Domestic Policy. Germany.

GERMANY RAISES FURTHER THE COMMON
EUROPEAN FRAMEWORK
Crisis of the Euro. Statements by German
Finance Minister Wolfgang Schaeuble and
Chancellor Angela Merkel

By Rolando Arturo Leiva
20 november 2011

Heidelberg, (Germany) - Despite being Germany, -in its position towards Europe
and its common institutions- sometimes interpreted in differents and often in
contradictory ways, during the current crisis of the Euro, Germany was still trying to
act as a contry mainly orientated to bolster the common european institutions-, as
stated in the last week two of its most important leaders-, and in doing this, risking
also sometimes the disagreement of the German public who has been expressing
constantly criticism of the commitments and obligations has Germany regarding the
European Union.

In an interview with the French newspaper LE MONDE and with the NEW YORK
TIMES, a key figure of this crisis, German Finance Minister Wolfgang Schäuble,
according to LE MONDE, has placed, all its political weight in the balance, to
sustain the idea that Germany must "accept further European integration."

This as "our great mission" says Schauble. The current crisis of the Euro means, in
his opinion, -and from the German point of view-, is only an opportunity for Europe to
advance further "because in the globalized world of the 21st century, -explains
Schauble-, we need a strong Europe capable of acting on the world scene".

In the German Finance Minister’s opinion, the conclusions that can be drawn from
the current crisis of the Euro, are consequently, first, that it is not enough -according
to him-, to form a common monetary policy -such as the one that led to the creation
of the Euro, a money shared at the moment by 17 of the 27 Member States of the
European Union creating the so-called Euro-Zone-, but it is also now required a
common fiscal policy of the whole Member States of the European Union, strengthing
the Convergence criteria between the Member States, but not -says Schäuble-, to
necessary getting involve in the development of new treaties, but modifying only
some specific points of the existing treaties, especially the Lisbon Treaty, and
allowing with this more effective mechanisms in order to increase the respect of the
collective commitments made by the countries included today in the Euro-Zone, and
with also a common fiscal policy, together with improving competiveness of the
different European economies.

That is the way -thinks Schäuble- to show to world investors "that the Euro is a
credible money, that all Member States have assumed the compromise to transform
the Euro in a reserve currency for the whole world, and a stable money,
trustworthy and able to last in time. "

According to Schäuble, two factors explain mainly the origing od the current crisis.
On one hand, the "architecture" of the Euro which led to create a common currency
without a common fiscal policy, and secondly, the inadequacies of the Stability Pact
which did not ensured the full economic convergence of every country belonging to
the Eurozone.

As Germany and France have proposed a tax to stock transactions, meaning that
large sums of money will entry into the coffers of the European Union, money that
can be used later to fund the tax liability of some States-, -Schäuble argues, that the
tax "is necessary and credible" and the only reason why some countries oppose
such a tax, -within them are England and United States, arguing that such a tax
"would not immediately be a worldwide tax"- the point, says Schäuble, is not a
reason to delay an innovative policy if it is needed, especially, taking into account the
role currently plays the abusive speculation in the crisis of the sovereign debt
problem in Europe, which the tax issue is pretending to discourage and if that
agreement is not reached at the level of the 27 countries of the European Union,
Schäuble said, it should be seek, at least within the 17 countries sharing the Euro.
As near 70% of German citizens consider that Greece has no longer a future in the
Euro Zone according to LE MONDE, Schäuble, however, says, he in any way shares
this view arguying that "Germany will do everything possible and until the end for
trying Greece to remain in the Euro Zone. "

Answering to LE MONDE, Schäuble states that instead of preparing a supossed
division of the Euro zone, Germany "certainly do not want it" being its goal instead
just to maintain the cohesion of the Euro Zone dispossing more effective
mechanisms to respect their commitments, also a common fiscal policy and
improving the competitiveness of the economies of the countries belonging to the
European Union.

Most Germans -with the exception of a small party with almost none figuration- are
not eurosceptics, - Schäuble argues- defending his view that if the election of the
President of the European Commission is made by universal suffrage, -which
nowadays is proposing currently his party, the CDU-, that would allow Europe
definitely to appears as a world new political entity.

In turn, making a speech at the same party, CDU, in Leipzig, German Chancellor
Angela Merkel, adressing an auditorium, where behind a gigantic stage was written
the legend Germany-Europe, was quoted as saying also that today’s Euro crisis, is
the more serious crisis Europe has lived since the 2nd World War, repeating, to the
applause from the audience, "Our destiny is Europe."

According to the German Chancellor, the survival of the European Union, similarly,
"deserves all our efforts, because if the Euro fails, Europe fails."

The German position around specific issues, generally has been also identified as
something orientated to emphasize the so-called budgetary discipline or the
implementation of an austerity policy, however, such a policy has been very
unpopular in countries affected by the sovereign debt crisis such as Greece, Spain
and Italy , equallying it to cuts made in public expenditure. Germany in turn argues
such a policy means mainly the intention to avoid additional debt policy either at the
level of individual countries, or at the countries comprising the European Union as a
whole. If the European Central Bank for example buys more Eurobonds, will
increase the States fiscal deficit, -argues Germany- and would go beyond the
mandate the European Central Bank has. The main goal -argues Germany- is
together with the strengthing of this budgetary discipline, to carry out specifics
amendmenst to some treaties, thus fullfilling better the criteria for convergence
between policies of the Member States of the European Union, and having further
legal tools to ensure that all the countries or Member States visualize clear rules that
every country must comply. This criteria correspond largely to clauses of the
existing Treaties. This not being implemented -thinks Germany- could now truly
weaken the European construction .-

Rolando Arturo Leiva
Heidelberg, Germany
20 november 2011

(Una versión de este artículo fue publicada en la News Letter - “InterEuropa Reporte”
- “La Crisis del Euro” noviembre 2011)