… THAT GERMANY IS NOT THE HEGEMON.
The terrible war between Sparta and Athens which destroyed Greece, started because Sparta wanted to be seen as the hegemon of Greece. Whereas, truly, all indicators were that Athens was the rising hegemon.
And the reasons for this were deep: the racist, fascist exploitative model of Sparta, far from being a leader, was going down, whereas Athens, whom Pericles described as an “Open Society“, was going up. Athens is the leader (hegemon) that we are following today.
Smart people learn from history, and France, in particular, has long pondered Athens’ fate.
Balancing a budget is worthy, as long as there are not excellent reasons to make it unbalanced.
A military situation is an excellent reason for unbalancing the budget of a state. The USA generated a massive deficit in World War Two. So did Britain, or France.
The USA deficit was from credit extended by the USA, to the USA. In other words it was convertible into a tax. The debt could be extinguished by taxation. And that is exactly what FDR, Truman, and Eisenhower did (tax rates were hiked up as high as 93% under Ike).
The British or French debts were credited by the USA, and that meant a sort of slavery, looking forward, as happened. France has seriously recovered. In August 1914, 38 million Frenchmen were invaded by 122 million German speakers. Now there are significantly more young Frenchmen, than young Germans.
Right now, the French Republic’s army is making war, or containing organized outlaws on several continents (South America, Africa, and Eurasia) and many countries. The French government does not have the money to do so. Thus the French government ought to keep its budget unbalanced. The French imbalance is targetted at 4.5% of GDP (in violation of Euro regulations by 50%).
British budgetary imbalance is only at 3.7%. The price Britain pays for this better budgetary balance, is to play now only a puny military role… relative to France. France does not like that, her only serious ally being now, once again, the USA. Same old same old, just as in the 1780s…
Germany has a primary budget imbalance of zero percent. Which may look balanced, but is not, because it’s mentally imbalanced to count cents, while Europe burns.
A republic which does not defend its values is not a Republic.
Balancing a budget can kill an economy: the Greek GDP is somewhat down 30% from its peak. However Greece has a primary budget excedent: that means that the Greek government spends less than it receives in taxes, fees, etc. The reason for the Greek overall current account deficit is payment of interest to (world government’s) institutions such as the ECB, the ironically denominated European Stability Fund, the IMF, etc.
The French government knows all of this, and is, truly, the real hegemon of Europe. So when the French president drew the line, Germans, most of them against keeping Greece is the Eurozone, according to polls, had to capitulate.
Another 85 billion Euros is going Greece’s way. Dr. Merkel, in the end did the reasonable thing, what the French government told her to do (and she overruled her hawkish, asnd somewhat deranged finance minister).
However, the Germans are angry. Very angry. The New York Times ponder “Germany’s Destructive Anger“.
The author, Jacob Soll, an American, played a role in Greek debt drama (rumors are that the debt may have been overestimated). Says he: “German anger, and we know they are angry. Finance Minister Wolfgang Schäuble was reported to have started yelling during Saturday night’s negotiations. France and Italy have both made huge loans to Greece, but neither country has expressed hostility to Greece. Why is Germany so angry?
As an economic historian, I got a taste of this resentment…”
Indeed why are the Germans so angry? Because they are resentful. About what? Nietzsche was so intrigued by German Resentment, that some view him, first, as the philosopher of resentment.
How did Germans got so crazy, once again?
Mr. Soll, a professor of history and accounting at the University of Southern California, is the author of “The Reckoning: Financial Accountability and the Rise and Fall of Nations.” He concludes: “German attendees circled me to explain how the Greeks were robbing the Germans. They did not want to be victims anymore. While I certainly accepted their economic points and, indeed, the point that European Union member countries owe Germany so much money that more defaults could sink Germany, it was hard, in Munich at least, to see the Germans as true victims.
Here lies a major cultural disconnect, and also a risk for the Germans. For it seems that their sense of victimization has made them lose their cool, both in negotiations and in their economic assessments. If the Germans are going to lead Europe, they can’t do it as victims.”
Krugman makes similar observations in “Angry Germans“.
Says Paul: “Germany’s sense of victimization does seem real, and is a big problem for its neighbors.”
Germany’s sense of victimization is how it got to hate the French, the Slavs, and the Jews. Just read Hitler’s Mein Kampf: it starts with Germany victimized by the French, then smoothly transit to it being victimized by the Jews…
Why so angry?
Because the truth is out: Germany is not the hegemon of Europe. It tried, once again, and completely failed. Once again. The French Republic stood in the way, gathered around her a more powerful coalition than Germany, in the Eurozone itself, and then added the IMF.
The IMF made first a 180 degree turn: it has concluded that the Greek debt, as it is, is completely unsustainable, and should be cut drastically (Tsipras proposed 30%, I propose 50%). All serious students of debt agree. And Germany used that trick several times in the last 150 years.
Meanwhile, the USA had rallied the French position. The USA has created for its economy 13 times more money than the Eurozone.
France won. France won even Merkel.
France is the hegemon of Europe, Germany the moribund. Because, assuredly, only the mentally moribund would strike such a stupid position about Greece with so much obstinacy, absent any capacity for reason and introspection.