Critics of Germany’s actions in the eurozone debt and banking crisis often berate Angela Merkel, the Christian Democrat chancellor, for lacking a “vision” for Europe. Not me. I am with Helmut Schmidt, West Germany’s plain-spoken Social Democrat chancellor from 1974 to 1982, who once said that people who have visions should go and see a doctor.
What is the view of Mario Monti, the distinguished former European Union commissioner, who worked closely with Merkel during his 17-month spell as Italy’s prime minister from November 2011 until last April? Monti now chairs a committee on promoting a united Europe at the Berggruen Institute on Governance, a non-partisan think-tank headquartered in California. I contacted him earlier this week in Milan, and as usual his thoughts were perceptive and full of common sense (and quite long sentences). Read more
Judges of the German Constitutional Court (Matthias Hangst/Getty Images)
In the beginning, the eurozone crisis was a banking sector, private debt and government bond market emergency. Then economic recession, unemployment and welfare expenditure cuts took hold, propelling the growth of anti-EU, anti-establishment and anti-immigrant political movements. Now the eurozone crisis is acquiring a third dimension: one in which national constitutional courts are moving to centre stage.
True, the judges sitting on Germany’s constitutional court have been going in this direction since 2009, when they issued a judgement on the EU’s Lisbon treaty. But before the eurozone crisis erupted in full force, such rulings were fairly uncontroversial. The judges could reasonably argue in 2009 that they were simply testing if the new EU fundamental treaty was compatible with the democratic principles of Germany’s 1949 constitution, known as the Basic Law.
Now that the eurozone crisis has pushed the German government and the European Central Bank into once unimaginable measures to rescue the 17-nation currency bloc, the constitutional court has parked itself on wholly different territory. The judges would indignantly contest this, but when the court opened hearings in June into the legality of the ECB’s actions to protect the eurozone, it looked from the outside very much as if the judges had appointed themselves the supreme law lords of European integration – to the exclusion of any other EU or national legal authority. Read more
By Gideon Rachman
When pundits analyse Angela Merkel’s political success, they tend to fall back on a few well-worn ideas. The German chancellor is said to be a cautious pragmatist, a scientist who proceeds through trial-and-error, a reassuring mother-figure, a natural politician with an instinctive rapport with voters. All these things are true. But they miss out one vital element. Ms Merkel is also a political visionary. In the midst of a sometimes terrifying currency crisis, she has redefined Germany’s relationship with the EU – on a new and more sustainable basis.
The first official German election results are in and Angela Merkel’s Christian Democrats enjoyed a huge swing in the polls, but remain five seats short of achieving the first absolute majority since 1957.
That fires the starting gun for coalition talks, raising some interesting questions, especially after the chancellor’s existing coalition partner, the liberal Free Democratic Party, has crashed from its best-ever election result in 2009 to parliamentary annihilation, failing to reach the five per cent threshold. Read more
PETER ENDIG/AFP/Getty Images
By Alice Ross
As Germany’s national elections approach on Sunday, what are the core issues that voters are concerned about? Do voters really admire what Angela Merkel has done for the eurozone, or are they more concerned about domestic issues like energy prices or the minimum wage? Read more
♦ All change in Europe? French labour market reforms start to bear fruit, with signs of movement in industrial relations and eurozone austerity might be on its way out.
♦ India’s economy grew at the slowest rate in a decade – hampered by electricity shortages and poor infrastructure.
♦ Mexico’s highest-grossing film is still filling multiplexes 10 weeks after its release. The NYT looks at whether audiences just want to see rich people humiliated, or whether they are actually looking for a form of middle class catharsis.
♦ Neal Ascherson reports on the state of German politics: “They are pissed off with Angela Merkel’s governing coalition, but reluctant to let go of Mutti’s hand. In short, the public are in one of those sullen, unreasonable moods which make politicians despair.”
♦ Ethnic strife in Xinjiang, northeast China, is worsening with the growth of immigrant-dominated settlements – Uighurs are resentful of such powerful entities dominating the region and employing so few of their own ethnic group.
♦ And here’s something to chew on this weekend. When you’re having your morning pastry spare a thought for New Yorkers who have been lining up at 6am, or paying as much as $40, for a delectable new pastry – the cronut, a croissant-donut hybrid. It seems the bakery has a scaling problem, which is driving cronut-craving customers to the black market. Read more
The Germans: rated trustworthy but lacking in compassion (Getty)
The Pew poll on European attitudes came out this week and drew plenty of attention because of the remarkably negative attitudes it revealed towards the European Union. But to my mind, some of the most amusing and intriguing findings came when the pollsters probed nations’ views of each other, and of themselves.
The Germans were widely rated as both the most trustworthy and the least compassionate people in Europe – which says something about the complexity of European reactions to the euro crisis. The Italians rated themselves as the least trustworthy people in Europe. Do we call that self-knowledge or self-loathing? Asked to choose from a list of several countries, the French rated themselves as the most arrogant people in Europe. But they also rated themselves the least arrogant people in Europe. Maybe they are just the most self-obsessed? Read more
♦ Martin Wolf argues that forcing the eurozone to mimic Germany’s path to adjustment makes stagnation likely.
♦ US intervention in Syria becomes more difficult with time because of sequestration. “If you ask me today, we have forces that can go,” says General Ray Odierno, the army chief of staff. “I think it will change over time because the longer we go cancelling training and reducing our training, the readiness levels go down.”
♦ Researchers have identified two dozen 15,000-year-old “ultraconserved” words, which suggest the existence of a proto-Eurasiatic language that was the root of about 700 contemporary languages.
♦ Film director Ann Shin discusses her film about the human smugglers who extract people from North Korea and why so many of them are women. Read more
Austerity appears to be an increasingly dirty word in Europe. The past week alone has seen European Commission President José Manuel Barroso, Bill Gross of Pimco and Italy’s new prime minister Enrico Letta calling for an easing of austerity.
Spain’s surpassing of the 6m unemployed mark on Thursday added fuel to the debate. But even in Germany, the austerity police of the eurozone, cracks are beginning to show ahead of the elections with the emergence of an anti-euro party.
a) Are there any austerians left? Yes. Here are some of them.
- UK: Chancellor George Osborne hit back at criticism over his apparent excessive austerity by claiming there is no other alternative. And after a tough week when he was criticised by the IMF over the excessive pace of his austerity programme, this week has brought better fortunes for his stance as figures showed a lower deficit and the economy expanded 0.3 per cent in the first quarter.
- Germany: Chancellor Angela Merkel’s view as articulated this week couldn’t be clearer: “I call it balancing the budget. Everyone else is using this term austerity. That makes it sound like something truly evil.” Germany is the only eurozone country with a 2012 budget surplus.
- US: The situation here is different because of sequestration, which triggered automatic spending cuts and tax rises. And the White House faces a July deadline to raise the borrowing limit or default on its debt.
- Latvia: The tiny Baltic state is emerging from a state of uber austerity – part of its bid to join the euro later this year – and it could end up being seen as a poster child for successful deficit cutting implementation, with real growth of more than 5 per cent in 2011 and 2012, despite the broader recession in Europe.
- Spain: The push by Europe’s fourth-largest economy to cut spending and raise taxes has led to record unemployment topping 6m for the first time in its recent history. The government of Mariano Rajoy announced economic reforms and structural measures on Friday.
- Italy: The technocrat government of Mario Monti has been steadfast in carrying out fiscal consolidation. All eyes will be on Mr Letta, who has already said: “Europe’s policy of austerity is no longer sufficient”. Read more