Let’s not delude ourselves: if the euro falls apart, so will the European Union (the world’s largest economy), triggering a global economic crisis on a scale that most people alive today have never experienced. Europe is on the edge of an abyss, and will surely tumble into it unless Germany – and France – alters course.
France will have to say yes to a political union: a common government with common parliamentary control for the eurozone. The eurozone’s national governments already are acting in unison as a de facto government to address the crisis. What is becoming increasingly true in practice should be carried forward and formalized.
Germany, for its part, will have to opt for a fiscal union. Ultimately, that means guaranteeing the eurozone’s survival with Germany’s economic might and assets: unlimited acquisition of the crisis countries’ government bonds by the European Central Bank, Europeanization of national debts via Eurobonds, and growth programs to avoid a eurozone depression and boost recovery.
One can easily imagine the ranting in Germany about this kind of program: still more debt! Loss of control over our assets! Inflation! It just doesn’t work!
But it does work: Germany’s export-led growth is based on just such programs in the emerging countries and the US.
If China and America had not pumped partly debt-financed money into their economies beginning in 2009, the German economy would have taken a serious hit.
Germans must now ask themselves whether they, who have profited the most from European integration, are willing to pay the price for it or would prefer to let it fail.
Beyond political and fiscal unification and short-term growth policies, Europeans urgently need structural reforms aimed at restoring Europe’s competitiveness. Each of these pillars is needed if Europe is to overcome its existential crisis.
Do we Germans understand our pan-European responsibility? It certainly does not look that way. Indeed, rarely has Germany been as isolated as it is now.
It is still not too late to change direction, but now we have only days and weeks, perhaps months, rather than years.
Germany destroyed itself – and the European order – twice in the twentieth century, and then convinced the West that it had drawn the right conclusions.
Only in this manner – reflected most vividly in its embrace of the European project – did Germany win consent for its reunification.
It would be both tragic and ironic if a restored Germany, by peaceful means and with the best of intentions, brought about the ruin of the European order a third time.
Excerpts from J. Fischer’s, The Threat of German Amnesia, Project Syndicate, May 25, 2012. Emphasis in bold or italics added by Ellopos. Joschka Fischer was German Foreign Minister and Vice Chancellor from 1998 to 2005.