Merkel, the hara-kiri of national sovereignties and the birth of European Economic Government - commentaires Merkel, the hara-kiri of national sovereignties and the birth of European Economic Government 2011-02-10T11:57:55Z 2011-02-10T11:57:55Z <p>1) « Sovereignty » needs to be re-defined, in terms and factors that are relevant in the 21st century. Eg borrowing from foreigners undermines S., especially when the « real » investors are foreign governments/states (eg the Chinese Communist Party). S. also depends on an entity's level of self-sufficiency in eg staple foods, energy and other basic elements that can keep it running in times of internal, regional or global crisis (eg the 2008 global staple foods & oil prices crises). In that respect one can start talking of the Sovereignty of the EU as more achievable in our global and volatile era than than of its individual members.</p> <p>2) IMO Germany and its influence on Euro monetary policy (ie fixation with low inflation that led to high interest rates that led to an expensive Euro that led to suffocation of some many Euro firms & products by Chinese, US as well as UK and German ones in large part of the previous decade) is as responsible as anyone for the 2010-... Euro crisis. Except maybe for the NK, other Euroozone economies did not have much experience in producing exportable goods with high value/price ratio. But how many such « German » products can the EU and world markets absorb (and at what prices), should all Eurozone17 becomes « German » (in economic modelling terms).</p> <p>3) The EC cannot take the lead as the author suggests, because the UK is part of the EU and would block economic governance rules to be included in the EU legal framework (even only for EZ members). Hence a Schengen like, outside the EU framework pact becomes the only solution, partly because of the UK ! Why is Germany the one leading it ? Among other reasons, because the 27 and even the 17 have not yet learned how to work as a team or delegate to such as the EC, etc.</p> <p>Hence, full of oxymora and Catch22s as always, in this historic period for the history and future of Europe, Germany and France, 2 of the 6 founding members of the EEC & 2 other original communities, had to take the lead, tactfully or not. Not the best way possible, IMO, but necessary under the circumstances. Could/can 17 sit down and elaborate a plan, w/o a draft from 1-2 of them first ? In theory of team dynamics, it is possible, in practice though, very hard. Let's see what additions and amendments the 15 propose on March 11 (at the 1st Euro Summit) !</p> <p>@nppolicyanalyst</p> Merkel, the hara-kiri of national sovereignties and the birth of European Economic Government 2011-02-10T09:38:34Z 2011-02-10T09:38:34Z <p>Dear Joan,</p> <p>please tell me how Merkel is actually intervening in the sovereignty of the other states in terms of fiscal policy ? Germany can put forward political demands, since it has a legitimate interest, that the Eurozone will not collapse and that a second bankruptcy will be avoided, but that does not mean that the political decisions of Spain in terms of Fiscal Policy are being made in Berlin or that the Parliament in Madrid is being pretermitted ? The only one, at highest, who is questioning the Spanish capacity to act and dictating the politics are the financial markets mainly to own mistakes and bad economic policy.Indeed a Economic Government will mean that Germany has to listen more to the needs of the smaller Member States, which will probably good, but its misleading to draw a picture of a new German Reich or something, how differentiated your article may be. So the argument for the Economic Government is not that otherwise Germany would be in control of everything, but that the only way to gain back political capacity back is to put forward reforms and to gain back competitiveness probably in a pre-decided manner. Even though I believe it is time for such a step, I rather see the problem of politicians who have the illusion of controlling macroeconomic structures.</p> <p>Best, Niklas</p>