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Works and Days

The New Old German Problem

May 22nd, 2010 - 7:48 am

Reflections on Germany

Munich — I’ve been walking the last two days through Munich. Much of the city core was bombed out by the allies by spring 1945. Yet today there is little evidence of such destruction. The museums are among the best in the world, the streets and parks spotless, the infrastructure superb, and the people as hard at work as ever. To walk an urban street in Germany is a different experience from say in Athens or Istanbul — traffic follows law, pedestrians are respected, horns are used rarely, trash is absent. In other words, things work and work well.

Such observations sound stereotypical these days, but to even the casual observer the difference between life in Germany and much of the eastern and southern Mediterranean seems far greater than the divide between a Minnesota and Mississippi. For someone who has lived in Greece and occasionally visits Germany, it becomes increasingly clearer each year why the European Union won’t work. Germans work and create wealth. Yet  under the present system, they do not receive commensurate psychological rewards — and they increasingly receive insufficient material compensation as well.

And history shows us that an unhappy Germany is a very dangerous thing indeed.

Memory Lane

Let me explain by a brief historical detour.

After the unification of Germany in 1871 and its subsequent alliances over the next decades with Austria, Europe was not sure how to handle its powerful German-speaking center. In the twenty-first century it is politically incorrect to suggest that culture matters, though most privately grant that the German work ethic, cohesiveness, and competence all lead to economic and financial clout that eventually ends in superior political — and ultimately military — power.

In the last century and a half, there have been all sorts of ways to check that German dynamism from spilling over its borders. The idea of a two-front British/French/Russian alliance was supposed to dissuade Germany from expanding its sphere of power either westward or eastward. Nonetheless, wars usually followed, and it was no solace to the millions who perished in World Wars I and II that such anti-German containment, largely aided  by the entry of the United States into two wars, eventually led to the defeat of Germany — for a time.

Try, try again

After the war, a divided Germany,  shared European fear of Soviet communism, and a nuclear France and Britain all in various ways ensured there were supposed to be no more worries about Germany for a half-century.

But with the fall of the Berlin Wall, and the implosion of the Soviet Union, a newly ascendant Germany — once the costs of East German unification were absorbed — was supposed to be integrated into the new utopian European Union with it common currency, the euro.

That is, the unstated idea was that natural German economic strength could be harnessed through new tariff-free markets for its export-driven economy, whose goods and services would help bring eastern and southern Europe up to northern European standards of living. Germany would be captain, but still a team member, and all would pay homage to its star for leading the team to victory.

So cash-flush German banks loaned the European poorer nations easy money to buy all things German. The EU would both guarantee the debts, and reap the benefits at large — as Greece, Italy, Portugal, and Spain would begin to see their infrastructure and lifestyles match those of France, Germany and the Netherlands. Southern siestas, strikes, tax evasion, and low worker productivity would all be nullified by northern European largess.

The Supposed End of History

As a result, instead of the old deadly inter-European rivalry, for a while a continental culture did indeed emerge. Prosperous Europeans from the Mediterranean to the Baltic  embraced socialism, utopianism abroad, childlessness, agnosticism, and a fashionable anti-Americanism, ensuring no more 19th-century nationalism or 20th-century wars.  At least all that was what we were lectured about for the last twenty years by European chauvinists and dreamy American liberals.

Yet such dreams were always predicated on some dubious propositions.

Think of an Americo

First, there has never been any sort of unified currency without commensurate political unification. Imagine a NAFTA-like Americo, a new currency that would try to absorb the American and Canadian dollars with the Mexican peso. Well, enough said.

Lifestyles and culture are not quite the same in Yucatan and Toronto. In such unworkable financial systems, the poorer leach off the wealthier and find plenty of rationalizations why they should. In an analogous example, the president of Mexico just left the United States, after making the political and media rounds, lecturing us on why his own corrupt government has some sort of divine right to export half-a-million of its own poor to the United States. Imagine Mexico’s audacity had we the same currency.

An Incredibly Shrinking U.S.

Second, the natural inclination of the United States is not international engagement but a sort of isolationism. The Cold War interrupted that tradition, but slowly we are seeing it return under Obama, especially in the unhappiness over Iraq and Afghanistan and a desire for more social spending and entitlements at home. I don’t think our first Pacific President wants to, or is competent and credible to, advise Europe about much of anything.

Yet we sometimes forget the third leg of the old NATO equation: America in, Russia out – Germany down. Without fear of a Russian Empire, and with America turning inward, it is not all that clear there is any force that cares much to worry about German restlessness. A broke Europe is not about to turn to a broke Britain or a broke United States to complain about German financial unease. And Germans are increasingly not going to listen to either if they did. NATO exists only because of American arms and I suppose German money. But it is not doing well in Afghanistan, and most of its members will soon be cutting back on what little they now spend on their militaries.

In short, what will happen with Germany when it is lectured by the French, insulted by its debtor dependencies in southern Europe, and starting to become angry that only its own work ethic and productivity — not some grandiose platitudes about the EU — keep Europe going?

The Unthinkable?

Very soon German workers are going to grasp that all the financial reserves they piled away the last two decades from not doing what a Spain or Italy did are essentially gone. Someone in Munich worked 40 hours a week until age 67 for someone in Athens not to — and for someone in Athens to demand that someone in Munich do so or else. The idea that nations like Greece, both overtly and implicitly, insult nations like Germany has no basis in historical terms.

In short…

Even European bankers now claim the euro is suspect. The European Union may well devolve into something other than its present form within a few years.  NATO is an alliance mostly in name. Germany is angry. So far all the traditional restraints upon its pique — allied military rivals on its two borders, a divided country, fear of a nuclear Soviet Union, incorporation within the EU and NATO — are either nonexistent or increasingly problematic.

If it should choose, Germany could go nuclear in six months, its arsenal reflective of a country that makes Mercedes and BMWs. That is not so wild an idea in an age when unstable nations like Iran and North Korea boast of their arsenals and their aggression, while others such as Turkey and Brazil flout U.S. faculty-lounge sermons on non-proliferation.

If Iran should go nuclear — and I think it will within a year or two — we should imagine that a Brazil, Egypt, Saudi Arabia, and Syria would too. As the European Union collapses, as third-rate nations become nuclear, and as the United States abdicates its postwar role in ensuring the safety and security of the West, why would Germany continue to subsidize southern Europe while receiving mostly blame for its efforts, while its airspace would be in theory vulnerable to the likes of a theocratic Iran?

Back to the 19th century?

In a sane world, a financially solvent United States would now step up to the plate, reassure Germany of both its long-standing financial and military support, and seek through its friendship and alliance to deflect any natural German inclination to translate its economic power and present seething into something other than mere anger at the EU.

But we don’t live in a sane world. U.S.  finances are following the Greek example. President Obama either does not understand the West or perhaps does not care to.  To the new America, a Germany is no different from a Pakistan or Venezuela, just another member of the international community, no better or no worse than any other. Our commitment to NATO and the U.S. defense budget will soon be  redefined, as even more  entitlements along the lines of  the recent trillion-dollar health care plan are envisioned.

In other words, in such a vacuum, very soon, if we are not careful, we are going to have a German problem — again.

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