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Will "Onshela" save Europe?

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History will register his plane struck by lightning on the way to Berlin, no fancy kisses, and asparagus with veal schnitzel on the menu. This is the way the eurozone ends (or begins again); not with a bang, but a ... lightning strike. Merkollande -- the new European power couple drama interpreted by French Socialist President Francois Hollande and German Christian Democrat Chancellor Angela Merkel -- is a go.

Trillions of bytes already speculate whether former President Nicolas Sarkozy spilled the full beans about "Onshela" to Hollande -- apart from the fact she fancies her glass of Bordeaux. King Sarko also had a knack for making stiff "Onshela" laugh. That may be a tall order, at least for now, for the sober and pragmatic Hollande.

The good omen may be that both do not eschew irony. In the middle of such a eurozone storm, that's a mighty redeeming quality. Then there's that lightning strike on the way to Berlin. Was it Zeus sending a message that his Greeks would have to be protected -- or else? Not to mention that Europe is a Greek myth (Zeus made Europa, the beautiful daughter of a Phoenician king, his lover...)

About that German miracle

So now Merkollande has to show results. There's not much they're bound to agree on -- apart from the possibility of a financial transaction tax (FTT) which could yield up to 57 billion euros (US$72.5 billion) a year to battered trans-European economies, according to the European Commission (EC).

Berlin is not exactly against it. But Britain, for obvious reasons, is -- seeing it as curbing the City of London. The EC, applying some fancy models, has already concluded that a FTT would not be a burden on economic growth; that would represent only 0.2% in total by 2050.

Two members of the troika -- the EC and the International Monetary Fund (but not yet the European Central Bank) -- along most governments in the EU, now at least admit that some countries, such as Spain, will need more time to reduce their deficits. An FTT in this case would come out handy.
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At home, "Onshela" is secure; her austerity mantra is popular (61%, according to the latest polls). Yet she lost another regional election last weekend, in heavily urbanized Nordrheim-Westfalen, the fourth largest urban concentration in Europe after London, Paris and Moscow -- now suffering from deindustrialization and high unemployment. And this after losing in rural Schlewig-Holstein, near the Danish border.

What's fascinating is that all this had nothing to do with Europe -- and the messy fate of the eurozone with the strong possibility of Greece leaving the euro. German voters couldn't give a damn. They are first and foremost worried about their own eroding purchasing power.

So for the first time the Supreme Taliban of austerity, German Finance Minister Wolfgang Schauble, has admitted in public that a general wage freeze -- one of the pillars of the new, neo-liberal "German miracle" -- should be revised. Even the Financial Times has admitted that consumption in Germany is "anemic." Schauble now says that wage increases might help.

The heart of the matter is that whatever "German miracle" is good for Germany's robust banking and financial system, is not good for a vast majority of its workers. Plus this neo-liberal miracle simply can't be sold anywhere else in the world.

German weekly Der Spiegel did its best to show why [1].
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The heart of the "miracle" is -- predictably -- the deregulation of the jobs market, always against the interests of workers. That implies a tsunami of part time jobs, "non traditional contracts" and sub-contracting. This means masses of workers not eligible for bonuses or participation in profits -- coupled with a reduction in retirement payments and pensions. The graphic consequence has been Germany as the current European champion of rising inequality.

Who's in charge here?

It's wishful thinking to imagine some German politician seeing the light, Blues Brothers-style, and suddenly preaching a true European political integration. German regional politics is directly linked to the banking industry -- the same banks which had a ball speculating on securities all across Europe, especially in the Club Med countries.

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Pepe Escobar is the roving correspondent for Asia Times. His regular column, "The Roving Eye," is widely read. He is an analyst for the online news channel Real News, the roving correspondent for Asia Times/Hong Kong, an analyst for RT and (more...)

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but rather that of Sisyphos (Latinised as Sisyphus... by mhenriday on Wednesday, May 16, 2012 at 12:46:38 PM