Germany’s New Axis
Just before the EU summit on the last weekend in August, German chancellor Merkel provided input on important decisions. She worked to establish Spanish minister of the economy De Guindos as the new head of the euro group. Paris has no say – honi soit qui mal y pense.
You have to savor it: at the same time the french government collapsed because one of its members dared criticising Merkel’s policy, the chancellor kicked Paris in the back. There’s no other way to consider what Merkel has come up with: former finance minister – and former Lehman Banker – De Guindos shall be the first full time head of the euro group.
Paris pushed for full time euro group leadership for years, and Berlin has always held back. Finally it agrees, but establishes a conservative Spaniard in the role.
De Guindos presided over debt explosion
The skyrocketing of national debt – due to Madrid having to cover banks – and the catastrophic unemployment levels do not count. The driving factor is Madrid reliably following Berlin’s guidance on austerity. Paris, which was reluctant to commit, is being cast aside, to the
benefit of a new Berlin-Madrid axis.
It was about time – the last trio Germany used to suppress Paris has run its course. The Netherlands and Finland, for a long time Berlin’s trusty allies, are weakening more and more.
Criticism of Berlin is considered lèse majesté – in Paris
Both Finland and the Netherlands are economically in dire straits, despite AAA labels and high spots in OECD’s competitiveness ratings. Also, they are a bit small to hold up against heavy weights France and Italy.
For a short time there was an expectation that Paris and Rome, supported by Germany’s social democrats, could push back Merkel’s austerity. There even was a much publicised meeting between german socialist Sigmar Gabriel and his french colleague Montebourg.
Hoewever after Montebourg’s sacking this perspective is gone. Criticism of Angela Merkel has been punished as lèse majesté in France, to help remind Europe who is in charge.
Joe Thorpe
13. September 2014 @ 11:08
Its does have a great deal of wiggle room to grow after it’s catastrophic implosion during the Eurozone Crisis don’t you agree? It also has a vast number of people clamouring for any vacancy at any meagre rate whatsoever would you agree? & would you also agree that these are major building blocks towards growth, ie rising from rock bottom with an ocean of available cheap labour? Just asking 🙂
Peter Nemschak
13. September 2014 @ 12:08
Would you agree that the south of Europe has been structurally weak since decades? The cheap money which came with the Euro has not improved this weakness. The migration of Spaniards to prosperous regions of Europe is the natural consequence of a single currency.The same mobility is typical for the US, where people follow jobs. The expectation by French and Italian politicians that the Euro will weaken Germany has not come true. It is rather the opposite. Either the south adjusts towards the north or the Euro will be history soon.
Peter Nemschak
13. September 2014 @ 10:09
Although it contradicts ebo’s story it should be mentioned thar Spain’s economy grew at a pace in the first half of 2014 not reached since 2007 according to SPON from July 30th. It appears that reality is not quite in line with ideology.
ebo
13. September 2014 @ 11:04
How much GDP did Spain lose during the crisis? How many people lost their jobs? How many Spaniards left their country in search for a better place to live and work? – Same questions apply for Ireland, by the way
Peter Nemschak
13. September 2014 @ 11:15
The issue is whether Spain fared relatively better or worse compared to the other crisis countries.