Behind the Euro Crisis: Germany Gambles on the Old Dream of European Hegemony
By Richard Greeman
German industrial and financial power is
the key to understanding the complex and often confusing international
maneuvers around the Crisis of the Euro. Germany is Europe’s industrial
powerhouse, the only country that has survived the Great Recession with a
healthy economic, low unemployment, social stability and a favorable
balance of trade. The stability of the European currency is essential to
a continuation of this favorable economic situation, if this means
extending more credit to failing economies like Greece, Italy and others
down the line, as Chancellor Merkel told her own fiscally conservative
party in no uncertain terms on Nov. 15. Only within the solid framework
of a strong European Union can Germany, Europe’s principle creditor
nation, every hope to collect on her European loans and investments.
For Germany (and her American ally) the Euro-zone is “too big to fail.”
And since the European Union lacks a mechanism like the U.S. Federal
Reserve Bank, only Germany is in a position to underwrite the necessary
major bailout. This is a financial gamble of historic proportions, and
it comes at a political price: German hegemony in Europe.
Bismarck Makes Germany a Great Power
Paul Kennedy’s classic The Rise and Fall of the Great Powers
(1987) classifies Germany as the hegemonic (or would-be hegemonic)
military-industrial power in Europe from the year 1870. That was when
Bismarck, the “Blood and Iron” Chancellor of Prussia, tricked the French
Emperor Napoleon III into hastily starting a war that Prussia had long
been preparing for. After a stunning defeat (Napoleon was take prisoner
when the Prussians surrounded the main French army), Bismarck crowned
his somewhat reluctant feudal sovereign as Kaiser Wilhelm I, ruling a
vastly expanded, united German Reich (including two captured French
provinces and most of the Southern German-speaking states) from his own
capital, Berlin.
By the end of the nineteenth century,
efficient, scientifically-organized German industry was challenging
Britain’s outdated industrial plant for economic supremacy. Meanwhile,
Prussian militarism, supported by this industrial and financial
expansion, prepared for future political hegemony and territorial
expansion. During the twentieth century, two drawn-out mechanized World
Wars were required to prevent the German Reich from transforming her
industrial and financial power into imperial domination of the
Continent. The main factors that prevented capitalist Germany’s
“natural” ascendancy to European hegemony were military: 1) Geography.
Situated in the center of Europe between the vast Russian Empire and her
ally the French Republic (still a major military power), Germany was
obliged to fight on at least two fronts in both 1914 and 1940, as well
as at sea against the formidable British Navy. 2) the rise of a new, and
vastly richer military-industrial power, the United States, allied with
France and Britain.
Defeated, Divided and Demilitarized, Germany Rebounds
In 1945, the demilitarization and division into East and West of post
WWII Germany was designed to prevent yet another attempt at hegemony,
but by 1960 (the year I bought my first VW!) West Germany’s industrial
plant had risen from the ruins, modernized and become competitive with
U.S. industry. Moreover, demilitarization freed up huge amounts of
German capital, whereas Germany’s conquerors, the U.S. and the USSR,
were draining their economies in a costly arms race. Moreover, West
Germany found an unlikely support from ex-enemy de Gaulle of France, who
forged a close alliance with Chancellor Adenauer while carrying out his
independent, anti-US foreign policy, during the Cold War. By the 1970s,
W. German leader Willi Brandt dared to break the ice of the Cold War
with his independent Ostpolitik, opening up lucrative German trade with
her Warsaw Pact neighbors. Today, Germany and Russia are staunch allies
and trading partners to the point where Immanuel Wallerstein talks of a
“Paris-Berlin-Moscow Axis.”
United Germany’s Great Gamble
When
the Soviet Empire collapsed and the two Germany’s were reunited in
1990, far-seeing West German capital took the risk of investing huge
amounts in integrating and modernizing the impoverished East. The West
German investors’ bet paid off so successfully that a former East
German, Angela Merkel, is now ruling a populous, rich, and powerful
united Germany, where she presides over the Berlin Chancellery
established at by Bismarck back in 1871.
Chancellor Merkel,
like Bismarck a Conservative, has dragged her centrist coalition,
uniting all factions of German capitalism, into another daring bet. The
terms ? Bail out the Euro zone and end up owning it: achieve hegemonic
power, without militarism. Using diplomacy and “soft” power, the
Chancellor will now collect that debts of the Greeks and Italians owe
the Frankfort bankers as effectively as the U.S. Marines collected the
Central American debts for the N.Y. bankers a century ago. Only, instead
of sending gunboats, Merkel has used canny diplomacy and financial
clout to engineer the fall of Papandreou and Berlesconi, Europe’s two
most long-serving and popular Prime Ministers. (Papandreou was brave
enough to call her bluff and announce a popular referendum on the Euro
at the Nice summit, but then he shamefacedly backed down). That crafty
manipulator Bismarck (who after 1870 actually preferred diplomacy to
war) would have been proud of his disciple.
Two Bloodless Beheadings
The deposed Greek and Italian heads of government have now been
replaced by “technocrats” subservient to the German-dominated European
Union Central Bank. The Chancellor has just dispatched teams of German
bankers to “advise” them, much as U.S. Embassy staff “advised” the
Mexicans and Nicaraguans: pay up or else! The advisors are there to make
sure that the technocratic puppet regimes carry out the most stringent
austerity measures and force the Greek and Italian working people to pay
the debts previously contracted by their own bankers and rulers. This
may not prove to be easy.
Meanwhile, the future implications of
Merkel’s historic “beheading” of two European heads of state may be as
far reaching in their own way as the double beheading in Tunisia and
Egypt. To begin with, Germany’s de facto imposition of these
super-national “receivership” regimes means an end to democracy and
national sovereignty for Greece and Italy. Ancient Europe’s two
historical Great Powers, the fountains of European civilization, the
cradles of democracy and of the rule of law, are henceforth vassals
states under the regency of German and North European banking capital.
From an international perspective, Merkel’s diplomacy and soft power
have succeeded in dominating two countries where Hitler’s hoards came a
cropper. As for Germany’s once-vulnerable Eastern front, Wallerstein’s
Paris-Berlin-Moscow Axis has literally been sealed in concrete with the
recent inauguration of the Nordstream pipeline, which will provide
Germany with an endless supply of cheap Russian gas and a bottomless
market for Mercedes and VWs. And this time around, the U.S., whose
precarious finances also depend on the stability of the Euro, will have
to support Germany, even if this means reinforcing a rival
German-dominated European economy more powerful and productive than the
declining American economy. Merkel’s Bismarckian diplomacy has thus
succeeded in removing the three principal historical obstacles to German
economic-military hegemony : 1) the geographical necessity for a
Central European Power to fight a two-front war ; 2) the unmatched
military and economic power of the United States ; 3) inadequate access
to modern petroleum-based fuels.
New Possibilities for Struggle ?
From the perspective of the European class struggle, this new situation
creates new possibilities. For over a year now, the Greek youth and
working classes have been striking and rioting against being forced to
“pay for their crisis,” and now the Italians, with a long history of
self-organization, will be called upon to defend their interests as
well. These inevitable struggles will take place in the revolutionary
atmosphere initiated in the Arab Spring and now gone global with the
“Occupy Wall St.” movement of the 99% -ers. No more illusions about
capitalism’s “trickle-down” effect. Moreover, the new technocratic
rulers of Greece and Italy and their bean-counting German advisors will
be hard put to cope politically with rebellious populations who will see
themselves as debt-slaves to the creditor German banks. It would take a
showman like Berlesconi or a populist “Socialist” like Papandreou to
continue to bamboozle the masses into acquiescence, and now they are
gone.
In this new situation in Greece and Italy, one can expect
both a rise of national resentments and splits in the national
bourgeoisie between “Europeans” and local business interests (tourism,
export industries) who may support the working classes, perhaps
demanding exit from the Euro so as to devaluate their currencies and
become competitive again. If national resentment doesn’t turn into
Chauvinism
and if the bourgeois allies fail to dominate the popular
front with the 99%, these developments may open up new prospects for
struggle. The key factor will be internationalism. Only if the Greek and
Italian working classes are able to unite (and draw in the Spanish,
Irish and other European workers) will they escape from debt-slavery to
the German-dominated European banks.
Up to now, the European
labor unions and the Left parties (Communists and Socialists) have
succeeded in confining class conflicts within their national borders,
while limiting resistance to ritual one-day “general strikes,” and
channeling discontent into local and national elections. (Of course
elections are now superfluous under appointed receivership governments
responsible to a European super-government). Nonetheless, the
entrenched, class-collaborationist national labor unions and “Left”
parties, although rejected wholesale by Greek youth and the Spanish
indignados, still have a powerful influence in Italy and France. If more
spontaneous, self-organized, horizontal movements like the Arab Spring,
the indignados, and the international “Occupy Everything” movement
spread into Old Europe (including Germany), the straightjacket hold of
the official Left on European social movements may be broken, releasing
new energies and the creation of international solidarity among the 99%.
This solidarity will be needed when the next financial bubble bursts,
as it inevitably will, and turns the Great Recession (from which only
the 1% have ‘recovered’) into a globalized Second Great Depression.
Montpellier, Nov. 15, 2011