Germany’s Historical Euro Responsibility

January 25, 2012 Print PDF
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J. D. Bindenagel is a former U.S. Ambassador and is currently the Vice President at DePaul University in Chicago. This Op-Ed originally appeared in Süddeutsche Zeitung on January 12, 2012.

 

Click here to read the original German version from Süddeutsche Zeitung

The Eurocrisis is reminiscent of two European conflagrations lasting three decades, the Thirty Years War (1618-1648) and the two twentieth century World Wars (1914-1945)[i] Those wars centered on Germany and ravaged Europe and the world. The current Eurocrisis centers on Germany and is an existential crisis about European Union political integration. Chancellor Angela Merkel explained to her Party Congress in Leipzig, without exaggeration, that “if the euro falls, Europe falls.” She described the challenge as “the most difficult since the Second World War.” That is no exaggeration.

The Treaty of Westphalia ended a devastating territorial and religious armed conflict with agreement establishing the principle of “Sanctity of Sovereignty” which governed international relations for the next four centuries.  After the Second World War ended, the United Nations was formed and the U.N. Universal Declaration on Human Rights has guided international relations. Europe now faces the Eurocrisis, and Germans have surprisingly strong support from Polish Foreign Minister Radek Sikorski, who has likened the Eurocrisis to war.

In his Berlin speech on November 28, 2011 he recalled an interview he had with the then-chairman of the Republican Bank of Croatia in Yugoslavia. The banker told him in the beginning of the 1990’s that the parliament of Serbia had just voted to print unauthorized amounts of the common currency, Dinars. The banker said to Sikorski: “This is the end of Yugoslavia.” As the Dinar zone collapsed so did Yugoslavia.” The horrendous fate of Yugoslavia, Sikorski continued, reminds us that money, as well as being a technical device, a ‘means of exchange’, symbolizes unity – or disunity.”[ii]

Sikorski also quoted German philosopher Jürgen Habermas: “If the European project fails, then there is the question of how long it will take to reach the status quo again. Remember the German Revolution of 1848: When it failed, it took us 100 years to regain the same level of democracy as before.’” Sikorski then challenged Chancellor Merkel: “I fear German power less than I am beginning to fear German inactivity. You have become Europe’s indispensable nation. You may not fail to lead. Not dominate, but to lead in reform.”[iii]

Whether the EU will be successful in the long run depends on European political leadership has the political will to achieve political union. Germany needs to lead. Historically, failure has been the rule. Pierre Werner’s 1970 monetary union plan to create a European Economic and Monetary Union failed for lack of political will.

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1 Comment

  1. Christian Deubner says:
    January 22, 2012 at 12:27 pm

    Yes, unfortunately too many eyes are turned to Germany, including those of Ambassador Bindenagel. And not enough eyes are turned towards the private creditors of overdebted Euro-States, engaged in a battle of blackmail with the taxpayers of Germany and other AAA-Euro-states, over who will assume the losses which the devaluation of the respective states’ sovereign bonds will bring about. Private creditors are intent to force taxpayers once and for all into covering all their present and future losses on such sovereign bonds and they make everybody the (anglo-saxon) world over understand that the one pivotal EU government which still refuses this blackmail, namely Germany, does not assume its responsibility “for Europe”.
    Why would the United States’ Ambassador Bindenagel want to create a fiscal-economic union with binding obligations on Euro-States’ fiscal policy, plus a bail-out system for overdebted euro-states, as condition for a successful Euro, when neither the US- nor the Canadian dollar or for that matter the Swiss Frank have something like this ?
    This absence of federal fiscal policy dominance vis-a-vis the states, and of a federal bail-out guarantee, is the most important cause of a situation where the US states have much lower debt ratio differentials among themselves than the euro-states, motivated by ratings and yield differentials on the financial market, which are high enough to push them to borrowing discipline, but not so high as to render existing debt unsustainable.
    It is this kind of situation which the Euro zone should strive for as a long-run solution, and it is worth political crisis and conflict, plus substantial financial efforts, and the attendant resentments against a Germany which pushes for it, if it could be realized at the end of the present sovereign debt crisis. Because we hope to live with the Euro and a sustainable fiscal coordination system for many decades or longer, whereas the present crisis will be forgotten in a very few years.

    Best regards, C.D.

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