How Merkel caved to Macron

Redistribution will not cure Europe’s ailments.

How Merkel caved to Macron

Josef Joffe serves on the Editorial Council of Die Zeit in Hamburg. He is also distinguished fellow of Stanford’s Hoover Institution.

HAMBURG — Once the uncrowned empress of Europe, Angela Merkel has finally caved to France’s Emmanuel Macron.

Ever since Macron captured the Elysée in 2017, the German and French leaders have been locked in silent combat over Europe. Merkel stood for reformist vigor and fiscal virtue: no bail-outs, no eurobonds and keep your hand out of our coffers. Macron preached spending, redistribution and centralization.

Now it seems the coronavirus crisis has delivered victory to Paris. Macron and Merkel’s joint unveiling of a European recovery fund worth half-a-trillion euros to bail out the sinking EU economy will remake the bloc in France’s image, turning Europe into a continent-sized welfare state.

The new recovery fund signals an unprecedented power shift from 27 sovereign nations to the European Commission. This unelected body will borrow hundreds of billions and, in the name of “European solidarity,” hand them over as gifts, not loans.

How will the mammoth debt be repaid? We’ll worry about that later. Who would feed at the trough? A large part will go to the usual suspects, known as “Club Med” or the “Olive Belt” led by France — a pre-destined beneficiary of the coming cash bonanza — and running from Lisbon to Madrid, Rome and Athens.

As Hamilton, so Macron: The idea is to spread the wealth and fatten the center.

This power shift recalls America’s fabled “Alexander Hamilton moment” of 1790 when the Feds assumed states’ debts piled up during the Revolutionary War. The first Treasury chief’s generous gesture came with hardball politics, laying out the road to ever-more power for Washington.

As Hamilton, so Macron: The idea is to spread the wealth and fatten the center. Add Merkel who muses: “Alone, the nation-state has no future.” Onwards and upwards for the United States of Europe.

There are good reasons however, why such a move has been resisted until now.

As ostensibly compelling it may be, the U.S.-EU analogy falls flat. The differences are glaring. Unlike the 13 ex-colonies, the EU-27 cannot rely on a common history, language and culture. They’ve been around, as separate identities, since the Roman empire. After crystalizing into nation-states circa 1500, they have fought to the death whoever tried to unify Europe under his knout, from Habsburg to Hitler.

Today, war may be out, but sovereignty is still in. France will not cede the scepter to Germany, and vice versa. The rest will not defer to the duo, nor to Brussels. Since the start of the pandemic, in fact, the nation-state has reasserted itself, as countries close borders and coddle sickly national industries.

And then there’s the harmful incentives the recovery fund creates, given the eurozone’s current composition (and the varying willingness to reform among its members).

Jaundiced economists warned from day one that a common currency requires a real state based on nationhood and obligation. Absent such overriding attachment, how could Brussels take from Peter in Berlin to give to Paolo in Rome?

Under the euro, capitals must part with sovereignty over economic policy, a pillar of the nation-state. The price is cruel. States can no longer devalue to stay competitive, for francs and liras are gone. Instead, they’re told to stop splurging and borrowing to buy off powerful domestic interests like public-sector unions. They have to get their house in order with painful market reforms that replace short-lived relief with solid growth.

France and Italy, No. 2 and No. 3 respectively in the EU’s GDP ranking, have not swallowed the bitter medicine. Instead, they have continued to rack up debt along with the rest of the Olive Belt. After all, why swallow it when you know you no longer have to pay a hefty devaluation premium under the solid-gold euro? Pocket the cheap money instead.

As deficits and debits soared, the logical next step was a “transfer union.” Eager to get into the EU kitty, they preferred the dole to more debt.

Meanwhile, Austria, Holland, and the Scandinavians gathered around the German CFO to insist on reform-minded fiscal discipline. The result has been a 20-year power struggle, in which communal virtue kept grinding up against national egotism.

Merkel’s new tune is not as revolutionary as it sounds | Andreas Gora/Getty Images

Now, suddenly, Merkel has openly broken ranks, sacrificing Teutonic rigor to Macron’s Gallic ambitions. But if you look to the euro’s tortured history, this is not all that surprising: For years, profligacy has trumped prudence.

Ever since European Central Bank chief Mario Draghi famously vowed in 2012 “to do whatever it takes to preserve the euro,” the ECB has dodged the treaty constraints. And behold: At each point, those brutal, arrogant Germans fussed and fumed — and then paid up.

The “Club Med” countries got the message: Berlin, which profits most from integration, will not let the project sink.

Merkel’s new tune is not as revolutionary as it sounds; it just formalizes routine practice. Sure, the so-called frugals are not amused, but they will be bought off. The recovery fund will kick in, as have all the other rescue mechanisms since Greece went bankrupt.

The harsh truth is that a mountain of free cash will not be enough to cure Europe’s ailments.

So, let’s hold the applause for the Franco-German “engine.” Its recovery fund is where short-term relief trumps Europe’s long-term needs. Why will national governments go up against entrenched interests and pay a murderous political price at home to clean up their economies if they can haul in hundreds of billions for free?

The harsh truth is that a mountain of free cash will not be enough to cure Europe’s ailments. Those predate the coronavirus pandemic.

For Europe to rise again, it will have to do more than transfer riches from north to south. The cure is not redistribution, but restarting the engine of growth.

Don’t count on Macron, who has been foundering against the armies of the status quo since he took office. Nor on Merkel, who has given up coaxing the EU into market-driven rejuvenation.

Source : Politico EU More   

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Walking the Wall: A lockdown tour of Berlin boundaries

One form of social distancing reveals another.

Walking the Wall: A lockdown tour of Berlin boundaries

BERLIN — As authorities in the German capital put the brakes on public life in March, I decided to try and aggregate my daily walks into the entire 160-kilometer route of the former Berlin Wall.

Social isolation and Cold War history rolled into a monthlong mix of stroll and slog around the city outskirts.

Only a small portion of the route runs through downtown Berlin, via all the tourist draws that were eerily empty during my walks. The vast majority traces the border between the city and the surrounding state of Brandenburg via forests, fields, lakes and sleepy suburbia.

In the three decades since the Wall fell (longer than it stood in place), most of the structure itself has disappeared, memorial rock chipped away chunk by chunk. Instead, there’s the route of a former patrol path through the reforested death strip encircling the western perimeter of Berlin. It’s maintained as the so-called Mauerweg for cyclists, and sometimes serves as overflow parkland for those living on the edge of the city.

I started at the old Sonnenallee border crossing (which bears no resemblance to the Wall-era setting of the popular 1999 German comedy film of the same name) walking alone, clockwise, under Berlin’s southern belly, equipped with a camera phone and a cycling guide by Michael Cramer, a former Green MEP who made the Mauerweg his legacy in local politics during the 1990s.

1. My starting point on the Mauerweg at the old Sonnenallee border crossing point in March.

Walking the Wall would be a stopgap until the pandemic passed, I thought.

But just as I reached the waterworld that is Berlin’s upscale, lake-filled southwestern suburbs, Chancellor Angela Merkel appeared on national TV, outlining new restrictions to daily life on March 22. That put a monthlong pause on roaming any further than the supermarket.

Fast-forward two months: As I completed the route, the German capital reopened its restaurants and beer gardens, though the socially-distanced economy is still very much in a trial phase. Without anyone there to take a selfie, the plasticky views of Checkpoint Charlie and the East Side Gallery make them feel more like flimsy film sets than sites of profound historical importance.

2. Looking west across the Teltow Canal. For this stretch, the Wall trail is sandwiched between the waterway and a highway.

Walking the whole route in 2020 is apt, as it is mostly based on local administrative borders dating back to 1920, when the Greater Berlin Act expanded the city’s boundaries.

The Wall left multiple exclaves of West Berlin stranded in East Germany, along with various loopbacks and a “duck’s beak” of the East inexplicably jutting into the West. Kladow, already on the western shore of the Wannsee lake, was in West Berlin, but Groß Glienicke, with which it shares another lake, was not.

3. A hidden belt of green land between the edge of Rudow in the former West Berlin and the airport town of Schönefeld in the old East Germany is now home to livestock.

Although the Wall itself is gone, the stories of the 140 lives lost directly as a result of its terror punctuate the route. But there are also more colorful tales, of train driver Harry Deterling who accelerated his passenger service to escape into West Berlin (with commuters on board) in 1961; of Erwin Shabe, a boy who got an armed escort to school after falsely claiming East German soldiers were obstructing his route from the tiny exclave of Eiskeller; and of farmer Helmut Qualitz, who smashed a hole in the Wall with his tractor in 1990 to restore an old link between two communities.

In the present day, there remain local disagreements over efforts to restore lost infrastructure links. The expansion of the old Dresden railway to offer express airport trains is controversial for locals in the south of the city who have grown comfortable with unobtrusive local services that don’t rattle their windows. Up north, plans to reroute the old Heidekrautbahn line have sparked a three-way fight over station-naming rights between suburbs. By my count, the entire Mauerweg route passes more than 10 rail tracks (plus one or two ghost lines) radiating out of the city like spokes on a bicycle wheel.

Even with division long gone, the work to reweave Berlin’s urban fabric still isn’t finished.

4. Gropiusstadt, one of West Berlin’s utopian social housing projects. The complex of apartment blocks is named after Walter Gropius, its architect and founder of the Bauhaus School.


5. Mid-March flowers sprouting through a young reforested track on the former death strip near Lichtenrade.


6. Much of the perimeter of Berlin’s southern boundary faces out on to old drainage fields, especially around Marienfelde.


7. The A115 highway, once the busiest East-West border crossing but a ghost autobahn just hours before Germany enters lockdown on March 22.


8. Around the old Stammbahn railway, Berlin’s first train line. Now forested track.


9. Steinstücken was for a time an exclave of West Berlin, so the allies maintained a helipad. Today, this is memorialized by a helicopter blade installation next to a climbing frame helicopter, closed due to the pandemic.


10. Griebnitzsee, the entrance to Berlin’s waterworld of lakes and forests around its southwest. Here, U.S. President Harry Truman made the decision to drop nuclear weapons on Japan, and both Stalin and Churchill stayed close by while the trio met in Potsdam to carve up Europe after World War II.


11. Despite the virus lockdown, wedding shoots went ahead. A couple pose on the Glienicke Bridge between what was West Berlin and Potsdam in East Germany, otherwise known as the Bridge of Spies where East and West exchanged prisoners.


12. A lake in the town of Groß Glienicke, which the East-West border ran directly through and the Wall right around. Many houses have their own private access to the lake these days.


13. Berlin has so many airports it has even forgotten one. The Gatow Airfield in the far west was Britain’s terminal during the Cold War, along with Tegel (France), Tempelhof (U.S.) and Schönefeld (Soviet). Today it’s an air force museum.


14. There is very little left of the original Wall structure itself, and much of the old death strip has been turned into landscaped gardens in suburbs such as Staaken. Here, an elderly pair enjoy the view.


15. In order to trade excess electricity production, the West Berlin administration built pylons through an otherwise bucolic Spandau Forest during the 1980s.


16. The garden city suburb of Frohnau is tucked up against old woodland and lakes. After this the trail turns sharply south toward downtown Berlin.


17. Locals use the old phone booth to trade books at Lübars, billed as the last true Berliner village. It’s surrounded by fields and lakes hidden away from tower blocks close by.


18. The original so-called Heidekrautbahn railway route is being revived decades after it was diverted by the construction of the Wall.


19. The Schönholz Soviet war memorial is a monumental mass grave in the former East Berlin with 13,000 soldiers laid to rest here. I arrived the day after Russia’s Victory Day so there were plenty of fresh flowers and wreaths.


20. Bornholmer Straße, where the East-West border first opened in November 1989. Today the bridge is a memorial, but it also marks the boundary between suburbia and gentrified Prenzlauer Berg.


21. Bernauer Straße hosts one of just a few remaining segments of the original Wall, with metal installations filling in missing parts along the road.


22. A bystander looks at part of the modern Bundestag office complex, reflecting the renovated historical parliament building across the Spree river.


23. Looking west through the Brandenburg Gate. During the division of the city, the landmark was encircled by the Wall.


24. The Checkpoint Charlie intersection is usually bustling with tourists. Although Berlin’s restaurants are reopening this month, the tourist traps were still empty on a sunny May Sunday.


25. The East Side Gallery is a long stretch of the Wall that often becomes a forest of selfie sticks. Here, it’s empty, with Dmitri Vrubel’s famous embrace between Leonid Brezhnev and Erich Honecker available to view without a queue.

Source : Politico EU More   

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