By Kevin Stoda
Germany's foreign policy is not only mealy-mouthed and confused to non-Germans around the globe, its ultra-pro austerity stances are not understood nor welcome in most corners of Europe. The Crisis in Cyprus more than exemplifies this, especially as the washback of austerity moves in Cyprus has scared the rest of the continent--and many others around the globe.
Instead of trying to change course on its relentless austerity binges of the past half-decade, Germany continues to feel itself to be simply misunderstood--as a whole German leaders and German government paid for propaganda simply feel that what Germany needs to do is to spend more effort improving its image. Typical is the recent Deutsche Welle article entitled, "Berlin Can't Fix "Austerity Dictator' Image Alone."
Statements like the following belie only a German belief that only Germany has a monopoly on truth: "Europe's biggest economy pays the largest amount in eurozone bailouts, but it's become the symbol of harsh loan requirements. Its bad image highlights the need for further integration of the eurozone, experts believe."
The fact is that Germany is a well-diversified economy with practically a constitutional law which demands that the country maintain a low-inflation rate at all costs. Countries, like Cyprus and Greece, have not had well-diversified economies and were not-all-that well-run before they were invited to enter the EU and to join the Euro. When Germany, Holland and other EU states expanded the EU zone and then created a Eurozone, they did so in order to protect the continent and to aid their own markets against competition by non-EU countries--which until the 1980s was Greece and until about a decade ago when Cyprus and many other marginal EU economies were invited to join the EU and Euro.
Where is any German sense of responsibility? Had not Greece, Cyprus and the others not been pushed into accepting the EU with false promises of solidarity and security, the Euro would not be a global currency now and the EU would not be the powerhouse economically that it is today.
Worse still is the Amnesia that Germany has had with its own BAD BANKS like the Munich based HypoVereinsbank. That one bank and its real estate boondoggles started the world-wide economic collapse a decade ago. The Hypo Bank cost the German governments and German citizens over 100 billion euros to bail out.
Talk about failing to set timely examples, Germany!
Richard Wolff, speaking on Democracy Now this past week noted: "Cyprus is significant for several reasons. First, it marks an escalation in what we call austerity economics. It is an effort to pay for the cost of this now six-year-old global crisis in a new way. It is an effort to fund the bailouts of banks in a new way. And the new way was agreed last week by the European forces that control this--the central bank, the European Union and the IMF--and to impose on Cyprus this new step, which is literally to go into the bank accounts of the citizens of Cyprus, roughly a million people on a small island in the middle of the Mediterranean, and snatch money out of their accounts. See, unlike other austerity, where you levy a tax and you cut back social programs, like we're doing here in the United States, that money dribbles in over a year or longer period. This way, the government can get the money to bail out the banks quickly and cleanly and neatly. Friday night, the people of Cyprus went to bed with a certain amount of money in their accounts--they thought--and Monday morning, last Monday, they were supposed to awake with X percent less money because the government had taken it. So, that's an amazing new step of austerity. It suggests that this crisis is far from over and that the authorities are desperate to find the money, other than by taxing corporations, other than by taxing the wealthy, in order to solve their problems."
Richard Wolff is an economics professor emeritus at University of Massachusetts, Amherst. He is the author of several books including, most recently, "Democracy at Work: A Cure for Capitalism." Such critiques are not being hear enough in German media and not in the government halls across Berlin and Bonn.
Wolff added in the same interview: "The second reason [Cyprus] it's important--and you stressed that--is that the people of Cyprus woke up, took one look at this, and said no--and did it dramatically. And in a matter of hours, they undid everything that the European governments and their own government had agreed to a few nights earlier. So it's a demonstration of people power in this little corner of the world that's very impressive, and the basis, I think, for some optimism about opposition."
Where is Germany's respect for people power?
Only twenty-some years ago, European states, including those in the European Union, allowed West Germany and then all of Germany to run up grave debts to unify the previously divided land.