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http://www.german-foreign-policy.com/en/fulltext/56307
The End of Sovereignty (I)
2009/12/14
LONDON/BERLIN/ATHENS (Own report) - German government advisors are insisting on concerted efforts to politically neutralize British EU-skeptics. As explained in a recent paper published by the German Institute for International and Security Affairs (SWP), the British Conservatives' attitude will have a "decisive influence on helping to set the EU's future radius of action," because the ambitious possibilities in EU foreign policy making, opened through the Lisbon Treaty's coming into force, will depend, to a certain extent, on London's cooperation. It is expected that the elections scheduled in May will bring a government change - from Labor to Conservative. The chairman of the conservatives, a flexible "Euro-pragmatist," is taking a Euro-skeptic position because of the balance of forces within his party, according to the authors of the SWP paper, but he can be brought to oppose his party's EU-critical wing. The main reason for British EU-skepticism is the fear of the loss of the country's sovereignty. This is not unjustified, as can be seen in the controversy around Greece's national debt. The German chancellor is threatening Athens that the EU needs to consider whether it should impose an austerity budget on Greece - if necessary, even against the will of the elected parliament in Athens.
Globally Designed
According to a recent paper published by the German Institute for International and Security Affairs (SWP), London should be more firmly integrated into EU foreign policy, if for no other reason, than for Britain's political economic significance. The authors explain that "Great Britain, the second largest economic realm in the EU, with London being a hub of international finances" could definitely not be ignored "because of its globally designed foreign and security policy."[1] Because of the United Kingdom's well known EU-skepticism, continental European countries have paid "little attention" to London. That was a mistake. It would "behoove" EU members to insist on the British government's firm engagement for Brussels after the Lisbon Treaty takes effect. Attempts should be made to gain influence on the Conservatives, since they will probably win parliamentary elections in the spring.
EU-Pragmatism
Because of the growing popularity of the EU-critical forces, the SWP describes the current development within the Conservative Party as "somber." "The new generation of the Conservative parliamentarians will further strengthen the EU-skeptical camp." Therefore it will "sooner or later" be necessary to seek a closer integration into the EU. To achieve cooperation with the current party leader, David Cameron, is not out of the question. Up to now, his EU-skeptical statements have "mainly been out of consideration of internal party power struggles," whereas he, himself, tends more toward "conservative EU-pragmatism." This has become clear already through his backing off from holding a referendum on the Lisbon Treaty. The SWP authors suggest that on the basis of this sort of "conservative EU-pragmatism" Cameron could "use his party leadership position, to place the [EU-skeptical - gfp] rank and file under pressure." Of course Cameron's previous "failure to settle accounts with the hard-liners of his party sends a signal" even "to the dyed-in-wool optimists that there is still a lot of work to be done." But it is worth the effort to attempt to continue to marginalize the EU-skeptics.
Constructive Potential
According to the SWP document, various extraneous circumstances are advantageous to this project. The paper points out that the possibilities of the British Conservatives influencing the European Parliament have been "weakened" since they broke off from the European People's Party, forming a new group ("European Conservatives and Reformists") this year. The authors are also of the opinion that the US government, which is so important to Great Britain, is, under the Obama administration, increasingly seeing "Britain's significance within the EU as a constructive rather than a conflict potential." Therefore the conditions are not disadvantageous for taking action against the EU-skeptics. One cannot avoid the task of forcing the EU-critical circles into retreat, because even if Labor - against all expectations - does remain in government, it can "not be excluded that the national viewpoint, will not come to the fore" - meaning the EU-skeptical tendency. That is why, in any case, an "open debate" with and in Great Britain around the extension of EU activities must be initiated. The SWP authors' suggestions concerning how this should be done remain non-committal and rather ambiguous.
Austerity Policy
The main reason for British EU-skepticism remains the fear that in the future the EU could usurp the sovereignty of the nation-states and blatantly rule the member states, even Great Britain from abroad, bypassing the elected national parliaments. That this fear is justifiable can be seen in the recent developments in Greece. Greece's national debt has reached about 120 percent of its BNP, which is twice what is allowed under the EU's Stability and Growth Pact. Several EU states, including Germany, are exerting strong pressure on Athens to reduce the level of debts at all costs. Whether this is a justified demand, is a matter of dispute. The Prime Minister of Luxemburg, Jean-Claude Juncker considers "the perspective being painted by some, as if Greece is on the brink of national bankruptcy, is at variance with my observations."[2] Axel Weber, President of the German Federal Bank, on the other hand, demands that Athens impose a rigid austerity policy, that would also drastically cut salaries.[3]
Still Independent
The German chancellor is demanding that Brussels should be granted new rights of intervention into central areas of national sovereignty, for such cases. If, for example, an elected parliament refuses to enact substantial cuts in wages, Brussels must have the power to order these cuts against their will. "National parliaments do not like to have things imposed," observes Angela Merkel and demands "we have to discuss this type of problem."[4] The extent of this sort of intervention, particularly affecting the smaller EU nations, placing them under de facto direct control of the EU hegemonic powers, in particular Germany, has been anticipated by the Greek Prime Minister Giorgos Papandreou. According to Papandreou, the country's sovereignty is under threat for the first time since 1974, through the external pressure on Athens to reduce its level of debts at all costs. In 1974 the military dictatorship in Greece was replaced by a parliamentary democracy. Papandreou added that Athens itself must institute the reductions demanded by Berlin and others. This is "the only way to insure that Greece does not lose its independence."[5]
[1] Martin Kremer, Roderick Parkes: Großbritannien: "Being nice to a sceptic?" SWP-Aktuell 66, Dezember 2009
[2] EU macht Druck auf Griechenland; Handelsblatt 10.12.2009
[3] Bundesbank fordert Griechenland zum Sparen auf; Frankfurter Allgemeine Zeitung 10.12.2009
[4] EU verweigert Griechenland Soforthilfe; Spiegel Online 10.12.2009
[5] Bundesbank fordert Griechenland zum Sparen auf; Frankfurter Allgemeine Zeitung 10.12.2009
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http://www.german-foreign-policy.com/en/fulltext/56318
The End of Sovereignty (II)
2010/02/04
ATHENS/BERLIN (Own report) - The European Union has submitted to German demands, imposing unprecedented cuts in the Greek national budget, resulting in a large loss of jobs, cuts in wages and high increases in taxes. This was caused by Berlin's apprehension that Greece's budget deficit could lead to a serious crisis and burden the Euro. Business circles are even speculating about an end to the European monetary union. The Greek government must now report to Brussels every two - three months and show evidence it has made drastic cuts in its state expenditures. Berlin rejects financial aid from the International Monetary Fund (IMF) that it often imposes on non-European countries. This aid would be linked to conditions on the European Central Bank in Frankfurt. The demand that Athens take drastic austerity measures does not stop Berlin from pressuring Greece to buy expensive warplanes. In Athens, the German foreign minister insisted, at the beginning of the week, that they acquire Eurofighter jets (made in Halbergmoos, Germany). Berlin's austerity dictate is very controversial. A Nobel Prize laureate in economics accuses the German government of "deficit fetishism" and predicts that the measures will peter out with no effect.
The Dictate
The European Union imposed unprecedented austerity measures on Greece's national budget. As the EU Commission announced in Brussels yesterday, by 2012, Athens must reduce its budgetary deficit from 12.7% of its gross domestic product (GDP) to 2.8%. The "Euro Stability Pact" adopted in 1997 at the insistence of Germany, provides for a maximum deficit of 3%. Several EU countries are in violation, including Germany, whose deficit could reach 6% this year. Greece will now become the first country to be forced to reduce its national budget. Its government must report to Brussels every two - three months with evidence that the dictated austerity measures are being applied. These include especially the scaling back of government employment, cutting wages and raising taxes - all excessively. The U.S.-based financial research company High Frequency Economics predicts a possible rise in Greece's jobless rate to 16%, from its current 9.3%.[1]
The Export Steamroller
In fact the Greek explosion in debts is due not only to the global economic crisis, but is also an expression of a continuous shift in economic relations. According to articles in the business press, there has been the development of "significant economic dichotomies" between the countries in the Euro Zone over the past few years. Whereas in the southern European countries, particularly in Portugal, Italy, Greece and Spain - also designated as the "PIGS countries" - larger portions of corporate revenues have been spent on salary raises, Germany had been practicing a policy of rigorous wage depression to create advantages for its companies.[2] One commentary explains that because the German "army of wage labor accepts a low-level growth in wages, the export steamroller is again bowling over its European rivals."[3] Before the Euro was introduced, it had been possible to resist the deflation of domestic currency. But "in a common monetary realm there is no defense against sinking unit labor costs and advancements in productivity." This is why the current accounts of the "PIGS countries" have slipped "deep in the red."[4] Because Germany, with its export revenues, can still offset the lack of defense possibilities in other economic sectors, it is "the winner and beneficiary of the common monetary system."[5]
The Euro
But this is exactly why some experts judge the Euro to be endangered. The economic differences within the Euro zone countries foster divergence in their economic political interests. This not only leads to serious contradictions between Germany and France (german-foreign-policy.com reported [6]), but the entire monetary union "is at risk of becoming ungovernable and the Euro endangered" warns a monetary expert at the University of Bonn.[7] "A common monetary system cannot function, if the economic chasm between the countries forced into the system becomes too wide" writes the German business press,[8] while proposing that, to save the Euro, which is so beneficial to Germany, the "PIGS countries" should be ordered to make dramatic cuts in their government spending, as the EU Commission is now imposing on Greece. The current dictate of the EU Commission is, as a matter of fact, a submission to the demands of the German Bundesbank and chancellor, who had insisted on these sorts of measures back in December 2009.[9]
The Armament Industry
It is noteworthy that Berlin is opposing financial aid for Athens in spite of the dramatic austerity measures, while, at the same time, demanding that Greece buys expensive German armament. Deliberations for solving the Greek financial problems through credits from the International Monetary Fund (IMF) were abruptly rejected by the German government. An IMF credit is linked to conditions and would entail restrictions on the work of the European Central Bank in Frankfort. This is something the German government usually expects from third countries but does not itself want to bear. At the same time, Berlin is pushing Athens to buy Eurofighters that are produced by an arms corporation with headquarters in Hallbergmoos (Bavaria). German efforts to sell the expensive fighter planes to customers abroad and increase the profits of the core European armament industry led to heavy controversy last year (german-foreign-policy.com reported [10]). During his visit to Athens, at the beginning of the week, the German foreign minister demanded that Greece opt for the Eurofighter in spite of its financial difficulties.[11]
Not only Greece
Business circles are warning that sanctions against Greece could serve as a precedent for similar measures against for example Portugal and Spain. "The peripheral countries of the Euro zone, such as Greece, Italy, Portugal or Spain, have large problems with budget deficits, but also with their competitiveness," a prominent economist recently declared. Indeed, Berlin's low wage policy affects not only Greece.[12] In the meantime Portugal was also forced to introduce austerity measures.
Fetishists
The laureate of the 2001 Nobel Prize in economics, Joseph Stiglitz, is strongly criticizing the austerity dictate being imposed by Berlin. Berlin and Brussels' imposition of these measures, in complete disregard of the intentions of the democratically elected government in Athens, could - according to Stiglitz - considerably retard growth, reduce tax revenues and raise the budget deficit. The economist explains that similar programs have not worked in East Asia and threaten to also fail in Ireland. "There are some people in the EU who believe in deficit fetishism and get a certain comfort from talking tough," concludes Stiglitz, obviously alluding to the EU hegemonic power - Germany.[13]
[1] Greece's Austerity Sparks a Warning; The Wall Street Journal 02.02.2010
[2] Euroland abgebrannt; WirtschaftsWoche 18.01.2010
[3] Der wahre Teuro; WirtschaftsWoche 18.01.2010
[4] Euroland abgebrannt; WirtschaftsWoche 18.01.2010
[5] Der wahre Teuro; WirtschaftsWoche 18.01.2010
[6] see also Zweite Liga and In the Advantage
[7] Euroland abgebrannt; WirtschaftsWoche 18.01.2010
[8] Der wahre Teuro; WirtschaftsWoche 18.01.2010
[9] see also The End of Sovereignty
[10] see also Die Eurofighter-Mafia
[11] Westerwelle vertraut Griechenland; Deutsche Welle 02.02.2010
[12] EU übernimmt Kontrolle über Griechenlands Finanzen; Spiegel Online 03.02.2010
[13] Greece's Austerity Sparks a Warning; The Wall Street Journal 02.02.2010
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http://www.german-foreign-policy.com/en/fulltext/56325
The End of Sovereignty (III)
2010/03/02
ATHENS/BERLIN (Own report) - In light of Greece's financial crisis, government advisors in Berlin are considering new limitations to EU member nations' sovereignty. Because of difficulties in bringing the situation in Greece under control, the German Institute for International and Security Affairs (SWP) wrote in a recent analysis that it should be discussed "whether and how it could be possible to take drastic action more precociously on national fiscal policies". Yesterday, the government in Athens consented to Brussels' new reductions in pay and more tax increases, but it is uncertain whether these drastic measures will suffice to keep Germany from having to provide Greece with financial aid. Berlin has begun weighing the option of letting that country go bankrupt, the consequences being probably "just a bit more serious" than those of last year's insolvency of General Motors, writes the SWP. In Greece, since some time, protests have been raised against German economic dominance. The media is warning that "the Germans could take absolute control" of the Greek national budget.
German Week: Fateful Week
In Athens significant decisions are being expected in the next few days concerning the handling of the financial crisis. Because of two high level meetings this week between the Greek and German governments, the Greek media has been speaking of a "German week" and even of a "fateful week".[1] Just last Friday, the director of the Deutsche Bank, Josef Ackermann, was in Athens to discuss the crisis with Greek Prime Minister Giorgos Papandreou. The Deutsche Bank had already given the Greek government advice on the national debt in January.[2] Next Friday, Prime Minister Papandreou will be visiting the German chancellor in Berlin. The meeting with the German chancellor is considered highly significant.
An Example
The massive German pressure on Athens is not so much because German banks are at risk. At the end of September 2009, Greece owes German credit institutions US $43 billion. Experts consider the threat of this loss, due to national bankruptcy, to be bearable. This is only about 1.2 percent of the US $3.5 trillion in total German foreign credits.[3] Spain, for example, would constitute a much larger problem should it suffer financial bankruptcy. Spain owes German banks US $240 billion. Spain is the third candidate, after Greece and Portugal, for a dictate from Brussels to lower its budget deficits. Berlin's insistence, with the support of the EU, on Athens taking drastic austerity measures is supposed to serve as an example for Madrid to take similar steps and prevent Spanish debts from becoming larger (and thereby becoming a risk for German credits).
Low Wage Policy
But above all, the German/EU reduction dictate is supposed to solve a basic problem. Over the past few years, Germany has obtained significant advantages over its European rivals with its intransigent low wage policy allowing a drastic increase in exports - also at the expense of the southern European countries, whose foreign trade deficit with Germany has significantly risen. (german-foreign-policy.com reported.[4]) Greece's foreign trade deficit toward Germany, for example, rose from 5.3 billion Euros in 2006 to more than 6.3 billion Euros in 2008. To stop the spiral of Greek debts, "the glaring dichotomy in competitiveness" within the Eurozone must be counteracted, writes the SWP in Berlin. The imposition of a German model low wage policy, as is now being applied, will not be sufficient, predicts the SWP.[5] But the Berlin government's advisors do not agree on which supplementary measures should be undertaken.
National Bankruptcy
One recent proposal is to stimulate Greece's economy - and possibly also the other economies of the "weak nations" - with enhanced financial aid to Athens or supplementary imports. This may possibly have to be done with further restrictions to national sovereignty of the respective countries. The SWP demands that "it be discussed whether and how it could be possible to take drastic action more precociously on national fiscal policies."[6] Some of the government advisors are opposed to such a procedure. Some say that a rescue package for Greece, would, on a "medium and long-term" basis, lead to a weakening of the Euro, which must be prevented, under all circumstances. If Athens goes bankrupt, then it is sure that "the lesson will be brought home, that skyrocketing deficits in the Euro zone, cannot be fought by minting money. This will even strengthen the foreign value of the Euro."[7] Greece's bankruptcy would have "consequences probably just a bit more serious than, for example, the insolvency of the world's largest car manufacturer, General Motors in 2009." Preventing bankruptcy could prove to be the "more dangerous alternative."
Under Control
Athens can neither ignore the debate in Berlin about Greece's future nor the current German media campaign against Greece. Germany is not only the strongest EU power; it is also Greece's largest commodity supplier, as well as one of its largest foreign investors. There have been recurring protests in the Greek population against German domination, especially since Nazi terror in Greece has not been forgotten. When the German Telekom sought to buy into the Greek OTE Telecommunications Company in 2008, there was a strong strike wave, because the employees feared measures similar to those being now imposed, under German pressure, throughout Greece - loss of employment and cuts in wages. OTE, one of the largest enterprises in the country, is now 30 percent German owned.[8] Also because of the current Deutsche Bank's "counseling activities" with the government in Athens, the Greek media is warning of an increase of German domination and, above all, of a foreseeable "absolute German control over decisions and plans of the Greek Ministry of Finance."[9] This sort of control would be nothing more than the sequel to the vast limitations in national sovereignty that the EU, under Berlin's insistence, has now imposed on Greece in financial questions. (german-foreign-policy.com reported.[10])
[1] Prinzip Hoffnung; Der Tagesspiegel 01.03.2010
[2] Ackermann berät griechische Regierung; faz.net 26.01.2010
[3] Heribert Dieter: Die internationalen Finanzmärkte stellen die Eurozone auf die Probe; SWP-Aktuell 19, Februar 2010
[4] see also The End of Sovereignty (II) and Vor dem Sturm
[5], [6] Daniela Schwarzer: Griechenland enthüllt Schwäche der EWU; SWP-Aktuell 18, Februar 2010
[7] Heribert Dieter: Die internationalen Finanzmärkte stellen die Eurozone auf die Probe; SWP-Aktuell 19, Februar 2010
[8] see also Colonialist
[9] Prinzip Hoffnung; Der Tagesspiegel 01.03.2010
[10] see also The End of Sovereignty
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end, sovereignty, The, 外交政策, 德国, end, sovereignty, The, 外交政策, 德国, end, sovereignty, The, 外交政策, 德国
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