Angela Merkel’s tenure will be remembered as Germany’s, and Europe’s, cruelest paradox. On the one hand, she dominated the continent’s politics like no other peacetime leader — and is leaving the German chancellery considerably more powerful than she had found it. But the way she built up this power condemned Germany to secular decline and the European Union to stagnation.
by Yanis Varoufakis
Part 4 - Episode 3: To the Bitter End
The pandemic offered Angela Merkel a final chance to bring Germany and Europe together.
Great new public debt was inevitable, even in Germany, as governments sought to replace incomes lost during the lockdown. If there was ever a moment for a break with the past, this was it. The moment was crying out for German surpluses to be invested across a Europe that, simultaneously, democratizes its decision-making processes. But Angela Merkel’s final act was to ensure that this moment would be missed, too.
Great new public debt was inevitable, even in Germany, as governments sought to replace incomes lost during the lockdown. If there was ever a moment for a break with the past, this was it. The moment was crying out for German surpluses to be invested across a Europe that, simultaneously, democratizes its decision-making processes. But Angela Merkel’s final act was to ensure that this moment would be missed, too.
In March 2020, in a fit of harmonized panicking following our EU-wide lockdowns, thirteen heads of EU governments, including France’s president, Emmanuel Macron, demanded from the EU the issue of common debt (a so-called eurobond) that would help shift burgeoning national debt from the weak shoulders of member states to the EU as a whole, so as to avert massive Greek-style austerity in the post-pandemic years. Chancellor Merkel, unsurprisingly, said nein and offered them a consolation prize in the form of a recovery fund that does precisely nothing to help shoulder the rising national public debts — or to help press German accumulated surpluses into the long-term interests of German society.
In typical Merkel style, the recovery fund’s purpose was to seem to do the minimum necessary of that which is in the interests of a majority of Europeans (including a majority of Germans) — without actually doing it! Mrs Merkel’s final act of sabotage had two dimensions.
First, the recovery fund’s size is, intentionally, macroeconomically insignificant; that is, too small to defend the EU’s weakest people and communities from the austerity that will eventually come once Berlin gives the green light for “fiscal consolidation” in order to rein in the burgeoning national debts.
Second, the recovery fund will, in reality, transfer wealth from the poorer Northerners (e.g., the German and Dutch) to Southern Europe’s oligarchs (e.g., Greek and Italian contractors) or to German corporations running the South’s public utilities (e.g., Fraport, which now runs Greece’s airports). Nothing could more efficiently guarantee the further toxification of Europe’s class war and North-South divide than Mrs Merkel’s recovery fund — the final act of sabotaging European economic and political unity.
First, the recovery fund’s size is, intentionally, macroeconomically insignificant; that is, too small to defend the EU’s weakest people and communities from the austerity that will eventually come once Berlin gives the green light for “fiscal consolidation” in order to rein in the burgeoning national debts.
Second, the recovery fund will, in reality, transfer wealth from the poorer Northerners (e.g., the German and Dutch) to Southern Europe’s oligarchs (e.g., Greek and Italian contractors) or to German corporations running the South’s public utilities (e.g., Fraport, which now runs Greece’s airports). Nothing could more efficiently guarantee the further toxification of Europe’s class war and North-South divide than Mrs Merkel’s recovery fund — the final act of sabotaging European economic and political unity.
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