By Gideon Rachman
Europe woke up on Monday to a lot of headlines about the humiliation of Greece, the triumph of an all-powerful Germany and the subversion of democracy in Europe.
This week Greece finally put a figure on its demand for war reparations from Germany – €278.7bn as compensation for the death and destruction visited by the Nazis during the war. Opinion polls suggest that this gambit is widely popular in Greece. But by bringing this issue up now, the Greek government may have made a serious miscalculation that could contribute to the country’s disorderly exit from the euro.
Greece’s reparations demand comes at a time when the government in Athens is running out of money and its creditors are running out of patience. The country is likely to need a new bailout package this summer. By putting the reparations issue on the table, the Greeks may feel they gain extra leverage – as well as the possibility that they will actually get debts written off, rather than simply extended. But they have also significantly raised the risk that the Germans will simply walk away from the table altogether – forcing Greece into a default and a disorderly exit from the euro. Read more
Is Bild going soft on Greece? After weeks spent hammering Athens over its debt-fuelled profligacy, the top-selling German tabloid has laid out the welcome mat for Greek prime minister Alexis Tsipras for his first visit to Berlin.
“Willkommen in Deutschland, Herr Tsipras,” said Bild in a front page banner headline published hours before the radical leftist was due to meet chancellor Angela Merkel over dinner later on Monday. And just to make sure the visitor got the message, the paper filled the bottom half of its front page reproducing the headline in Greek. Read more
The eurozone is mired in a stand-off over Greece’s government debt which, at roughly 175 per cent of gross domestic product, is the highest in the currency union. But new data released on Tuesday make one wonder whether member states should stop worrying about Athens’ fiscal woes and start being concerned about… Berlin’s. Read more
A top adviser at the European Court of Justice has said that the European Central Bank’s crisis-fighting Outright Monetary Transactions programme falls within policy makers’ mandate.
Q: That’s pretty much a green light for quantitative easing next week isn’t it?
Most euro area governments and investors are breathing a sigh of relief after Wednesday’s preliminary judgment from the EU’s highest court in favour of the European Central Bank’s sovereign bond-buying programme – the 2012 initiative that helped to bring the euro crisis under control.
But governments and investors, in and outside Europe, should keep in mind that the danger of a bitter, protracted struggle over EU constitutional law will now go up. This would pit Germany against other power centres in the EU. Read more
• Syria’s young girls are facing assault, early marriage and being forced into prostitution as the refugee crisis spirals. The IRC, selected by the FT for its 2014 seasonal appeal, is seeking to protect and empower them
• A motley crew of ex businessmen, academics and pro-Russia activists has seized control in Ukraine’s rebel republics Read more
Like anyone familiar with the French definition of budgetary discipline, I didn’t spill my coffee in shock on Wednesday morning when Michel Sapin, finance minister, disclosed that France wouldn’t bring its public finances in line with EU-set targets until 2017 – two years later than previously agreed.
From the day of the euro’s launch in January 1999, it’s never been any different in Paris. No grande nation worth its salt would balance its budget on the orders of some bumptious bureaucratic bean-counter in Brussels. Read more
US-German relations strained over new spying allegations
Germany has summoned the US envoy following allegations that an agent working for Germany’s intelligence agency was spying for the US. Gideon Rachman is joined by James Blitz, former security correspondent, and Jeevan Vasagar, Berlin correspondent, to discuss what this means for already troubled relations between the Obama and Merkel governments, and how the two nations can resolve their differences in order to tackle the numerous shared geopolitical challenges they face.
Watching the World Cup from Brazil – as I did last week – it was impossible to miss the huge weight of expectations placed on the national team. Half the country – including some toddlers and dogs – seemed to be wearing the yellow jersey of Brazil. Some Brazilians told me that the players would use that pressure to inspire themselves to greater heights. That always seemed doubtful to me. And last night, we saw the opposite happen: the Brazil team crumbled under unbearable pressure and lost by an unthinkable amount. Read more
Today Germany and France will meet in their World Cup quarter final in Rio de Janeiro, the latest episode in one of Europe’s classic football rivalries. But off the pitch, a different duel is gripping the continent’s political scene: the one between Germany and Italy. Read more
There is a widening gap between Germany and its two principal English-speaking allies, the US and the UK, which ought to concern everyone who believes in the enduring need for a transatlantic alliance of democracies. Read more
Germany’s allies may think that Berlin is slow to engage with the rest of the world – and show some political muscle commensurate with its economic weight.
But the German public has the opposite view: in an opinion poll published on Tuesday, only 37 per cent support a more active German foreign policy with 60 per cent against. Read more
Do last week’s German constitutional court ruling lambasting – but failing to overturn – the ECB’s crisis-fighting bond-buying programme and Matteo Renzi’s ousting of Italy’s prime minister Enrico Letta have anything in common?
In the view of many ECB critics, particularly in Berlin, the two are not only related, but one may have caused the other. Read more
German Constitutional Court (Matthias Hangst/Getty Images)
We don’t like what the European Central Bank is doing – but if someone is going to drop a nuclear bomb on the eurozone, it won’t be us. This seems to be the main message in today’s judgment from Germany’s constitutional court on the ECB’s Outright Monetary Transactions programme.
The OMT is an initiative aimed at saving the eurozone with large-scale ECB purchases of the bonds of governments vulnerable on financial markets, in return for a commitment to deep-seated economic reforms. Germany’s Bundesbank and much of the German public have never warmed to the OMT – even though the programme has never actually been used and, some experts think, never will be.
So the German court’s judgment will come as a relief to Mario Draghi, the ECB president, and all those who hold that the OMT, unveiled in August and September 2012, is the single most important reason why Europe’s monetary union no longer appears in mortal danger. But mixed with this relief will be a feeling that the German court’s judgement is not entirely helpful – and that some of its arguments are not particularly well-founded. Read more
(Matt Cardy/Getty Images)
“A spectre is haunting the world: 1914.” So writes Harold James, a professor of history at Princeton in the latest edition of “International Affairs”. Professor James is certainly right that newspapers and learned journals are currently full of articles comparing international politics today with the world of 1914. I have written a few articles on that theme myself. Now, perhaps inevitably, there is a backlash. Joseph Nye, a professor at Harvard, has just published a piece on the 1914 analogy for Project Syndicate that notes: “Among the lessons to be learned from the events of 1914 is to be wary of analysts wielding historical analogies, particularly if they have a whiff of inevitability.”
So does the 1914 analogy actually make sense? Read more