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Andrew Sullivan's Level Headed Take on Europe

Andrew Sullivan has a reputation in some circles for overreacting to current events, and here at Via Meadia we’ve challenged what seems to us an overwrought fear of creeping “Christianism” that from time to time pops up on his blog.

But when it comes to the EU, Sullivan has sang froid in spades, writing that “My view is that at some point, Germany is going to rescue the euro, and provide the funds necessary for it. Merkel will not let the European project die on her watch. Her country’s entire postwar identity is rooted in it.”

There is a dark cloud to the silver lining.  Sullivan continues gloomily: “And so a project designed to put a line against any new wars, after Germany’s serial aggression, will end up making Europe a German-based, German-run and German-funded country.”

This view of the case is generally more common in the UK than in the US, and reflects British concerns about German power that are often less keenly felt here on the side of the pond where memories of World War Two are dim and far-off, mist-enshrouded Germany more looks like an Oregon sized country that makes some good cars than an unstoppable juggernaut crushing Europe beneath its wheels.

Sullivan could well be right, but at the stately Mead manor in glamorous Queens we tend to see more obstacles in Germany’s path.  I’m agreed that Chancellor Merkel has no intention of being the chancellor who threw Europe away, but both at home and abroad she faces some challenging constraints.  I think there is a non-trivial chance that events could move too far, too fast for her to step in.  Some kind of banking crisis in France, for example, could create an immense and overwhelming mess.  Anything that affects France’s credit rating could lead to a position in which no simple and effective solution could be put in place quickly enough to stop an unpredictable and uncontrollable set of financial consequences.  Chancellor Merkel does not have a free hand at home; the German Constitutional Court and fractious coalition partners are watching her closely.

And even if the crisis presents itself in a form which Germany can master, Europe is a surprisingly hard continent to control.  None of the other European countries want a German led Europe (Austria just possibly excepted), and the French and the Italians are extremely clever.

Nevertheless, in broad terms, Sullivan has identified the two most likely outcomes of the European mess.  Germany at some point will take decisive action, and its influence in post-crisis Europe will grow.

I once heard Henry Kissinger say that from the standpoint of history, “The unification of Germany is more important than the rise of the European Union.  The fall of the Soviet Union is more important than the unification of Germany.  And the rise of India and China is more important than the fall of the Soviet Union.”

I thought he was right then, and think he is right now.  Andrew Sullivan seems to agree.

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  • vanderleun

    Well, if Sullivan agrees it can only mean that you are all wrong. As we learn in the sacred book of the Rolling Stones: “War, children, it’s just a shot away
    It’s just a shot away.”

  • joe

    Merkel will only contemplate leaving the Euro if she receives something comparable to pacify the electorate. If this new Frankfurter Gruppe becomes what it threatens, the ultra-legal, executive committee of the EU, I think that Merkel can sell Germany’s continental economic dominance to the people and leave the Euro, should circumstances demand it.

    Too many people misinterpret Germany’s actions through a 20th century prism. Germany does not want to be a powerful international player (if it can’t be done cheaply). It only wants peace and good trade relations, both of which it enjoys. Germany has regressed to the boring, backward foreign policy of the German States in the 18th century.

    If Germany’s influence in its immediate periphery is guaranteed, Germany is not going to indemnify the indolence of the Latin south.

  • Otiose

    I’m skeptical with regard to Merkel or the Germans being able (apart from whether they’re willing) to step in to “rescue the euro, and provide the funds necessary for it”.

    The problem is not the unit of account, the Euro, but with policies that have promoted the accumulation of unsustainable levels of debt to finance deficits – deficits financing wealth distribution and ever larger and unproductive layers of government.

    So there is no ‘contagion’. The policies and actions that brought the Europeans to this point were done years ago. There is, however, a spreading awareness of the unsustainability of those policies. The idea that measures to increase confidence will restore matters and allow the spending to continue are just wrong.

    However, the most important reason that the Germans can’t step in to fix things is that there aren’t enough Germans supplying enough money to satisfy the potentially unlimited demands that the Greeks, Italians, and others will place upon them.

    And anyone who believes that the Italians, for example, are going to pass and implement reforms sufficient to eliminate their deficits and restore an ability to pay down their debts is mistaken. Those reforms will only occur when the money runs out.

    There is another deeper misunderstanding concerning how to ‘fix’ this situation. The larger economic establishment believes that government spending and welfare payments cannot be cut because such austerity will trigger a downward spiral – negative growth – from which no recovery is possible. They see the pathway to growth in maintaining spending levels until growth can resume/recover. In effect this is a denial of Say’s observation that wealth is created by production not consumption.

    Spending itself doesn’t create economic growth, which is why government spending more often than not doesn’t stimulate anything but higher debt levels.

    As long as governments continue to divert resources from productive private sector deployment growth will be depressed.

    Spending cuts – reduction in government and redistribution of wealth – is a necessary precondition to the private sector regaining control of and deploying resources in ways that potentially can increase wealth production i.e reignite strong growth.

  • Kenny

    But does Germany have the resources to rescure Europe?

    No, especially since Germany itself is all but dying demographically. Fact.

    All Germany can do is throw some good money after bad and kick the can down the road for a while longer. Big deal.

  • Corlyss

    “we tend to see more obstacles in Germany’s path.”

    Phew! Thank goodness for that!

    @vanderleun: It will be interesting to see how the nations of Europe react to becoming non-German speaking economic provinces of a Greater Germany. Somehow I don’t think they fought and died for that outcome 70 years ago.The combatants might be dead, but the memories remain embedded.

    You accute analysis is probably spot on as long as Merkel remains. But what happens after? What if Germany’s direction ain’t always so “benign?” The apparent German-Russian axis, between a modern enlightened economic powerhouse and a yet somewhat medieval Oriental despotism, should be greeted with a lot of skeptism about its ambitions. We’re lookin’ here at grafts.

    It’s difficult to imagine a more passive electorate, unless it’s in France, Italy, Spain, Sweden, Norway, Belgium, Netherlands, etc. I’m not even sure the Brits aren’t somnolent too. Only the Irish have shown any backbone, albeit only briefly. Methinks they don’t give a rip as long as they get their daily lollies. Fighting back against a rapacious regime is not exactly what any o’ ’em is known for, esp. if it’s a stealthy economically aggressive one. The dominants usually have to be well along the way to exterminating the population before one sees a concerted effort at resistence. Germany the state has proven itself to be dangerous when it finds no natural predators within view. Let’s keep Lord Ismay’s remarks in mind for everyone’s benefit: “NATO was created to keep the Americans in, the Germans down, and the Russians out.” Well, the Germans are up and the Russians are in. What now?

    I suggest France and Italy are going to be as happy about this eventually as, say, Texas and Florida are about the down sides of taking federal money for all manner of seemingly worthy projects: It’s a lot easier not to take the money to begin with than it is to get rid of the donors once they show up with their bushels of cash. The gifts come with strings that reinforce hegemony and servility and grind down sharp points of distinguishing difference. Europe is not, and cannot become, a nation within the meaning of the law.

  • Francis Turner

    I’m not at all sure that germany CAN bail out the Eurozone even if it wants to. Fundamentally the PIIGS plus France plus Belgium are all at or very close to total debt > GDP . Italy, let us recall owes EUR 1.9 Trillion, France owes rather more. Add it all up and you’re looking at 5 trillion or so, and unless a miracle occurs Eurozone growth rates will not be sufficient for it to be paid back. This is not a maybe yes maybe no thing, the sums are way too big. Unfortunately Germany doesn’t have a spare EUR 5 Trillion hanging around and the German electorate is almost certain to vote out any party that either permits the ECB to provide 5 Trillion because it will cause inflation (significant inflation) or suggests that Germany itself borrow the money to led 5 Trillion to the rest of the Eurozone.

    Oh and don’t forget there are a bunch of other issues. If the EU and/or Eurozone have to renegotiate treaty terms then, at the very least the Irish have to have a referendum to approve them. Chances of that passing in a timely fashion are (IMHO) pretty low. If the Irish get a referendum then the UK will have to have a referendum because all 3 main parties promised one if there were major changes to the EU. If they don’t then the next UK election may in fact see the UK Independence Party (UKIP) play a major kingmaking role after the next UK election and it is certain that their one non-negotiable condition will be a binding referendum on the EU. And the way things look now the UK will vote to leave the EU. Since the UK is the 2nd biggest net contributor to the EU budget (Germany being #1) this will further screw up EU and Eurozone finances because there will be a drastic cut in olive tree subsidies and other similar wealth transfer schemes to the south (and east come to think of it).

    Oh and right now I’d say it is possible that the big money in the UK (the city of London) is boradly neutral in the EU debate. The Eurocrats want to pass a Tobin tax to help pay off the various debts and that is pretty much guaranteed to make the City of London anti-EU.

    The EU has basically run out of other people’s money and is reaping the consequences.

  • JoetheHun

    Funny how all the former protectorates are crying for
    more money from the german sugardaddy, along the
    lines of Reichswirtschaftsminister Dr. Funks paneuropean economic plans of 1940…(hanged in Nuremberg)

  • Luke Lea

    The rise of China is more important than the fall of the Soviet Union. As for India, ech [yiddish shrug]

  • Corlyss

    “Dr. Funks paneuropean economic plans of 1940…(hanged in Nuremberg)”

    Massive irony, that. Well, no one ever accused the Germans of Greek-style inefficiencies.

    The British people have always been hostile to the EU as a governance scheme. That’s why Brown decided not to honor Labour’s promise to hold a referendum. I think the people in the individual countries have all been hostile to the idea. That merely underscores the essential anti-democratic nature of the EU. That alone is a paramount reason to scupper the whole idea.

  • dearieme

    The irony is that WWII is now long enough in the past that it might well have been possible to enlist democratic support for a more modesat scheme of widespread European co-operation. But the dictatorial EU, and particularly its bonkers eurozone scheme, may have put an end to that. Perhaps the whole daft enterprise will shrink back to its essential core i.e. Vichy France by other means.

  • LarryD

    Too keep the Club Med states in the EU will require not loans (which need to be paid back), but ongoing subsidies. Forever.

    I don think the German taxpayer will swallow that, nor even all of the hard working, financially provident states put together. There will be a split, whither or not anything called the EU remains afterward will remain to be seen. But, while the EU is much beloved of the European elites, the common citizen has no reason to love the autocratic rule of the elites that the EU establishes.

  • AlbertG

    I am shocked, absolutely shocked that Via Meadia is spreading the vicious rumour that Andrew Sullivan thinks about anything other than Sarah Palin’s reproductive organs.

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