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Thursday, May 24, 2012

Germans hit out at the EU's "debt treaty"

Angela Merkel has grounds to be glum
Most recent headlines concerning opposition to Merkel’s eurozone policies have focused on the anti-austerity positions of Hollande and his supporters, and at the more dramatic end, Tsipras and the radical Greek opposition.

However, recent developments on the home front are interesting as well, with domestic opposition to Merkel’s policies gaining focus and momentum, albeit targeting the taxpayer-backed bailout element of the package as opposed to the austerity one. Yesterday saw the launch of a new pressure group called Allianz gegen den ESM (Alliance against the ESM), comprising a coalition ten MPs, business groups and civil society organisations. The group have a (pretty basic) website setting out their five main objections, which are as follows:
  1. The ESM is to be permanent, with member states having no right to leave. 
  2. The ESM Board of Governors, comprised of member states’ Finance Ministers, would wield decision making powers over policy and instruments. 
  3. The Bundestag will have few opportunities for participation and control. The total size of the ESM “mega bank” will be €700bn, more than five times the size of the EU budget. Finance Ministers could agree on an indefinite increase. 
  4.  Member states have to pay €80bn in an-front cash contribution to the ESM, of which Germany’s contribution is around €22bn. Any losses will be borne by taxpayers as the participation of banks and other private creditors is not mandatory. 
  5. The ESM has no mechanism for debt restructuring and can therefore not be considered to be a form of emergency assistance. 
The group have also put out a slightly dystopian video warning of the dangers of a Europe built on debt.

The group’s 12 o’clock press conference yesterday prompted Handelsblatt to lead with the headline: “High-noon for Merkel’s euro policy”. The paper also very helpfully compiled a ‘rogues gallery’ of the key players. While many of the MPs are long standing critics of the ESM and the bailouts, such as the CDU’s Klaus-Peter Willsch or the FDP’s Frank Schäffler, linking up so clearly with other groups allows their message to be heard more widely beyond the Bundestag. Other participants worthy of note are:

Marie-Christine Ostermann, Federal President of the Association of Young Entrepreneurs, who warned that:
“With ever larger rescue mechanisms, for which the liability is borne by others, Europe is moving ever further down a blind alley.” 
Lutz Goebel, Federal President of the Family Business Association, who in the past has compared the eurozone bailouts to the voyage of the Titanic, and urged the Bundesbank to seize the wheel of rescue before it was too late.

Karlheinz Däke, President of the German Association of Taxpayers, who argued that:
“The subsidising of the distressed eurozone countries, especially by the German taxpayer cannot be the answer to the debt policy of recent decades. The euro has only a future with individual liability and responsibility.” 
John Hüdepohl from Bündnis Bürgerwille (Alliance for Citizens’ will) which campaigns for more input and involvement from ordinary citizens in the eurozone bailouts.

Ultimately, despite Handelsblatt’s dramatic headline, this group and other similar constellations are not in a position to pose a serious threat to Merkel's policies at the moment. However, it shows that German domestic opposition has the potential to be uniting and organising itself, giving it a much better capacity to campaign for alternative policies. If Merkel appears to give in on ‘red-line’ issues such as eurobonds or greater ECB intervention, or if the eurozone is plunged into even deeper crisis – for example if there is no breakthrough in Greece’s re-run elections – expect such campaigns to pick up momentum.


Rollo said...

What a nice twist to history, that Europe should be saved from an unelected dictatorship by the Germans. The only way that the Politburo and their satellites will be downed is when the funds are cut off. More and more Germans will be adding their weight to the stop-cock.
Nice, the stop-cock for turning off the French.

christina Speight said...

Rollo - Whence cometh your unbounded optimism ?

Rollo said...

I had always hoped to get out of the EU before it collapsed; but a fallback position is still to get out of it when it does. That time is nigh.

98Alpha said...

Those whom the Gods wish to destroy, they first make "MAD" Do you recall that phase Mutually Assured Destruction. This so Called European Union has been MAD fron it's very inception!The EU is a corrupt Third World oganisation, manned by second hand politicians, that excercises power with out being accountable to proletariet. It is not only un-democratic it is ANTI-DEMOCRATIC. It is time for the EU to be consinged to the Dustbin of history.

lhlrew said...

Millions of British and Commonwealth Troops gave their lives for democracy and now our Government wants to give it all away to an unelected group of dictators. They must be stopped at all costs. It is time to throw out all these career politicians with no real world experience. VOTE UKIP, Nigel Farage, MEP, has seen them for what they really are.