Germany under pressure
Brussels and Washington both put pressure on Berlin. EU commissioner Rehn and US secretary of treasury Lev think Germany should step up to stabilize the Euro. The German government currently ignores the pleas, but it will have to deliver after the elections for the Bundestag in September.
When Georges Soros talks, the world listens. The famous investor said it’s either common european bonds or a German Euro exit. The message was duly propagated by online news mag SPON and other major media.
This worked nicely into the federal government’s scheming. Angela Merkel as well as her finance minister Wolfgang Schäuble know full well that european bonds are unpopular with their electorate. Riding on Soros’ support they can show off as the tough heroes doing what is necessary.
There are a number of less comfortable topics floating around that the media at large has chosen to ignore – although they are way more important than Soros’ pleas. Here’s three instances where Berlin got tutoring from politicians:
- Britain’s David Cameron urged to make the Euro zone a complete monetary unionm,including common bonds, in an interview with German daily Süddeutsche.
- US secretary of treasury Lev suggested Euro zone members running a trade surplus should boost domestic demand and slow down on austerity measures – a statement clearly targetting Germany, always raising the bar on exports.
- EU Monetary Affairs Commissioner Rehn says Germany could and should do “much more” to raise domestic demand. He suggests an opening of the service sector as well as a universal minimum wage.
As far as I am aware, these claims have not provoked any reactions from neither Merkel nor Schäuble. They don’t fit the conservative-liberal posse’s agenda, so they are being ignored.
That does not invalidate them – on the contrary, Cameron, Lew and Rehn have put up reminders for post election Berlin, adding to the IMF’s standing request for a greek hair cut.
After coming fall’s elections Berlin will have to drastically reposition its economic and financial policy, otherwise it will risk international isolation. Too bad that nobody dares bringing the topic up, not even the opposing parties…
The original post (in German) is here.