Slowly but consequently the European Union turns out to be a trap for Germany. The outcome of the current economic crisis puts the question of pure existence for the EU on the agenda.
No question: the whole construction of Brussels’ integration project was undertaken from the beginning for Germany’s sake. Starting with the French-German European Coal and Steel Community (ECSC) in 1951 to the financial and economic unification with its restrictive economic criteria of Maastricht in 1992, Germany transformed the European West into a single homogenized economic zone. Its aim was to create a huge market area for products and workforce. Its main profiteer was the export-oriented German industry, its godfather the United States of America.
Post-war (Western) Europe was invented by US-president Harry Truman. His doctrine in 1947 geopolitically cut the ties with the former ally Soviet-Union and economically credited a huge amount of money to Western European countries including the former enemy Germany. Both measures served US-politics and industry, which had to be transformed from war-serving branches to civilian ones. Therefore every dollar credited for European countries served as a means to buy American commodities.
In this sense the European Coal and Steel Community, followed by the European Community and the European Union all were successors of America’s big plan for the post-war period: the European Recovery Programme, also called Marshall-Plan. Restoring the convertibility of currencies and the ingenious creation of counterpart-funds to make private business run, allowed the big players of the US-economy to set up export-orientated production after the war was over. The Western part of Germany was Washington’s key-partner for this plan. In its territory, which was under militarily occupation, the integration-plan was easy to handle.
After the breakdown of the Soviet-Union and the Comecon in 1991, the expansion of this – still – American concept continued. Only now the measures of the embargo-policy of “Cocom”, which completed the Marshall-Plan against Eastern Europe and the Soviet Union, were suspended. Hungary was the first country to be released from these restrictions, whereas Russia stayed on the embargo-list. (IBM, for example, was sentenced to a fine of 9 Mio. US-Dollars in 1998 by an US-court for breaking the embargo against Moscow.)
After 1989/91 Eastern Germany was taken over by Bonn, and Berlin was made its capital as it was before the war. Western Soviet allies and even former “Russian” territories in the Baltic regions were peripherally integrated into the European Union in 2004 and 2007. Germany not only dominated economically but also politically. And the military control stayed with America.
But Washington’s guidance is not only a geopolitical, military one. The US-Dollar still is, also for the European Union and Germany, the leading currency. And the Federal Reserve Bank’s decisions are as important for the US-economy as for European players. As long as EU-Europe holds more than a quarter of the world reserves of greenbacks in the treasures of the European Central Bank and the strong-rooms of its nation-states, Brussels and Berlin are in the hands of the Fed’s decisions. It is not by accident that the list of George Bush’s rogue states consisted of exactly those countries which tried to clear foreign trade in other currencies than the US-Dollar: Iraq, Iran, Venezuela …
Being “patriot” in Poland
Since America’s war on Iraq 2003, which ironically was named by the Pentagon “war on terror”, analysts discuss a possible split within the old European Community/ Union and its later new member-states. “Old” and “new” Europe was supposedly invented along the definition of close partnership with Washington and its plan to expand its sphere of economic and geopolitical interest. When George Bush the younger announced his new strategy to use the territories of the Czech republic and Poland for deploying so-called anti-missile-systems against possible terrorist attacks, this line between “old” and “new” Europe was reinforced. Press-officers spoke of measures to defend the free world from Islamic aggression, but everybody knew that the deployment of missiles named “patriot” aimed at Moscow.
Now Barack Obama chose a somehow moderate way of missiles’ deployment. The geopolitical question remains: is there a gap between Berlin and Warszawa? Maybe. But it does not follow the main dividing line of being more or less American. As long as the fleet of US-bombers heading for Iraq, Afghanistan and Yugoslavia/Kosovo start from Bavarian Ramstein and the main European centre for military logistic lies in Germany, Polish politicians may express themselves more “American” than America, but Germany will stay Washington’s main and most important partner. To put it clear: Angela Merkel remains the closest ally of Barack Obama. Her role as closest friend is rather threatened more from the post-Gaullist French Nicolas Sarkozy, than from Polish politicians.
The fact that every single new Eastern member-state of the European Union had to join NATO before joining EU (most of them in 1999, just before the first attack “out of area” against Yugoslavia) shows in another direction. But it shows one thing: the control of the leading military force over the economic process of “integration” in Europe is undeniable.
The economic crisis and its geopolitical impacts
What does the crisis of 2008 consist of? First of all and economically: this crisis is a structural one. Its roots lie in the phenomenon of capitalist over-production and it follows Kondratieff’s longue waves-cycles. Over-produced commodities are seeking for sale and ready markets. After periods of business- and technologic rationalizations and constant enlargement of the sales- and labour-markets, which all somehow reached its limits, capital tends to seek other spheres of making profit. Speculation is a logic answer to declining profit in the sphere of production. And the bubbles in the financial markets with its betting on future prices and its subprime-credits for consumption follow this logic. After the collapse in 2008, speculators called for the state.
The USA already had a long tradition of state-intervention into so-called private business at least in macro-economic terms in order to create demand. What else is the “war on terror” than a state-subsidy for the weapons industry? Billions of dollars were printed during the last two decades to finance one of the key sectors, if not the only left (beside agriculture) of American industry. True, this traditional link of big business and state-administration made the USA the biggest debtor country in the world. But as long as China, the European Union, the oil-states (and Japan) are accepting these green backs and stockpile them as reserves, this system will continue. It only was a small step from military Keynesianism to Obama’s state-support for the banking and assurance system, while – somehow not astonishing – the US-president is still fighting for a common system of health-care.
In Europe the situation was and is completely different. There is no military Keynesianism operating important parts of the economy. And the European Central Bank was proud of its monetarist policy, led by the idea of Maastricht not allowing state-debts of more than 60% of GDP and deficits over 3% of GDP. Reality surpassed these restrictions everywhere. In May 2010 only one out of 27 EU-member states, Estonia, which by the way is under the governance of a currency-board-regime of the IMF, fulfilled the criteria of Maastricht. On the 10th of May 2010 ECB boss Jean-Claude Trichet gave up. Since then the ECB is ready to take junk bonds as a guarantee to lend Euros. In a simple term: the printing-machine is on.
But there is a main difference compared with the printing of dollars (not to speak of the inflationary character, which is going to hit both currencies): the Euro-zone is not a political unity. And the European Union is no unified state, but a union of 27 states. The first and strongest of these states is Germany. It was the German economy, which profited most from the criteria of Maastricht, because it could impose a strong Euro on weak states – like for example on Greece or Portugal – supporting exports of German products. On the other side the EU-European periphery was not competitive on non-Euro export-markets because of the strong Euro. The situation changed when Greece was unable to pay back its public loans. At this very moment Germany saw the shadow-side of the common currency. Leaving Greece bankrupt will mean delivering the Euro to the market-forces. In a situation of crisis this can lead to the end of the currency. The answer, if this happens, is not given yet.
Germany is caught in the logic of the Euro. For the moment Berlin’s government decided to rescue this currency. In the case of Greece this was somehow easy because Germany’s possible counterpart, France respectively French banks, were engaged with lots of bad loans on the Greek banking market. So the decision to rescue Greece respectively the Greek banking-structures and by this the Euro could be done easily and quickly. The big burden remains: Euro-countries like Portugal, Spain, Italy, Ireland … are far away from being economically healthy. Germany as the main payer in case of collapse is forced to seek consensus in the Euro-zone and the European Union.
Sure, there is one big alternative: the Russian option. Germany needs raw materials and labour-force, Russia is keen for technology and could provide Germany’s hunger for well-trained labour-force. In the case of raw material some contracts and projects are on the way. But German investments in Russia and Russian work force in special “free zones” for exports towards Germany have to follow the guidelines of the European Union. Along these rules, no single EU-country is allowed to enter into a preferable agreement with Non-EU-countries. Other EU-members cannot be excluded on the ground of a system of common preferences and common agreements on tariffs and trade. It is not possible to build up new economic relations between Germany and Russia exclusively. This exclusiveness would be necessary to guarantee a possible German-Russian synergy however. So this vision of new Russian-German economic ties would require a breakdown of the European Union as a pre-condition. History does not give successful examples, when this scenario took place. Future will show if it is possible.
