Different approaches exist. The situation has been extremely over-dramatised. There have, in particular, been differences between France and Germany over the management of the euro, which have been highlighted by the crisis in Greece, but some arrangements on this issue will undoubtedly be developed. It would, however, be pointless attempting to conceal the differences of approach that exist, which go beyond the specific case of Greece, and which will not be smoothed over by any posturing or melodramatic declarations. These differences will be overcome by taking into consideration the respective arguments objectively. If this is not done, these differences could influence the way the single currency works or, according to certain observers, its very existence. The appeal made by the president of the European Commission (see the following pages) and the European Council last week, ought to smooth out some of the rough edges.
Three crucial elements in the German position. Germany will still continue to call for respecting the fundamental principles underpinning management of the euro. So far, its government has accepted coordination of economic policies in the eurozone (which it had previously rejected) because it considers it indispensable for monetary stability. Nonetheless, it is insisting on tough conditions, which are not simply the opinion of a minister but the official position of the country and which have since been confirmed by Angela Merkel to the national parliament. The combination of the speech and positions previously taken by the finance minister allow for a three point summary to be made of what Germany considers indispensable: a) the binding character of the Stability Pact, particularly with regard to the ceilings on public deficit and overall debt; b) very harsh sanctions against those that do not respect these rules and which could include suspension of Community funding, indeed even the loss of the right to vote in the Community institutions; c) as a last resort, the exclusion of an offending country from the eurozone, which has proved unable to make the necessary changes.
The possible exclusion of a country from the eurozone was particularly hard hitting because it was not included in the current texts. According to certain legal experts this would require revision of the Lisbon Treaty, a lengthy, complex and unacceptable operation to those who consider (such as Mr Van Rompuy, the permanent president of the European Council) that the institutional chapter was closed a long time ago. Certain economists consider that the German attitude requires Greece to leave the euro, in an effort to be able to radically devalue its national currency afterwards. Jacques Sapir (university professor in Paris and Moscow) even asserted that the eurozone would shatter in two years' time. According to this hypothesis, Germany is said to hold the conviction (which it already held at the outset) that the eurozone is only viable if a restricted number of countries can be part of it and those that do not respect the rules should leave. This extreme line is, nevertheless, far from being shared by all the others.
Mutual accusations. The German line has led to some sharp criticism and the accusation of Germany itself being largely to blame for current difficulties. By rigorously controlling national wage levels and discouraging domestic consumption, Germany has expanded its exports and it is these trade surpluses that are provoking deficits in other countries. The French minister, Christine Lagarde, has called on Germany to lower its taxes to boost domestic consumption and subsequently enable other member states to increase their exports onto the German market and rebalance their own balance of payments. This position has received a lot of support and Greece has found a number of allies. The Greek prime minister underlined that he was not seeking financial aid but rather the possibility of obtaining loans on the market at fair conditions through European solidarity policy, without which, he would have to go to the IMF. Germany explained that there were already rules that had “been written together” and that,” it was not anti-European to respect them”. Angela Merkel declared that it would be better to use an example of a country that is respecting its commitments. It should not be forgotten that the rule forbidding the federal budgetary deficit to go above 0.35% of GDP in (gross domestic product) had been included in the German Constitution and will be applicable as from 2016.
The fundamental question. Mutual criticism is undoubtedly going to ease off but the fundamental question remains: it essentially involves a need to find out whether divergences can be resolved or whether they are linked to differences of mentality, history, customs and ways of life. These fundamental aspects have risen to the surface by way of the Greek crisis but they go way beyond the specific case of one country. No compromise would be possible in the absence of an effort being made by all the different countries to understand their counterparts' positions.
Tomorrow, this column will return to this essential subject.
(F.R./transl.fl)