CRISIS ATHENS: Outside of finance, the past is nearly always a guide to the future

The Slog -

Berlin needs to recognise why we’re all nervous
now…and why the Greeks would like their money back

Whether Wolfgang Schäuble likes it or not, Germany’s increasingly heavy hand in the Cyprus bailout negotiations left its smaller EU neighbours feeling anxious. Breaking with normal EU Stepford Wife tradition, Luxembourg’s foreign minister this week said that Berlin is “striving for a hegemony which is wrong and un-European”.

Foreign Minister Jean Asselborn told Reuters that “Germany does not have the right to decide on the business model for other countries in the EU. It must not be the case that countries are quietly choked, while using financially technical issues as a cover”. Unsurprisingly, now that Luxembourg has bleeped onto Berlin’s radar as a suitable case for destruction, Asselborn is breaking ranks. But the Merkel government’s response to such opinion remains rigidly unchanged: it is all a plot to paint Germany black, the Chancellery says, by using “outdated historical cliches”.

The Spin from Berlin doesn’t bear any serious examination: worse still, it increasingly bears a disturbing resemblance to the feigned innocence and amoral lies put out by Goebbels’ propaganda ministry between 1933 and 1945. Berlin tells us it had nothing to do with the Cypriot decision to administer a depositor haircut, but this is clearly untrue: the German contingent led the charge for a 40% levy from the outset. The German Finance Ministry issued a statement saying the Nicosia delegation arrived with the idea and put it to the FinMins. This too is a ridiculous reversal of what actually happened.

But the more serious charge against Berlin – which has been driving the austerity ‘policy’ from Day One – is that, while its behaviour is indeed a historical cliché, it is by no means outdated. The Germans have, in their diplomacy over the last eighteen months, shown very disturbing signs that they are reverting to type: history may not repeat, but it does rhyme.

I posted a few weeks ago about the eerie similarity between the German approach over Cyprus, and its treatment of Czechoslovakia in 1938. A UK Treasury source told me in January, following Schäuble’s visit to London, that some Whitehall grandees were “astonished at the assumptive arrogance of the German Finance Minister’s approach”. During 2011, senior CDU MPs openly told Engish counterparts they would be “forced to join the euro in the end”, one declaring publicly “Europe is speaking German again today”. The triumphalism may be historical, but an ‘outdated’ thing is something people don’t do any more: the German political Establishment pulls this kind of tactless jeering out of the armoury with mind-boggling aplomb all the time now.

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