I just read this piece by Jeff Carter about how Germany is doing all the productive work for the entire EU. This bit in particular:
If I am the Germans I feel like the weightlifter on the bench press that just had a couple of manhole covers added to the bar. How can you have a European Union, when only one country in Europe is productive? Socialism is like that. They direct and regulate, you produce.
Which made me say to myself the phrase “Germany shrugs”. Which I then googled, and I got to this by Andrew Lawford:
Some time ago, I read an interesting article that outlined the fact that a Greek exit from the Euro would compound its problems in that it would have a new currency that would devalue markedly against the Euro, but would have all its debt still denominated in Euro. Obviously the situation would be resolved either by passing a law that redenominated all Greek debt into the new currency, or simply by defaulting on the payments of Euro debt. The end result for investors would be much the same.
The interesting thing to consider, though, is if Germany were to quit the Euro. The rule that applies to Greece would presumably apply to Germany too: a new currency would be introduced, but the nation’s debt would still be denominated in Euro. In this case, however, the new currency would presumably appreciate massively against the Euro, thus reducing Germany’s debt burden as measured in its new currency. This begs the question: would Germany redenominate all its Euro debt into its new currency? Certainly this is what investors expect as they push bund yields to record lows during the current “flight to quality”, but upon what basis can such a redenomination be expected?
And he ends by saying:
The Germans may simply shrug.
I am surprised that “Germany shrugs” (most of the google hits had an “off” bolted on to the end followed by whatever it was that Germany was shrugging off) is not a more common phrase. It certainly will be, Real Soon Now. Trouble is, the whole world, including us here, have been wondering for ages when “Germany”, by which I mean the people of Germany rather than their EU District Commissioner rulers, will finally demand that their leaders stop leading them into an economic morass and put their economic interests first.
I’m now inclined to think that I got it right at the end of this, where I said that the EU will only collapse when it has entirely run out of all its money and all its power, and all of it will then collapse.
The international “liberal” elite (Cameron, Blair, the Economist magazine…) insist that the debts of every Eurozone government are the debts of “Europe” as a collective whole.
In practice this means that the Welfare State spending of the every Euro Zone government (not “just” German government Welfare State spending) is to be paid for by Germans engaged in manufacturing industry (Frankfurt being just as much a credit bubble as London and New York are).
This is not POSSIBLE. The Germans simply can not afford this.
By insisting upon this the international “liberal” elite will NOT save the Eurozone Welfare States.
They would destroy Germany – destroy German manufacturing industry, the Geman economy.
In the longer run the German Welfare State may destroy Germany on its own.
But to make the German taxpayers responsble for other Welfare States (under the “debts of one are the debts of all” doctrine) would be to take a sledge hammer to the German economy. To the people in Germany engaged in productive activity – those family owned manufacturing companies.
By insisting on this “all debts are the debts of everyone” doctrine, the wrong headedness (and, yes, the WICKEDNESS) of the international “liberal” elite is almost beyond comprehension.
I find the behaviour of certain German leaders to be completely incomprehensible. That these individuals would be prepared to concede authority over their own economy to further the goals of EU appratchiks is insane. Do they not realise that once these people have their hands on levers of economic power that Germany would be looted in the effort to keep European fantasies alive. The effects on the average hardworking German are not going to be hard to establish. This seems like a good way to set Europe ablaze once more. Germany should withdraw from the Euro as a first step to ensuring the efforts of rebuilding after 1945 are not squandered.
I find the behaviour of certain German leaders to be completely incomprehensible. That these individuals would be prepared to concede authority over their own economy to further the goals of EU appratchiks is insane. Do they not realise that once these people have their hands on levers of economic power that Germany would be looted in the effort to keep European fantasies alive. The effects on the average hardworking German are not going to be hard to establish. This seems like a good way to set Europe ablaze once more. Germany should withdraw from the Euro as a first step to ensuring the efforts of rebuilding after 1945 are not squandered.
The trouble with Jeff Carter, Andrew Lawford, and anglophones in general is that when you look at the forest, you see only the biggest tree.
I proposed a bet to our friend llamas about who is going to leave the eurozone first. He did not reply, probably because that comment tread was running out. Here it is:
http://www.samizdata.net/blog/archives/2012/06/samizdata_quote_1014.html#255565
Basically my position is that the first country to quit will be a country that no anglophone expects to be the first to quit: not any country that has already received a bailout, and not Germany.
If llamas or Brian or anybody else is interested, the bet is still on.
It would have been catchier to have written ‘Angela Shrugs’.
If Europe does become a 2-speed economy, will the Eurozone be labelled Central Europe?
The Effete are in for a rude shock when Uncle Otto can no longer finance their indulgences.
I would be interested to know how many German fans of Ayn Rand there are.
“It would have been catchier to have written ‘Angela Shrugs’.”
Cute point, Nuke, but unfortunately Angela most definitely does not want to shrug. If it happens at all it will be because the German people have forced her to do so.
The German elite (political, acacdemic, cultural) are indeed hard to understand.
To some extent that is true of any elite – but it is extreme in the German case.
For example, the British elite betrayed what they believed was a failing country.
People like “Ken” Clarke thought that Britain was finished – so becomming the province of a European Empire was the least worst option.
But the German elite understand that Germany is a success – yet (utterly cold bloodedly) seek to destroy that success.
The desire for “polticial union” can only come at the expense of the (Blair, Cameron, Economist magazine…..) demand that the “debts of every member government be the debts of all governments” which would lead to the UTTER RUIN of Germany.
But then I do not pretend to understand the German people (let alone the German elite).
A people who are obsessed with C02 emissions and yet demand that all nuclear power stations are CLOSED DOWN (????????).
And a nation obsessed with hard work and building family business enterprises.
And yet where 90% of the population want Comrade Barack Obama relected.
I do not understand the Germans.
The contradictions are too extreme.
I am reminded that the Germans were (undoubtly) the most cultured people in Europe – and yet favoured the extermination of the Jews (who were central to German music and culture generally).
To love culture and yet to wish to murder the people who had helped build that culture?
It just makes no sense – none at all.
“Paul it is unfair to hit the Germans with that – they have changed”.
Have they?
Check the majority German opinion on Israel.
Six million dead Jews are not enough.
Another four million Jews must go as well.
Why?
Why?
WHY?
It just makes no sense – none.
So, the unelected Mario Draghi moves ever closer to achieving the aims of his omnipresent employers, Goldman Sachs. Just as his counterpart, Ben Bernanke, has presided over a $24 trillion bailout of Wall Street, so Super Mario Draghi has displayed similar priorities in his Galaxy of self-interest.
To the young, he says, “get lost and die”. To the bankers whom he works for, he says, “here, have another trillion of welfare without any conditions.” The man is, like Ben and Mervyn, a stinking crook.
Like that other unelected parasite, Christine Lagarde, Draghi’s lavish lifestyle is financed by the taxpayer. Indeed, Lagarde has all her luxuries paid for by taxpayers, but pays no taxes herself, because like all diplomats and international bureaucrats, she is a dilletante who pays no taxes.
All of them, tellingly, Baby Boomers, the generation that got all the cream and which inflates house prices because they are too lazy to do any real work. Retirement looms for the feckless, greedy Boomers, so they make the young into Soylent Green to save their own skins.
When Generation X and Y get their revenge, it won’t be pretty, but it will be thoroughly deserved.
In the age of video-conferencing and email, there is no need for these summits, indeed no need for preening work-shy leeches like perma-tan Lagarde. These expensive which are in truth just an excuse for the political and banking elites to gorge themselves on taxpayer funded food, drink, and parties. Technology made diplomats and ambassadors obsolete years ago, yet still they mill around at our expense. Is there really any need for embassies other than to give cushy jobs to party donors?
I’m sure its just a total coincidence that Merkel has demanded cuts in Greece to everything except those lucrative (for Germany) toy contracts. Much like the farm subsidy sponging US politicians and the Medicare scooter brigade, its a case of do as I say, not as I do.
Perhaps Germany shall awake.
Oops.
It depends on WHICH GERMANY awakes Mike.
If it is the Germany of the classical liberal tradition (oh yes there is one in Germany) then this would be GOOD.
For example, the German Chancellor just made a speech where she pointed out it would be unconstitutional for Germany to take on the debts of other governments and banks based in other countries.
QUITE CORRECT.
Therefore the Chancellor should not even go to the comming E.U. meeting – as that is all this E.U. meeting is about “fiscal and monetary union” (unconstittuional under the “Basic Law” of the Federal Republic of Germany).
However, the Chancellor of Germany has also said (and said repeatedly) that she is IN FAVOUR of “fiscal and monetary union” (i.e. shareing the debts).
This is one of the blatent contradicitions that I do not understand.
Also German taxpayers may ALREADY be on the hook for the debts of overseas governments and banks (governments and banks are, as everyone knows by now, joined at the hip – the financial system is utterly corrupt).
See details of this over at the Cobden Centre blog.
If this proves to be true and the Chancellor adds to the debt burden (by refusing to reject the INSANITY of “fiscal and monetary union”) then the “other Germany” may awake.
Nationalist and Racialist Germany – denouncing the betrayal.
And it would be very hard to argue against them.
To save the Germany of LAW (of Constitutional Liberalism) then the dream (the insane dream) of “European unity” must be rejected.
Spelling also matters. A few years ago, an Australian leader said (or so we thought he had said!), “The tax cuts are LAW!” Silly us!!! It turns out he’d meant LORE! As in folklore, and fantasy. That’ll teach us!