Debt, Guilt and German History: A Reply to Wolfgang Schäuble, by Stuart Holland

Debt, Guilt and German History: A Reply to Wolfgang Schäuble, by Stuart Holland

Posted on July 26, 2013 by yanisv

On 19th July Mr Wolfgang Schäuble, Germany’s finance minister, published an article in The Guardian entitled We Germans don’t want a German Europe. Two days later I responded by annotating his article while colleague, co-author and friend Stuart Holland wrote the following reply (published in Il Foglio in Italian – click here). As it is a poignant article, I am posting it here in English for the benefit of readers:

Wolfgang Schäuble (The Guardian, July 19^th) claims that the idea that Europe should be – or can be – led by a single country is wide of the mark; that Germany’s ‘restraint’ reflects the burden of its history, and that the ‘unique’ political structure that is Europe does not lend itself to a leader–follower dynamic.  This calls not only for scepticism concerning his view of German history but also lessons from Gestalt psychology.

Gestalt stresses that what is perceived depends on the values, dispositions and beliefs of the perceiver. Thus Herr Schäuble sees the Eurozone crisis as one of public debt. This is not unrelated to the German for debt – Schuld – meaning guilt.  In stressing this in his Genealogy of Morals Nietzsche also observed that there was a tendency in Germany among strong creditors to demand penitence from weak debtors for their debt-guilt and to punish them if they did not seek redemption.

Yet Herr Schäuble’s Gestalt also displaces that only one EU member state until the financial crisis of 2008 had a significant public debt problem – Greece. The public debt of the others was sustainable and lower in Spain and Ireland than in Germany, until it soared to salvage the folly of banks which had bought toxic financial derivatives.

Rather than Germany proving a reluctant leader, threats to the single currency which Helmut Kohl had presumed would lock Germany into a democratic Europe instead proved to be the template for German hegemony, with debt distressed member states succumbing to the claims of Herr Schäuble and Angela Merkel that there was no alternative to saving them other than an austerity which denied the very principles of achieving rising standards on which the Rome Treaty, founding a European Community, had been based. 

The outcome, by 2012, was Germany’s insistence on a ‘finite solution’ in a Stability Treaty to ‘encourage and, if necessary, compel’ member states to reduce deficits, to which Herr Schäuble now adds his ‘optimal scenario’ of a European finance minister who could veto national budgets. The Treaty also has insisted on balanced budgets, despite this being as progressive a response to the Eurozone crisis as a return to the gold standard.

The path towards this override of national democracy had been laid by the earlier attempt to impose a European Constitution which was rejected by the electorates of every member state to which it was put for ratification, yet then recycled as a Lisbon Treaty, and endorsed in Ireland in a second referendum only on the basis that it was an offer, backed by Germany, that voters reckoned they could not afford to refuse. Behind this has been a misreading of German history, including the perception that it was deficit spending and hyper inflation in the Weimar republic that brought Hitler to power. 

This displaces that it was austerity by the Brüning government in the early thirties that enabled the rise of Hitler. Until 1929, support for the Nazi Party had not been a threat to democracy. But Brüning responded to the crash of 1929 by tightening credit and freezing wage and salary increases. He also prioritised repayment of reparations under the Versailles Treaty despite there being no imminent need for this since US and other banks already were offering Germany credit without making this conditional on such repayment. Both policies lost him support with the public, and in the Reichstag, and resort to government by decree. Whereas, with austerity and rising unemployment, support for Hitler and the Nazis soared from 1930 to 1933 after dipping in 1932 when unemployment temporarily fell.

Yet little has been learned from this in the policies demanded by Germany in response to the Eurozone crisis. The austerity being imposed since its onset by the Troikas of the IMF, European Central Bank and European Commission replicate the decrees of Brüning by insisting on repayment of debt, credit restrictions and public sector investment and salary cuts. This has been matched by claims from Herr Schäuble that the rest of Europe should work harder to be more competitive which have regrettable echoes of the slogan Arbeit Macht Frei, as well as by a rise of the extreme Right in several EU member states.

Joschka Fischer, the former German foreign minister, has been closer to the mark as an historian than Wolfgang Schäuble in claiming that it would be a tragedy if Germany, which twice destroyed Europe in the 20^th century, now were to do the same again through punitive solutions rather than resolve the Eurozone crisis by solidarity. While claims for ‘finite solutions’ to redeem debt and guilt through the imposition of austerity on national governments risk that Europe, which had been the cradle of democracy, under a new German hegemony, shortly could prove to be its grave. 

* Stuart Holland is co-author with Yanis Varoufakis and James K. Galbraith of A Modest Proposal for Resolving the Eurozone Crisis

Source : http://yanisvaroufakis.eu/2013/07/26/debt-guilt-and-german-history-a-reply-to-wolfgang-schauble-by-stuart-holland/

Traduction : Utiliser Google Chrome, S3 Google pour Firefox,Translate pour Safari

EUROPEAN DEMOCRACY IMPERILLED

After the Crash of 1929 two were the major developments that shaped our world. First, the common currency of that era began to disintegrate. Secondly, Nazi and Fascist parties gathered enough strength to push liberal democracy aside and to unleash a dark nightmare upon humanity. 

After the Crash of 2008, our generation’s 1929, at least in Europe, our common currency is disintegrating and the extreme Right is beginning to hatch the serpent’s eggs. From 2011 this site has been warning of this dystopic development. Unfortunately, its prognosis proved prescient. Europe is sliding into a variety of authoriatarianisms of which the rise of parties like Golden Dawn in Greece are mere symptoms of a broader epidemic.

ALL POSTS ON THE THREAT TO EUROPEAN DEMOCRACY (Updated October 2013)

• 3 FEB 2011 – The Euro Crisis as a Crisis of European Democracy
• 15 MAR 2011 – Tobin’s tax and the parlous state of our European democracy; the beginning of my ban from Greek state tv and radio
• 24 MAY 2011 – Privatisation Without Representation: European democracy’s last gasp
• 30 MAY 2011 – When push comes to shove? Exposing the incredible threat of Greece’s forced exit from the eurozone
• 31 MAY 2011 – Greece, Europe and the Global Economy: A debate with readers
• 12 JUN 2011 – The Greek Crisis and the Threat to Political Liberalism: A cautionary tale for Ireland, Portugal, the whole of Europe
• 20 JUN 2011 – Misleading Parliaments: The essence of Greek Bailouts Mk1 & Mk2
• 30 JUN 2011 – When French Folly and German Naiveté unite against Greek debt: Another sorry episode of how not to deal with a systemic crisis
• 24 SEP 2011 – Need a reminder of our era’s political deficit? Here is a glimpse (dating to 1936)
• 14 OCT 2011 – A grim assessment of Europe’s Social Democratic Parties: video
• 18 NOV 2011 – The Serpent’s Egg hatchlings in Greece’s postmodern Great Depression (My first piece on the fascist revival spurred on by the mainstream parties, and its repercussions for Europe)
• 18 APR 2012 – THE MODEST PROPOSAL AND THE DEMOCRATIC DEFICIT
• 14 MAR 2013 – Lest we forget: The neglected roots of Europe’s slide to authoritarianism
• 19 APR 2013 – Greek Banksters in Action: On the latest twist in the story of mafia-style terror spreading through the Greek polity
• 12 JUN 2013 – A night at occupied ERT. A night to remember. A night that friends at the BBC,ABC, CBC ought to note
• 14 JUN 2013 – Why am I defending a public broadcaster (ERT) that banned me, and which I always considered problematic?
• 15 JUN 2013 – James Galbraith on ERT, the Fight for Greek Democracy and the Euro Crisis
• 16 JUN 2013 – Censorship in Austria – guest post by Professor Kunibert Raffer (University of Vienna)
• 20 SEP 2013 – Nazi Murders – and what to do about them (radio interview plus a short article) 
• 23 OCT 213 – The Dirty War for Europe’s Integrity and Soul – Inaugural Europe Public Lecture, State Library of NSW, Sydney
• 15 NOV 2013 – Democracy: Its trials and tribulation in the face of financialisation, crisis and technological change
• 11 MAY 2014 – How the Greek Banks Secured an Additional, Hidden €41 billion Bailout from European taxpayers, without the consent of electorates
• 29 MAY 2014 – A Europe of One Extreme: Interviewed by Thomas Fazi on the European Parliamentary Election outcome
• 30 MAY 2014 – A lesson in democracy for Mrs Merkel (and her merry Merkelites around the Eurozone) by Alexis Tsipras, SYRIZA’s leader
• 9 JUN 2014 – Europe’s Crisis and the Rise of the Ultra-Right is the Left’s Fault
• 29 AUG 2014 – WHY IS EUROPE NOT ‘COMING TOGETHER’ IN RESPONSE TO THE EURO CRISIS?
• 7 SEP 2014 – CAN EUROPE ESCAPE ITS CRISIS WITHOUT TURNING INTO AN IRON CAGE
• 26 SEP 2014 – Frances Coppola and Simon Wren-Lewis on the ‘Modest Proposal vs Austerian Federalists’
• 3 OCT 2014 – Centralisation-Without-Representation: A reply to Frances Coppola, Simon Wren-Lewis and Niall Ferguson
• 13 NOV 2014 – CRUSH THE GREEKS! The Greek bailout revisited in the light of the Geithner revelations