Europe?

Germany is the current power house in Europe and it seems like there are wishes that Sweden should help Greece to help Germany out in the Eurozone. How about investing this money in Britain instead? They are a little short right now.

More than 40 percent of the former East Germans believe that differences outweigh the similarities

Dagens Nyheter has an editorial today for the 20 year celebration of the reunification of Germany. It is up-beat. The Financial Times ran an article the other day which was more to the point and perhaps more true to the actual picture. The communist ghost is not dead and there are nostalgic people left. In a generation or two the rift might be mended though.

Personally I'm pleased with the fact of a reunited Germany. A strong Germany is good for the EU and very important for northern Europe. I especially like the Germans that with the US think in terms of checking Russia. Yes, I'm old enough to remember the Soviet Union and that abominable socialism that cause former East Germany to have only 70% of the GDP of West Germany after 20 years and over a trillion Euros invested.

So what is a strong Germany going to do in Europe? There has not been much written lately since the debt crisis in the spring about the future of the EU, if you discount the talk about "economic governance". A few articles flashed by where there was a call for further political union as the means of saving the Euro so that seems to be the current trend.

If that trend holds up, it is waving in the wind, I don't think Turkey should enter the EU. Their democracy is different from that of northern Europe and would not fit in. They are probably fine on their own as a neighbor of the EU and Russia which they according to Carl Bildt are going to dwarf economically in not too distant future. If the EU stays as it is today, Turkey could probably join without problems. This is apparently the position of AngloAmerica and of the Swedish government although France and Germany are skeptical.

A development that I find interesting is the interest China shows in helping Greece out by even buying bonds if necessary. They apparently want to score some European points for their prosperous state capitalism being nice in the hour of need to the desolate Greeks which the German public was not. They are going to lease part of the port in Piraeus for €3.3bn. Are they giving back for all the talk about human rights and being nice to the poor? I don't think the Greeks mind though.

It was also nice to see that the Latvians chose a center-right governance that continues the reform policy and that the Russian inspired opposition did not complicate matters. They are complicated enough with the 18% drop in GDP that Latvia suffered as a result of the financial crisis. The Harmony Centre containing three parties The Harmony Party, The Socialist Party and The New Centre. It is led by the Mayor of Riga and consists mostly of the Russian speaking minority. According to The Financial Times the ruling coalition got 59% of the vote and The Harmony Centre got 25%. In other words, all things well in the Baltic Sea area.

Greece?

Well, it is a little over two months since I commented on the Greek financial crisis. The financial part in this crisis is on a slippery slope that there is not much to talk about. Confidence in Greece from the point of view of the markets is eroding. One of the three rating agencies has given Greek bonds the "junk" status. The other two are one notch away. Other countries like Portugal and Spain have also lost in their ratings.

More interesting is perhaps what is happening with Europe. We have two elections coming that both might be important for the future development. One in Britain May 6 and one in Germany May 9. The British election might be important for the outcome of the German one because it might go in an eurosceptic direction if the Tories win. Will Germany say good bye to Greece from the Eurozone then?

Some people are actually already saying that Greece will default on their loans. Investors will not get all their money back. They talk about a Lehman Brother's of Europe. What is happening in Europe? The European welfare model is falling apart or are we now to believe that only north of Europe can function economically in the present global environment?

Most people are not economists, I am one of them, but economists have not performed as of late. They are as bewildered as most of us. The funny thing is that in the middle of all this in Europe there exists a very strong voice for increasing expenses further to account for the environment. With one country dropping off after the other, is this something that Europeans are going to afford?

From the press of the latest 2 month it is clear that Germany is in charge. It is the largest country in the EU and they did reasonably well through the financial crisis. It is Wolfgang Schäuble that sits with Jean-Claude Trichet of the ECB and Domenique Strauss-Kahn of the IMF. What is it we Europeans want to hear from our leader, ie, the leader with most liberty at this point, Angela Merkel, at a time like this?

Well, maybe the Germans want to mind their own business from now on? They have paid a fortune into East Germany and know first hand how difficult it is to germanize or europeanize a country both economically and inspiration wise. The idea of a federal Europe is dead and buried according to most accounts. Maybe they think that we can make it alone in a globalized world but it is not possible to carry any dead weight?

That is probably the core of the matter. Is the average EU strong enough. A two speed Europe is already here. But will a two speed Europe really function? It is anathema to the welfare state model where the weak are helped along by the strong. My feeling is that Europe is at cross-roads. It is now or never.

The EEAS or European External Action Service headed by the high representative Lady Ashton, 7,000 able men and women, are not even in play yet to take care of EU foreign business. We were going to have a voice in the world but we just have to dump some of the ballast first? Everything that is not getting our common act together is going to look rather silly by observers in the world at large.

Various interpretations of EU's role

EurActiv: "In an interview to be broadcast ahead of an EU summit next week, European Commission President José Manuel Barroso says expelling a country from the euro zone, as suggested by German Chancellor Merkel, would be against EU treaty rules."

"Merkel wants possibility to exclude members of the Euro zone" from Main focus of eurotopics.net

"Merkel's proposal un-European" from Les Echos, France.

"Chancellor's ill-considered threat against Greece" from Frankfurter Allgemeine Zeitung, Germany.

"Betrayal of the European idea" from Eleftherotypia, Greece.

"Germany must continue in key role for EU" from Corriere della Sera, Italy.

I am trying to figure out what is going on in Europe in the wake of the Greek debacle. Many seem bent on a federal Europe from the articles above but Angela Merkel follows the old Europe below our constitutional court rule. The Germans can apparently think in terms of an IMF intervention in Greece rather than forming an EMF which would have rendered a federal touch to Europe.

Is Merkel seeing something here that others don't see? The Lisbon Treaty hardly did not start until Germany is beginning to suggest future changes of the treaty situation. It could also be a type of courtship where Merkel, and Germany, is playing hard to get in order to get more power and popularity. From the article titles above it is possible to glean a leadership role for Germany in Europe. However, Angela Merkel might be saying no at a very important historic moment?

How far is the revolution?

EUobserver / Greece comes to standstill as citizens focus anger on EU: "One worker said: 'The EU wants to squeeze Greece like a lemon. It wants to get all the money from us.'"

The elites are in trouble, as wrote David Brooks the other day. I have read in the press that it is Greece that has managed its wealth erroneously but this is not the opinion of the Greeks according to several articles from both European and American press. In the US there is the Tea Party movement with their claim on fiscal responsibility.

Lemon juice is the word because Greece has complained on Germany who stole their gold during World War II and did not pay it back, something the Germans do not agree upon. Increasingly people are beginning to get the feeling that too much is decided on top of their heads and that they have to pay for other people's mistakes, despite going to work every day.

However, the question is what the Greeks in reality expect. Their country's finance is bust and austerity measures in need. They are not in the mood for working themselves out of their pit. Do they have a feeling that this is not possible? That someone is going to rescue them? Perhaps no one is providing a new way forward. A clear sustainable goal for future living. They are frustrated because they have lived their life but this did not work. Debt accumulates as they live above their means.

The Germans, those in Europe with the deepest pockets, apparently got crazy when they heard that the Greeks were going to raise their pension age from 61 to 63 and wondered if they had to raise theirs from 67 to 69 to bail Greece out. A revolution is perhaps not really justifiable. However, they need reform. Transparency International rank them with Bulgaria and Romania, way down on the list. Corruption is rife. Turkey is actually above Greece in the corruption ranking and some people hesitate to enroll them to the EU because of their problems of governance, their civil war between the democratic Muslims and the secular Military.

Is it then possible for the Greeks to complain on the European elites? Corruption is not only a problem of the establishment. It is also a systemic ailment. The bottom line of recent events, however, is that the Greeks don't seem remorseful.