By Luke Ming Flanagan
I was at an ECON meeting this morning (Economics & Monetary Affairs) at which two Finance Ministers, Wolfgang Schauble (Germany) and Pier Carlo Padoan (Italy) were the guest speakers. For obvious reasons I was particularly interested in hearing what Wolfgang had to say, given he has been so outspoken, so hawkish, so unswerving in his views that the EU ‘programme’ countries must continue the austerity policies, no debt reduction.
It was a short meeting, just over an hour, but what I found striking about it was Herr Schauble’s approach. Several times he brought up the fact that in the early days of the euro and The Stability & Growth Pact (SGP – ah, this place and its acronyms!), Germany was the one breaking the rules on a regular basis, failing year after year to meet the set targets of 3% (budget deficit) and 60% (debt/GDP), and all without even a slap on the wrist from the EU.
It was a bit of oul’ plamás, the kind we’re well used to in Ireland – ‘Ah sure look, I know I’m big and handsome and rich now and the whole world is trying to court me but there was a time, back in the day, when I was a bit of a vagabond!’
He also went on to talk about solidarity, about how the strong should help the weak, how Germany itself is a Federal state, went through its own period of imbalance when the West had to help the East after the Berlin Wall finally fell – in fact time and again he came back to ‘solidarity’, the nations of Europe standing shoulder to shoulder.
Wolfgang also mentioned that when the euro was launched, he himself had concerns about the flaws in the design, the potential for trouble.
Then came the rub.
The win by Syriza in the Greek elections last weekend has created a bit of confusion around here about what’s going to happen next, about the prospect of Greece now demanding a new deal on their debt, a deal that will surely include substantial debt write-down. This of course also has implications for Ireland – if Greece gets the write-down it deserves, then so must we, even if it IS in spite of our own government.
Here though was where Herr Schauble’s understanding of ‘solidarity’ took a turn.
There would be no debt write-down, not a cent. ‘We must stick to the rules!’ he proclaimed, ‘The Greek people are suffering more than most in Europe but this wasn’t because of decisions taken in Brussels, it was because of decisions taken by their own elite for decades!’
Oh, how short a memory, Wolfgang! Not just because only a few minutes earlier you had spoken of the launch of a flawed currency, which DID contribute to the problems in Greece, Ireland, Portugal, Italy and Spain and which of course emanate from Brussels; not just because also only a few minutes earlier you had also spoken of how Germany had been repeat rule-breaking offenders and got away scot-free with it; not either just because your words on ‘solidarity’ now rang so hollow.
It’s because of 1953.
Having lost a war they themselves had started, the German people were suffering under a massive debt burden but, in a gesture of real solidarity, at a Debt Conference in London they were granted relief, in many cases by countries they had sorely damaged during that war.
The Greek people didn’t crash the world economy, didn’t crash the euro, nor did the Irish people, nor the Spanish/Portuguese/Italians, but all are now suffering under a massive debt burden; where now is that same spirit of goodwill and solidarity from Germany, from its hidebound Finance Minister?
Eaten bread soon forgotten, Herr Schauble, but you should know, surely, the wheel that now sees Germany at the top is turning, always turning.