Tuesday, June 12, 2012

The Romance Between Germany And France May Be Over

This article in Der Speigle points to the unraveling of the relationship between Germany and France.  It also suggests that national interests stand in the way of dealing with the eurozone crisis.  It argues that France has always feared German hegemony in Europe.  French leaders viewed the common market as a defense against that threat.  German's bought into the vision that national interests would diminish over time and that the common market would be good for everyone.  The election of socialist president in France has changed that impression.  Hollande recently lowered the retirement age to 60 in France.  The implication of this article is that an economically stronger Germany will end up paying for socialist policies in France.  It also suggests that France's objective in aiding the struggling countries in the eurozone is to save its banks which hold a lot of the sovereign debt.

The article also suggests that a game of blackmail is going on among Germany's partners in the eurozone.  It suggests that Spain wants its banks bailed out with a no strings attached loan.  It also argues that Greece is looking for a way to cash in on leaving the eurozone.

Der Speigle has been a supporter of the eurozone.  It made sense economically for Germany because the common currency enabled German exports to its partners.  The fear that Germany will be forced into transferring its wealth to weaker countries in the eurozone, has made it skeptical about the vision of a united Europe.  National interests prevail among Germany's partners.

The economic problems in the eurozone are not easily addressed in its current form.  This article suggests that the difficulty of dealing with the crisis has brought national interests into the foreground.  Perhaps they never went away.

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