and the Greek newspaper Ta Nea glumly called it a victory for the "Queen of austerity."
In reality, the German election was less a vote for more austerity than a reflection of domestic concerns about stability. And, in any case, Merkel's opponents actually won the election. Merkel and her allies control 311 seats in the Parliament, but the Greens, Social Democratic Party and Left Party won 329 seats. While the Greens and Social Democrats have acquiesced to some austerity policies, they are not as hard line as Merkel. If the Greens and the SDP could overcome their hostility to the Left Party -- which took 64 seats, one more than the Greens -- the center-left could form a government that could potentially alter the economic chemistry of the EU.
In the meantime, Bulgaria awaits its fate with an odd combination of clear sightedness and illusion.
Surveys show that most people think the Euro will cut their living standards and have a negative impact on the economy. Bulgaria is already in difficult straits, partly because when it joined the EU it lost its biggest customer, Russia, partly because it is small, and partly because it still suffers from a post-communist hangover. It is the poorest country in the EU.
Like many former communist bloc countries, when Bulgaria broke loose from the domination of Soviet Union in 1990, it went on a privatization tear that ended up largely gutting its industrial and agricultural base. It is now trying to claw back by reviving agriculture and building up the tourist industry.
But tourism is volatile, and Bulgaria appears to have over-expanded, much as Spain did. The Black Sea coast south of Burgas is lined with high rises and gated communities, but many of them are dark when the sun goes down. There is a distinct feel of a real estate bubble.
The illusion is that Bulgarians support EU membership because they think it means the Union will bail them out of any future trouble, as it did Greece, Spain, Portugal and Ireland. In fact, the Union did not bail out any of those countries; it rescued failed banks and financial institutions that had recklessly gambled away their assets on real estate speculations. These "loans" also required huge cutbacks in social services and massive layoffs of public workers.
When the bubble popped, it was taxpayers in those countries who ended up picking up the bill, including those incurred by "core" French, German, Dutch, Austrian and British banks.
In the coming war over "stimulus vs austerity" Bulgaria is unlikely to play a pivotal role, though conquerors have underestimated her in the past. The question is, will the country resign itself to second tier status in the EU, or will Bulgarians join with increasing numbers of Greeks, Spaniards and Portuguese who are saying "enough"?
A good start toward turning things around would be to take up a call by Greece's Syriza Party for a European debt summit similar to the 1953 London Debt Agreement, That pact allowed Germany to recover from World War II by cutting its debt by 50 percent and spreading payments out over 30 years.
The Mark IVs Panzers are museum pieces. These days the power to wreak destruction doesn't depend on commanding armored divisions. All one needs to overrun Europe now are currency control, banks and obsequious politicians.
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