Patrick Donahue reported last week for Bloomberg News in Pressure Builds On Merkel As Spain Calls For Bank Aid 06/04/2012, just before the latest clunker of a Spanish bank rescue plan was announced:
As markets brace for further deterioration in Spain’s finance sector and a possible Greek departure from the 17-member euro area, the Canadian government said that finance ministers and central bank governors from the Group of Seven countries will hold a conference call tomorrow to discuss the European debt crisis.If Angie is really thinking in terms of "a process of European integration lasting 'many years'" before she would even agree to eurobonds, which are a necessary element of solving the current crisis, and necessary this summer, I'd say she's lost without any good idea of how to move forward any any other way but austerity, austerity, austerity.
Rajoy sought to open a new avenue of crisis fighting on June 2, when he added his voice to calls for a "banking union" in Europe involving a centralized system to re-capitalize lenders. Merkel shut off another potential solution the same day as she toughened her opposition to euro-area debt sharing, telling members of her party that "under no circumstances" would she agree to euro bonds.
Options "that resemble euro bonds" are conceivable after a process of European integration lasting "many years," Merkel’s chief spokesman, Steffen Seibert, told reporters in Berlin today. For now, "it's up to national governments to decide whether they want to avail themselves of aid from the backstop and accept the conditions linked to it, and that of course also applies to Spain." [my emphasis]
Former Foreign Minister Joschka Fischer writes about The Threat of German Amnesia 05/25/2012 Project Syndicate, German version Europa am Abgrund. Though it's dated May 25, it's interesting to see that it didn't cause much of a stir until the 04.06.2012 Süddeutsche Zeitung published it under the online title of Europa steht in Flammen (Europe Is In Flames).
Now we've got the Financial Times Deutschland reporting that Fischer criticized Angie hard and almost called her a Nazi! (Peter Ehrlich, Harte Kritik an Merkel. Joschka Fischers ultimativer Beinahe-Nazi-Vergleich 04.06.2012) Fischer didn't almost call her a Nazi. What he does do in that piece is recall the highly relevant and important lesson that German Chancellor Heinrich Brüning, who served in that role from 1930-32 and applied Angie-like austerity policies to that depression. More precisely, he says:
The recent elections in France and Greece, together with local elections in Italy and continuing unrest in Spain and Ireland, have shown that the public has lost faith in the strict austerity forced upon them by Germany. Merkel’s kill-to-cure remedy has run up against reality – and democracy.The consequence of continued depression and high unemployment didn't have the happiest aftermath in Germany. I thought until this current depression hit that it was generally understood that depressions allowed that drag on for a long time are potentially hazardous to democracy altogether. But it apparently isn't.
We are once again learning the hard way that this kind of austerity, when applied in the teeth of a major financial crisis, leads only to depression. This insight should have been common knowledge; it was, after all, a major lesson of the austerity policies of President Herbert Hoover in the United States and Chancellor Heinrich Brüning in Weimar Germany in the early 1930’s. Unfortunately, Germany, of all countries, seems to have forgotten it. [my emphasis]
The part about which Ehrlich mainly complains, though, is Fischer's also-sensible conclusion:
Do we Germans understand our pan-European responsibility? It certainly does not look that way. Indeed, rarely has Germany been as isolated as it is now. Hardly anyone understands our dogmatic austerity policy, which goes against all experience, and we are considered largely off-course, if not heading into oncoming traffic. It is still not too late to change direction, but now we have only days and weeks, perhaps months, rather than years.Elsewhere at the Süddeutsche Zeitung website, commentator Heribert Prantl seems to be having an American-style pearl-clutching hissy fit:
Germany destroyed itself – and the European order – twice in the twentieth century, and then convinced the West that it had drawn the right conclusions. Only in this manner – reflected most vividly in its embrace of the European project – did Germany win consent for its reunification. It would be both tragic and ironic if a restored Germany, by peaceful means and with the best of intentions, brought about the ruin of the European order a third time.
Für die Schärfe dieser Kritik gibt es keinen Vergleich. Noch kein früherer Außenminister hat mit der Politik der Nachfolgeregierung so zornig und drastisch, so furios und brutal, so besorgt und alarmiert abgerechnet. Joschka Fischer wirft der Kanzlerin vor, sie lösche den Brand Europas mit Kerosin.Lawdy, Miss Mellie, bring me the smellin' salts! Honey, I'm about to just faint dead away! That ruffian criticized the Chancellor! Why, that's just not done in polite society!!
[There no comparison for the sharpness of this criticism. Never has a former Foreign Minister passed judgment on the policy of a successor regime so angrily and drastically, so furiously and brutally, Joschka Fischer accuses the Chancellor of putting out the European fire with gasoline.]
I guess Herr Prantl just slept through all those stories over the last, oh, 40 years or so about Fischer's one-time role as a street-fighting militant in Frankfurt. But please don't anyone tell him that. The poor man's likely to have a heart attack on the spot.
Prantl in that piece doesn't offer much in the way of solutions to the euro crisis, only vague platitudes about the need for Germany to be active and how Angie is a nice lady with good intentions.
Tags: angela merkel, austerity economics, eu, euro, european union, greece, joschka fischer