occurring, political thinking and public sentiment is set on doing the exact opposite.

The sabre-rattling European powers are playing a very dangerous game.

Sunday Independent

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