Monday, February 23, 2015

Germany's Pyrrhic Victories and Signs of Hubris: Ukraine and Greece

Germany is unquestionably the leading economy within the eurozone. Yet it seems that it has also decided to lead, whether by default or on purpose, the European Union and particularly the Eurozone. There is already a plethora of voices discussing the issue, as the link provided below and the recent critique of philosopher Habermas, so I will avoid repeating the arguments. The point I would like to argue is that Germany is doing a very bad job of leading Europe despite appearing to get its positions imposed, inflicting long term losses not only on others which they call friends and partners, but ultimately to itself. And I shall use the Ukraine peace effort and the Greek sovereign debt crisis -episode 3 - as examples.

Ukraine: If I were writing a novel, I would start with "Europe's boss, taking hand in hand her alibi Francois, went for a romantic walk along the shores of the river Donets". However this is not a novel, it is real war with real dead and high emotions on all sides. So what did Germany do wrong here? (A brief background is provided in a PS at the end).

  1. Merkel was self appointed as informal EU leader on the issue despite the specific provisions of the Lisbon Treaty providing for a High Representative of the Union for Foreign Affairs and Security Policy to represent the EU in foreign affairs, ignoring basic recent concepts of the Union's rulebook. Dragging along Francois Hollande, who needs to increase his visibility at home, as an alibi that this is two major players in Europe doing things, not the EU.
  2. Merkel displayed incredible hubris in doing so: The Ukraine has been a target of German foreign policy or practice: the holding of part of it by the Austrohungarian Empire, the immigration of the Ukraine by Germans in the 19th century, the subsequent treaty of Brest Litovsk of 1918 that handed it to Germany, and most recently the invasion of the Ukraine by Nazi Germany in 1941 which required a lot of Russian blood to be spilt in liberating the Ukraine. When Germany tries to mediate between the Ukraine and Russia for a cease fire which can only work against the Russian nationals in the Ukraine, it is an insult to Russia. It is the equivalent of Israel mediating between Saudi Arabia and Iraq after the invasion of Kuwait, of Taiwan mediating between the PRChina and Japan, of the USSR mediating the reunification of PDRGermany by West Germany.
So Merkel went away, as a modern Chamberlain leaving Munich, thinking she had achieved peace and a diplomatic victory on Germany's vision of the Ukraine. And quite similarly to the subsequent 1938 invasion of the Sudetenland, Putin is increasing his military support for the separatists...

Greece: It is clear by now that Germany has coerced the new Greek government into submission over the last 2-3 weeks, only waiting the list of additional taxes baptized reforms to complete this. It is one more victory for Germany over the "spendthrift and lazy Greeks". What did Germany do wrong here:
  1. It has shown once again that it considers itself as the undisputed rightful boss of the eurozone, taking over the negotiation with Greece as if it was only Germany who provided loans.
  2. It has won once again brownie points by telling Greece to repay all its debts. Yet this is an impossibility, once again postponing the inevitable and continuing failed austerity with a new name.
  3. The inevitable default will only lead to the complete destabilization of Greece, adding to the world's problems, without getting any loans repaid anyway. Greece was economically and socially destabilized already, the basis of Syriza's victory, it can now go on collapsing. Capital flight will only continue and no sensible investor will put his money into increased uncertainty.
  4. It has shown to all euroskeptics that their nationalistic arguments against the euro and the EU are 100% valid. As Podemos leader said, if Germany does not relax austerity for Greece, they should expect to be talking to Marine Lepen's Front National in the near future. It also proves to the UK that not joining the euro was the wisest thing ever done, thus retaining sovereignty.
  5. It has worked up on nationalist lines its own population, undermining even more the European Project. Tabloid titles remind of other sadder times.
  6. It has proven to Poland that being in the EU/NATO protects from Russia, not being in the euro protects from Germany.
This sounds pretty pyrrhic .. no debt repayment, no or less euro, no european integration, more nationalistic Germans.


PS 1: A recent example of the discussion on Germany's self assumed Euro-boss role.

http://www.bloombergview.com/articles/2015-02-22/germany-thinks-it-s-europe-s-boss-on-greek-debt

PS 2: Brief background on Ukraine crisis: The West and Germany in particular, has tried to get the Ukraine to become part of the EU and had spent years pushing for entry negotiations/other preentry status . The change of the elected president's stance on the EU resulted in a "popular" revolution to topple him, with the full blown support of the west. This is fundamentally a sort of a coup d'etat, as it was focused on the nationalistic Ukrainian Kiev area and ignored the majority russian rest of the country. As Russia views the Ukraine as part of Russia and not merely a satellite state under the Yalta Treaty, it is inconceivable to them to let go of the Ukraine, and even more the majority russian areas. So they immediately reacted with annexing Crimea, an area where very few ethnic ukrainians had ever existed and was only a historical administrative transfer from SSRussia to SSUkraine; and since then, they have been supporting the separatist Russians in the east part of today's Ukraine.

No comments:

Post a Comment