IMMEDIATE RELEASE 4 June 2014
Today’s Events in Historical Perspective
America’s Longest-Running Column, Founded 1932
By Douglas Cohn and Eleanor Clift
WASHINGTON – A Martian landing for the first time in Europe and surveying the scene could be forgiven for assuming that the wealthiest, most productive member of the European Union today, which is Germany hands down, must have won World War II. The truth of course as every school child knows, the Nazis lost the war, and the German people won the peace.
Germany is the financial master of Europe, which grates upon the British, who have all the trappings of empire without the empire. Prime Minister David Cameron has promised the British people that after he is reelected, there will be a vote to determine whether or not Britain stays in the EU. They’ve always been ambivalent, refusing to join the common currency of the Euro and keeping the British pound.
The global recession battered the EU, and exposed the essential flaw in its creation. Member countries control their fiscal policy, i.e. taxation and spending, but monetary policy, the ability to print money and set base interest rates, is in the hands of the European Central Bank in Frankfurt, Germany. When member nations like Greece and Portugal bestow wonderful benefits on their people, keep taxes low, and end up with a big deficit, it’s up to the EU, principally Germany, to bail them out – but with strings attached.
Those strings that require cutbacks in government benefits and increased taxes create resentment in the affected countries. Years of enforced austerity have contributed to the rise of right-wing populist parties that are anti-immigrant and anti-elitist, much like the Tea Party that took root in the U.S. beginning in 2009.
The result is ongoing concern about the future of the EU, and whether it can remain intact over the long term, buffeted by the winds of change. The concept of a united Europe goes way back with none other than Winston Churchill favoring the idea. The EU today has 28 member countries, and to the extent that it works, it’s because the dominant countries run the economics and the politics, with Germany in the lead position.
The hallmarks of the EU are its common currency, the Euro, which holds up well against the dollar, the absence of tariffs between the trading countries, which has meant a financial windfall for Germany, and lastly open borders. Anyone who drives in Europe marvels at the ease of crossing borders from one country to another. There are all these check points that go unmanned, remnants of another time that very few lament.
As long as Germany remains a benevolent overlord in the EU structure, willing to bolster the shaky finances of other member countries, why would any of these countries want to leave the EU? Let’s do a thought experiment. The real question to ask is what would happen to the EU if Germany left? Europe would break apart, conjuring up images from the bad old past, enough to make it clear why the EU is there, to help keep the longest sustained peace Europe has ever known.
The good news is that Germany shows no inclination or desire to bail out of the EU, and the only reason it’s working is because Germany is there keeping it afloat.
© 2014 U.S. News Syndicate, Inc.
Distributed by U.S. News Syndicate, Inc.
END WASHINGTON MERRY-GO-ROUND