The German Council of Economic Experts published a small study called The balance between own responsibility and common action for a strong Europe. No one knows naturally what the German politicians will take from it, but it shows once again that France should not be too naive on her capacity to disrupt conservative lines in Germany. In fact many points of the paper are reasonable, but still very far from Emmanuel Macrons’s ambitions for Europe and certainly not sufficient to give Europe the legitimacy she starts to really lack.
The authors begin immediately with the well-known German credo, no common governance can be seriously envisaged before a much stronger convergence among the various states is achieved. Only then shall we be in a position to deepen the European project and launch further integration process. Please read certainly never. For the big pleasure of the German conservative demagogy. Germany could only integrate with 27 German clones, and with nobodyelse.
I personally doubt this opens sound perspectives for Europe. I think Germany would better defend her position by proposing a framework, which would allow integrated policies for those having done the necessary reforms. The framework would exist, i.e. would be real and available so long some criteria would have been met. A much fairer and convincing approach in my view.
Our experts add that you cannot live permanently from a loose monetary policy which substitutes the structural reform policies that the states are unwilling to launch. Which makes sense. However it is naturally pity that they do not recall that the true reason for this ECB policy lies in the fact that the intergovernmental Europe was totally unable to address the financial crisis in 2012. The ECB had indeed to substitute a fully inefficient and pitiful interstate governance in Europe, and was indeed the only European institution succeeding in what it wanted to achieve. The reason of this success lies certainly in the fact that the ECB is the only European institution being organised on a federal principle. It does not make me the big defender of an eternal loose monetary policy, but it is totally misleading to keep silence on the reason why the ECB had to act as it did, and to be silent on the total failure of our current interstate Europe.
The authors state that the crisis showed that the eurozone architecture was built on promises, which were never respected. Well, did we really need the crisis to notice that from the very beginning the rules were never respected? Should we recall that even Germany did not comply with the Maastricht criteria when entering the Eurozone? And underline that even today it does not comply with them? We are all guilty of our neglect, and we are even guiltier for not having consequently enough changed our behaviours since the crisis. But the truth is that the Euro was from the beginning much more a political construction than a pure economical one. And we still miss the political instrument to manage this political construction seriously.
It is advocated in the paper that only the national leaders have democratic mandates to conduct true economic policies. I could agree on this, but it is a bit short: this is exactly why we need a democratic and federal Eurozone, in order to give a real democratic legitimacy to the European policies we need.
Our authors admit that the German politics fail to envisage and define the public investment policy the country would need to further grow in the future. They say this failure is general, not only at the federal level but also at the local one. They even wonder if this failure does not go beyond politics and touch some German cultural features, some risk adverse realities, which render innovation in Germany difficult. They say we cannot substitute this fact by a supranational investment policy. Why? What does sustain this gratuitous statement? Is this not on the contrary a big help that Europe could bring to Germany?
All this being said there are some very reasonable suggestions in this paper which I would wish to see quickly implemented, such as:
- To see less exceptions to banking bail in clauses, since the last episodes in the Italian banking crisis showed that unfortunately nothing really changed in this field,
- Put an end to the privilege of the national public debt in the balance sheets of the banks of the respective Member States,
- Be serious with the Banking Union, have a real European supervision mechanism and real European insolvency mechanism, then a European deposit guarantee mechanism.
But these very useful technicalities will not solve the Eurozone problems and address the frustration of the European crowd. I would be very pleased to see these logical points being finally implemented, but they will not give a second life to our Europe.
The conclusion of this report is unfortunately a bit provocative. The 4 authors cannot resist enjoying a tirade against the so-called transfer union, and unfortunately fall into the Pavlovian reflex of the German demagogy. Macron incredibly succeeded in killing the French anti-European demagogy, who shall be able to address the German eurosceptic demagogy? Schulz would have already demonstrate his capacities in this field if had this skill. We all know that this does not belongs to Mrs Merkel’s character. However she already showed many times that she knows how to play with German contradictions and discreetly master them. We shall see. In any case the game is definitely not over, and far from being won.
Then we still need the inspiration of Jean Monnet : I am not optimistic, I am determined!