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Posted by
Olog-hai
on Thu Mar 21 15:09:07 2013, in response to EUEUEUEUEU Olog, posted by RockParkMan on Sat Nov 12 14:58:17 2011.
fiogf49gjkf0d So saith the New York Times.
Germany Calls the ShotsBy RISTO E.J. PENTTILA
Published: March 21, 2013THE crisis in Cyprus has taken a nasty turn, but it will not wreck the euro. Chancellor Angela Merkel will simply not allow it to happen. For Germany, the euro is the goose that lays golden eggs. It has allowed Germany to accumulate more than €1 trillion in trade surplus with other EU countries in a little more than a decade. Germany will not let the golden goose die.
The European sovereign debt crisis has fundamentally changed Europe’s geopolitical map. Instead of Europe being divided into West and East as it was during the Cold War, the Continent has become divided into a relatively prosperous North and a chaotic South. Instead of Europe being led by France and Germany with Britain playing a balancing act, leadership has fallen squarely on Germany’s shoulders. It is no longer about a more European Germany. It is about more German Europe.
Germany is calling the shots when it comes to the future governance of the eurozone. It is also calling the shots with regard to the Cypriot problem. If Cyprus can be guided out of the eurozone without endangering the credibility of the euro, Merkel will gladly make an example of the small island nation. If she thinks that a Cypriot exit will damage the euro’s reputation, she will not let it happen. The euro is simply too valuable for Germany to be risked.
Two economists, Jorge Braga de Macedo and Urho Lempinen, have shown that between 1999 and 2011 Germany accrued a cumulative trade surplus with the rest of the European Union of more than €1 trillion. Since the eurozone makes up about 75 percent of the European Union, the German trade surplus with the rest of the eurozone was about €750 billion during this time period. This was by far the biggest trade surplus within the eurozone. (Holland’s figures are even more impressive but they are explained by transit through its huge ports.)
There are two conclusions to be drawn. First, Germany is more dependent on the European market than it is on the rest of the world. Second, Germany can compete with other members of the eurozone better than it can compete with the rest of the world. One reason for this is the fixed exchange rate within the eurozone. As long as Germany can keep its own costs down, it is able to export to the rest of Europe more easily than to the rest of the world. This is about good housekeeping but it is also about geopolitics.
Geopolitics is not a concept that is often associated with the European Union. But it is a concept that is irrevocably linked with Germany’s history and its future. In the first part of the 20th century, the country’s big geopolitical idea was “Lebensraum,” or living space. The idea fueled German expansionism in the 1930s and led in part to the outbreak of World War II. After the war, the leading idea was Germany’s Western orientation. Chancellor Konrad Adenauer understood that West Germany could rebuild its economy and society only as long as it was committed to two Western institutions, NATO and the European Economic Community.
The next grand geopolitical idea was German reunification within the framework of the European Union. Chancellor Helmut Kohl realized that Germany could become united only as long as it pledged allegiance to an ever more integrated European Union.
Today it is a different Europe: Germany may be first among equals, but it is still committed to the European Union.
Cyprus is playing a geopolitical game of its own. It will be interesting to see whether it repeats the same choreography that Iceland followed during its financial crisis, when the country was in danger of being shut out by Western institutions. After announcing that it was in talks with Russia, the International Monetary Fund decided in 2008 to offer Iceland assistance. Cyprus, by turning to Moscow, is forcing the European Union to think hard about increased Russian influence within the Union’s borders.
Merkel has staked her political future on the idea that Germany’s interests are best served by the present constellation of the eurozone. If she is right, she will be considered one of the great postwar German leaders, together with Adenauer and Helmut Kohl. If she is wrong, all of Europe will suffer. She will not let a small island nation ruin her geopolitical vision for Germany and Europe.
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