The newly elected French Socialist president, François Hollande, is warning Germany that Mediterranean ideas of “growth,” not Germanic “austerity,” should be the new European creed. No surprise there — reckless debtors often blame their own past imprudence on greedy creditors, especially if the latter are supposed to be guilt-ridden over causing two world wars.The situation in Europe is tense. The PIIGS♠ are in economic trouble. How are the nations with big debt and few internal solutions to be rescued? The Greek political parties failed to form a Government and now they are facing elections on 17 June. The previous elections were 2 May, of this year. Italy seems to be threatened♥ by the Greek crisis. And on it goes.
All over Europe, the gospel is that tight-fisted Germans are at the root of the European Union meltdown: They worked too hard, saved too much, bought too little, and borrowed not at all. All that may be true, in theory. But, in fact, faulting thrift and industry is a prescription for incurring anger and guaranteeing backlash — especially in the case of the Germans, who are now being asked to provide even more capital to help other European economies recover.
There is one general rule about the history of the modern state of Germany since its inception in 1871: Anytime Germany has been both unified and isolated, armed conflict has followed.
The question is, will the new French President, Francois Hollande, try and roll the Germans? If he tries it might not come out well. Even the Obama Administration has suggested that he move slowly.
In Europe we are seeing the great struggle between Keynes and Austerity. The Germans are backing Austerity—it works for them—and a number of the others—but not all—want a Keynesian pump priming.
I do think there is some confusion about taxing people. President Hollande wishes to tax the wealthy. However, in one form or another everyone pays a "tax". If the Keynesian approach does not grow the economy, then those on the bottom are being "taxed" by not having jobs and a chance to move up. On the other hand, if the Austerity advocates do not ensure that those out of work are not in depredation, then there will be a move to radical political parties of various flavors, but which all are bad for comity. The question is, how do we expand the pie so all get a bigger portion.
But, back to Germany, as one person noted with regard to this article,
Well, failure to learn history from the records means another lab class and a field trip.I laughed out loud when I read that. Laughed because it was so true and it was better than crying.
Regards — Cliff
♠ Portugal, Italy, Ireland, Greece and Spain.
♥ I picked this link for the beautiful picture of the Frecce Tricolori over Rome, with the Monument to Vittorio Emanuele II, to the right.