When discussing the German role in the euro-crisis these days in Berlin, relevant policy makers usually argue that Germany is willing to do all what it will take to save the euro. When guest from abroad raise their eyebrows (as they might have perceived the German position differently before), German representatives are quick to add that, however, the crisis countries have to do first what is in their power to overcome their problems. Only when full efforts have been made, Germany can be expected to pitch in. Needless to say, that the partners’ efforts so far are seen as insufficient.
This position fits nicely into the narrative that we Germans have undertaken very comprehensive and painful reforms in the 2000s and that the current good economic situation in Germany is the reward for these struggles. Implicit to this narrative is that Greece, Spain or Portugal have just not made
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While everyone looks for signals from the French president François Hollande and from the German chancellor Angela Merkel about how a compromise on the fiscal compact might look like, another important negotiation on the future of Europe is largely ignored: The negotiation between Ms Merkel and the German opposition on the fiscal compact.
Little known outside Germany, Ms Merkel will need the votes of the German opposition to ratify the fiscal compact. As the provisions are “a substantial transfer of sovereignty” to the European level, according to the German constitution, Ms Merkel needs a two-third majority in both the Bundestag and the Bundesrat (the chamber which represents the Länder). This brings not only the Social Democrats into play, but also the Green party (which shares power in many Länder with the Social Democrats and is thus needed as Länder governments) the
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As part of ECFR's Reinvention project, we are running a series of blog posts looking at particular thematic issues facing Europe as it attempts to deal with the financial crisis. In the first in this series, Tibor Dessewffy examines the attraction of populist politics in Hungary.
In his paper on future scenarios for Europe, Mark Leonard convincingly argues that the major tensions in both the European and the domestic arenas are between technocratic and populist forces. The financial crisis has certainly led to a more integrated technocratic system of crisis management, but the uncertainty over whether measures to control the crisis will succeed is also creating support for populist forces.
The public reception to populist claims varies greatly across Europe. In Hungary, for instance, a speech was given in March arguing that “We will not be a colony”. This speech, however, was
This week, I was invited to a public hearing on the economic impact of the euro crisis held at the German Bundestag. These hearings in the German Bundestag are a very peculiar exercise. Each party represented in the Bundestag is allowed to propose some experts who are then invited by the Bundestag administration. In addition, several other stakeholders are invited. As this particular hearing took place in the finance committee of the Bundestag, among the groups represented were the German employers’ federation, the federation of German unions and the Bundesbank.
In my hearing, there were also well known (rather conservative) German economists such as Clemens Fuest, designated head of the Mannheim ZEW institute and Claudia Buch, a member of the German council of economic advisors. From the progressive side, there were people like Gustav Horn the director of the Dusseldorf based
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I spent the second half of last week at the conference of the Institute for New Economic Thinking (INET) in Berlin. The central policy topic was – of course – again the euro-crisis. While the vast majority of speakers agreed that the crisis was much more than a simple fiscal solvency crisis (in contrast to what sometimes has been discussed in some German media), there was disagreement on the question how the underlying balance-of-payment crisis could be solved. Interestingly, there were already vastly different claims on what really is going on at the moment in terms of adjustment in the euro periphery. While one speaker claimed that “unit labour costs in Spain continue to rise more quickly than in Germany” another speaker claimed that “in the 2.5 years since the onset of the crisis, Spain has regained already a third of the competitiveness lost in the decade before”.
In fact, the
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