A Union Divided: "More Europe" Means "More Germany"

The tense division in Europe's union are becoming increasingly evident. Between Greece's "no" vote, yesterday's EU Parliament outbursts, and today's German parliament commentary it is clear that, as Bloomberg reports, the centerpiece of Merkel’s cure for Europe - fiscal retrenchment - has catalyzed her in the eyes of many as despite her calm but firm entreaties, an economic bully. “The lesson of this crisis is more Europe, not less Europe,” Angela Merkel said in 2012 as the integrity of the region’s monetary union was threatened by financial instability, but many, like Greece, have come to understand "more Europe" means something different: "more Germany."


As Bloomberg reports,

“The lesson of this crisis is more Europe, not less Europe,” Angela Merkel said in 2012 as the integrity of the region’s monetary union was threatened by financial instability, touched off by Greek debt, that was spreading through the euro zone’s weaker economies. By “more Europe,” the German chancellor meant a deepening of the continent’s noble mission—peaceful integration to ensure prosperity and democracy—of which the common currency, the euro, is the ultimate symbol.


In the intervening three years, Greeks have come to understand “more Europe” as something different: “more Germany.” That was one of the few clear messages sent in a referendum on July 5 that had everything to do with Greek voters’ views on how Merkel had imposed her vision of Europe on the zone and if their troubled nation would be better served as part of its grand project, or not.

The centerpiece of Merkel’s cure for Europe was fiscal retrenchment.

It was an almost maniacal drive for reduced budget deficits and debt levels—the targets for which were already enshrined in euro zone agreements—combined with reforms to labor markets and welfare programs. Merkel believed that such policies would strengthen the euro zone’s financial position and competitiveness. The medicine may be bitter, but in the end, like an ailing patient, Europe would rise from its sickbed with renewed vigor.

The result has been stagnation.

Merkel’s insistence on a hard line isn’t masochism, just politics. One poll released in early July showed that 85 percent of Germans surveyed opposed making concessions to Greece. Merkel has faced resistance to a softer line from within her ruling coalition. Amid the recent bailout negotiations, one lawmaker from Merkel’s Christian Democratic Union derided the euro zone’s policy toward Greece as a “financial carousel.” Her hard-nosed finance minister, Wolfgang Schaüble, once said that Greece “cannot be a bottomless pit.” Such attitudes are fostered by a widespread perception among Germans that Greece is unworthy of their aid. “NEIN,” blasted a headline in the tabloid Bild earlier this year. “No more billions for greedy Greeks!” it insisted. Even the referendum results produced little sympathy. Shortly after the vote, Georg Fahrenschon, head of the association of German savings banks, said “the Greek people have spoken out against the foundations and rules of the single currency bloc.”


Such sentiments have hindered efforts to tackle the crisis from the start.

That German view—the euro zone’s problems aren’t of Germany’s making—has dictated Berlin’s approach toward the crisis. Merkel has played the unrelenting taskmaster, treating her beleaguered neighbors not as partners, but as spoiled children who could be set right only by the rod.

Last year, French President François Hollande and Italian Prime Minister Matteo Renzi advocated greater flexibility in the austerity program to promote job creation. “If everyone does austerity, we’ll have even slower growth,” Hollande groused in October. Merkel would have none of it. “We have had times in Europe with very high deficits and yet no growth, so we must learn from the past,” she said. When some European leaders proposed “eurobonds,” instruments backed by the zone to ease financing costs on individual states, Merkel rejected the idea.


Even the IMF, in a June report on Greece’s finances, deemed the country’s debt load “unsustainable” and recommended relief. Merkel accepted only minor concessions to bailout demands, insisting that the Greeks impose further tax hikes and public spending cuts. She labeled her offer “generous.”

Is it any wonder, then, that the Greeks said no?

They may be only the first. Joblessness and recession have persuaded other voters in Europe to seek a new course. Gaining popularity in Spain, where unemployment is 22.5 percent, is the leftist political movement Podemos, which also seeks a fairer deal from the rest of Europe. “The problem isn’t Greece, the problem is Europe,” Podemos’s chief, Pablo Iglesias, said in late June. In Italy, Beppe Grillo, leader of the anti-establishment Five Star Movement, called for a referendum to decide if Italy should remain in the monetary union.

Europe’s leaders characterized a no verdict in the Greek referendum as a vote against the idea of Europe. In fact, the resounding no was a vote against the existing harsh reality of membership in present-day Europe.

As Bloomberg concludes, unless Europeans act as partners in their grand quest for solidarity, they will end up with less Europe, not more.