Germany's Dangerous Obsession

PARlS ) While the German Christian Democratic Union [ CRU] and her sister's party, the Christian Socialist Union. [COU] CSU, they're forming an unpredictated Gimajka Coalioniʹ with the free Democrats [ The FDP and the green party, the rest of Europe with anxiety, are waiting for the governing programme, which will be the result of their negotiations.

The dangers of Europe are great because these are not ordinary times. The growth of economic nationalism, which increased security threats, and with the ongoing refugee crisis, has made collective answers necessary. China is getting stronger and stronger, and President Donald Trump's administration has made clear its contempt for the European Union and its doubts in Germany's economic force.

The EU is being tested by the Brexit process, and by the troubled governments in Poland and Hungary, two countries that, says Constante Stelzenmuler, are enjoying the benefits of EU membership but are ignoring their obligations.

In this context, the election of Emmanuel Macroni as president of France in May was a relief to Germany. Yet, Macron has placed Germany in a uncomfortable position following his EU reform proposals. Calling for a defence fund, for a tax harmonisation, and for a joint Eurozone budget, Macro is questioning status quo- Europe.

The question now is whether Europe's largest and most prosperous country will hold leadership in these difficult times. Each party in the coalition talks has very different prospects on the table. As for European issues, Chancellor Angela Merkel of the CDU, who was in power for 12 years in a row, will bring the continuation of the policies up to. But the most conservative CSU party has been pushed to the right by the significantly increased populist party AFD [Alternative for Germany].

As for the other two parties, The FDP has adopted a tough line to Europe. Its leaders have suggested that Greece should leave the euro, and that EU mechanisms dealing with troubled economic countries must be removed. The green party, on the other hand, requires deepening Europjan integration; but that is not their initial priority, and they are the smallest party on that table of talks.

The government programme could reflect the suspicion that other EU members want to solve their problems with German money, but not through internal reforms. German politicians and thinkers assess each proposal for EU reforms through a distributive prism. Schemas that are not intended to result in structural transfers in a routine are expected to confirm that no expenditures will be made for other EU members.

For example, the Germans see a common budget not as a way to finance common goods such as research or infrastructure, but as a means to force Germany to cover other countries' expenses. Similarly, the unemployment issue is taken as a scheme to get the Germans to pay for the Spanish unemployed or French workers. And a deposit insurance program for banks is seen as a way to get prudent German depositors to pay for unturned loans in Italy.

Perhaps each of these concerns is legitimate. All proposals must be considered to ensure that no abuse will be done. Europian solidarity is not a one-way street.

But, at the same time, German leaders need to know that their exclusive focus on distributive effects is poisonous. They should remember the moment, in 1979, when British Prime Minister Margaret Thatcher marched to the European summit and said, “Mey return my money.” The same logic was manifested 40 years later during the Brex campaign, when EU integration politicians lied that the departure would return the money to the national health service.

Why is Germany so obsessed with fear of paying too much? The EU budget has a lot of room for criticism, but it can hardly be said that it treats Germany unjustly. Germany may be the biggest contributor, but that's because of the big economy it has. In proportion to national income, countries like Belgium, France and the Netherlands also contribute to the income they receive.

Germany fears European stability mechanisms ESM, which serve as secret transfer channels, has no basis. Yes, ESM benefits from low borrowing conditions, which are passed on to borrower states. If Greece cannot pay its debt, ESM shareholders will suffer the consequences; and this danger is not marked in the interest rate Greece pays. But, so far, ESM has achieved a lot of profits, and any losses it suffers will be distributed to all its shareholders, including Italy.

Others in Germany are also talking about the so-called “Targatet2 balances”, which marks the surplus and bilateral shortages of national central banks Vis-a-vis European Central Bank. Hans-Werner Sinn of Munich University, for example, argues that this system has become a channel for covert operations in order to benefit debt states in southern Europe. True, in September, Bundesbanka had an excess of 878 billion euros [$1.3 trillion], while Italy and Spain fell deficits to 432, respectively, 373 billion euros. These positions reflect the degree to which the official flow is still being replaced by the private leak.

Yet, this agreement has cost Germany no single euro.

It will always be the interest of political parties to respond to fears their electorate has. But politicians also have a duty to show voters when their fears are unfounded. Europe needs Germany to veto harmful proposals. But it also needs Germany to overcome its narrow obsessions and to offer leadership.

With current coalition talks, the spring leaders have an opportunity to offer new global developments that would have major implications for Europe and Germany. They must decide whether it is dangerous to do nothing or whether to take action. Someone hopes for a government that will become more available in providing solutions. Projekt Syndicate