The German paymaster of Europe has subjugated Greece with breathtaking ruthlessness. In 1941, Nazi Germany crushed Greece with its Panzer tanks. Today, without firing a shot, Germany’s Panzer banks have accomplished the same, turning the country into a de facto German «protectorate» whose national assets and sovereignty are being turned over by Berlin’s financial dictate.
Far from being all quiet on the «southern front», the Greek government is now facing a revolt within its own ranks as the country’s parliament absorbs Berlin’s shock attack on its economy and sovereignty. France, Italy and other highly indebted southern eurozone countries are also reeling from German financial tyranny. The reverberations are shaking the entire edifice of the EU and its supposed values of European equality and solidarity».
Washington is far less concerned by the damage to European values than by the opening up of deep political rifts between EU capitals, which could then undermine the architecture of its hegemony in Europe and toward Russia.
When the financial bailout «agreement» was reached after tortuous negotiations last weekend, European Union leaders tried their best to make the outcome sound like a kiss-and-makeup»compromise». European Council President Donald Tusk hailed it as «a typical agreement between European partners». French President Francois Hollande declared: «Europe has won!» While European Commission chief Jean-Claude Juncker gave the game away by claiming that «Greece was not humiliated».
But the sweeping austerity measures that Athens is being forced to implement in order to avail of a third bailout put at €86 billion ($95 billion) is far from a compromise. It is a capitulation by Greek Prime Minister Alexis Tsipras and his»anti-austerity» Syriza government. Some €50 billion worth of Greek public assets are to be locked up under EU creditor»trust» to be sold off at some time in the future if Athens does not implement the draconian austerity demands. By «EU creditors»what is meant is German banks, which are the paymaster of Athens and much of the rest of the EU.
The Washington Post did not equivocate on the brutal terms, although it disguised Berlin’s sinister role with the catch-all euphemism of «European leaders». It reported: «Greece acquiesced early Monday to a punishing ultimatum from European leaders, agreeing to a lighting-fast passage of reforms and a pledge to strap itself into a fiscal straight-jacket to save its banks and stay in the euro». The report added that «a financial gun had been held to Greece’s head».
Reuters pointedly reported that Greece had «surrendered». «Eurozone leaders made Greece surrender much of its sovereignty to outside supervision on Monday in return for agreeing to talks on an 86 billion euros bailout to keep the near-bankrupt country in the single currency».
In a second Washington Post article, the headline betrays American misgivings about Berlin’s terms. «Germany doesn’t want to save Greece. It seems to want to humiliate Greece».
As the dust settles over Germany’s de facto take over of Greece’s sovereignty, Washington is now fighting a rearguard action to try to mitigate the terms of the surrender. The Washington-dominated International Monetary Fund (IMF) has renewed its calls for debt restructuring for Athens. «The IMF is calling for much greater debt relief for Greece than what EU countries are willing to give so far,» reported France 24, while the BBC headlined: «IMF attacks EU over [Greece] bailout terms». Again, the euphemism of «EU leaders» is being invoked, when the unspoken specific target for Washington’s admonition is Berlin.
What has the United States alarmed is the geopolitical fallout from the Greek crisis. Explicitly, the US is worried that the debacle driven by Germany’s hardline financial dictate could result in Greece crashing out of the EU. That in turn could lead to a wider melt down of the 28-member bloc and the unravelling of Washington’s anti-Russia project. That project is dependent on a cohesive EU implementing US-led trade and diplomatic sanctions against Moscow, as well as serving as a platform for American-led aggression toward Russia under the guise of the NATO military alliance.
As noted in an earlier column, in the days before the latest bailout «agreement», Washington made a strenuous intervention to urge Germany to soften its demands on Greece. US Treasury Secretary Jack Lew and IMF chief Christine Lagarde both called on Berlin to afford debt restructuring for Greece, that is, a substantial write-off of Greece’s $350 billion debt – most of which is held by Berlin.
Notably, too, the British government, which serves as a mouthpiece for Washington in Europe, was also appealing to Berlin to soften its policy on Greek finances – this at the same time that Britain’s Chancellor George Osborne was unveiling swingeing public spending cuts on his own population. Hardly concern from London then for Greek poverty, and more likely a dutiful geopolitical message on behalf of Washington.
Washington’s appeals to Berlin fell on deaf ears, which as noted, pushed on for a financial scorched-earth surrender by Athens. German Chancellor Angela Merkel and her powerful Finance Minister Wolfgang Schäuble have shown no mercy to the Athens government. Both have ruled out any debt restructuring. Merkel said of the bailout terms that Greece «faces a long tough road ahead».
But it’s not just Washington that is unnerved by Germany’s newfound truculence with regard to EU finances. Even within Germany, media reports have voiced concerns that the Berlin Chancellery’s financial dictates toward Greece are straining the foundations of the bloc. German newspaper Der Spiegel said Berlin was displaying a dangerous «hypocrisy» over its insistence on debt repayment considering the historic relief that Germany itself received over Second World War reparations.
Another German media outlet, DWN, warned that Berlin’s financial imperiousness was threatening to collapse the EU. From a translation, the newspaper said: «Angela Merkel and Wolfgang Schäuble have overnight transformed the EU into an entity that is no longer held together by trust, but only by naked fear. With the signing of the agreement with Greece the nightmare for the EU has begun. Life in Europe is no longer determined by contracts, but by the law of the jungle».
The Washington Post reported on the brewing tensions within the EU over the Greek debt negotiations in Brussels. «European leaders had seriously clashed over the deal to rescue [sic] Greece, with Germany and Finland taking a hardline and the leaders of France and Italy expressing a distinct lack of ease over the German position – worried that it was undermining the European ideal».
French Finance Minister Michel Sapin was duelling with Germany’s Wolfgang Schauble by insisting on a degree of debt forgiveness for Greece. In the end, Schauble over-ruled his French counterpart, wrenching from Athens a humiliating surrender.
But in the aftermath of Berlin’s financial conquest, the French government is now giving full-throated endorsement to Washington’s renewed call for debt relief, as articulated again this week by the IMF. We can be sure that Berlin is in no mood to make concessions over its financial dictate, which can only lead to more confrontation between it and Washington, together with Paris and Rome.
Latest Eurostat figures on country public indebtedness from show that there is a clear north-south divide in the EU on the issue of national finances. Apart from Greece, whose total public debt is running at a peak of 180 per cent of gross domestic product (GDP), France, Italy, Spain and Portugal are also seriously overloaded with respective figures of 95, 130, 97 and 130 per cent of GDP.
In contrast, the northern European countries have much lower debt levels. Poland is on 50 per cent of GDP, while Latvia, Lithuanian and Estonia have less than 40 per cent. Luxembourg, Netherlands, Finland, Denmark average a debt-to-GDP ratio of around 50 per cent, according to the Eurostat figures. Germany itself has a national debt level of 77 per cent of GDP.
This division of debt correlates with the differing policy in these capitals towards Greece. Germany’s hardline stance is matched by the relatively low-debt countries. There are structural reasons for the varying indebtedness that stem from the competitive advantages that the euro currency has bestowed on Germany’s more developed industrial and export-orientated economy.
No doubt the unease felt by France and other highly indebted EU members is that the Berlin paymaster will sooner or later come banging on their doors for repayment – and on the same draconian terms that are now being applied to Greece. That would explain why France and Italy in particular are rattled by Berlin’s financial dictate and have been calling for some slack to be shown to Athens. They feel that they could be next for Berlin’s Panzer banks and shock-troops in pinstripe suits.
On the other hand, Washington’s disquiet arises from the geopolitical backlash from a Europe that is riven with rivalries and acrimony. From Washington’s point of view, Berlin’s financial «efficiency» towards weaker EU members is a spanner in its geopolitical designs of confronting Russia. The US wants to keep Europe united, whereas Berlin’s quest is for financial aggrandisement and economic dominance in the EU, even if that means some weaker states being ejected.
Historical resonance abounds. As in Nazi Germany’s ascent in times past, Washington and its British ally will have to move decisively to derail the Berlin machine for their own selfish strategic interests with regard to Europe and Russia. In that case, we may anticipate a mounting political campaign from Washington and its London lackey aimed at taking down German might – before Paris also gets marched on by the Panzer banks.