Posted 10:14 AM by Robert

More German Unilateralism

One of the first lessons one learns in basic lifeguard training is that a drowning person is likely to grab anyone attempting a rescue, thereby causing both to perish.

Germany may be approaching that point. The Economist reports:

Germany has already bust the 3% limit on national-budget deficits imposed under the European Union’s stability and growth pact, and the European Commission has given Germany a deadline of May 21st to take urgent action to ensure that this year’s deficit is within the limit, or face the prospect of heavy fines.

The EU imposes that 3% limit to address the temptation that will inevitably arise for a financially strapped member of the Euro monetary zone to use a combination of a large budget deficit and membership in the Euro to export domestic financial strain onto other members of the Euro zone. Germany's willfull breach of this limit will therefore likely undermine any attempt to bring Britain into the Euro.

But the German breach has more disturbing significance for the EU than Germany's disregard of applicable law and the importance of future British membership in the Euro. The EU is largely held together by internal economic subsidies, and over time Germany has been the main subsidizer. Ireland, for example, has prospered greatly from EU subsidies - and the EU has just admitted a good many new members hoping to follow the Irish route to prosperity. That Germany is now, in effect, unilaterally demanding to be subsidized by other Euro members necessarilly raises the question: who can pay for EU subsidies now and in the future?

Could any reasonable person expect Germany to resume its traditional role as the utter for Europe?

There is a growing understanding - especially outside of Germany - that deep reform is needed to rescue Germany. That reform almost certainly consists largely of moving closer to an American model of national economic policy. But, as Andrew Sullivan points out:

German popular culture seems to be becoming more and more pathologically anti-American. Take a look at this week's cover of Der Spiegel. They even turn Old Glory into a version of the Hammer and Sickle. Truly repulsive.

But anyone looking to help this particular country now "imploding in a miasma of anti-Western resentment and socio-economic stagnation" should keep that lifeguard training in mind.