Economy & Politics

The return of Europe

Chancellor Angela Merkel and French President Emmanuel Macron presented the reconstruction fund via video conferenceimago images / Hans Lucas

A continent sent signs of life this week that was almost gone: Europe. In the first phase of the shutdown, each country in the EU was the next to itself. Perhaps that was a natural reaction and also useful in some questions – because if you have to seal off and narrow something down, you can first fall back on existing boundaries. The disease protection authorities and health systems are now also working nationally. Nevertheless, it was rightly complained that there was also an unsightly shutdown for European solidarity.

For weeks it was puzzled what role the EU could play in the restart. And now there is an initiative, from France and from Germany. The famous Franco-German engine, which had not stuttered for years but was switched off and cooled down, has started up again, in the middle of the greatest crisis since the Second World War.

Germany and France have announced a large rescue fund amounting to 500 billion euros, and the special thing is that this case is not about loans, but about direct grants and aid payments for particularly hit regions – the whole thing is being docked to the European ones Household.

“Hamilton moment” for Europe

The supporters celebrate the whole thing as “Hamilton moment”, in memory of the American finance minister Alexander Hamilton. In 1790, he had reached a compromise on debt relief for the American states, which had become heavily indebted in the course of the war of independence. At that time, the American central government took over the debt while securing more skills and influence. This moment is considered the birth of the United States today.

Historians and economists are now bending over this comparison – I wouldn’t hang it all that high. It is not a question of founding the United States of Europe or creating a permanent system, but first of all about a crisis instrument, a very useful one.

There is opposition to the plan, they come from the Netherlands, Austria, Sweden and Denmark. And there is also great resistance within Germany. It is the fear of a transfer union, of corona bonds through the back door, of another pan-European debt orgy. Some of these fears are understandable, others are simply exaggerated.

First of all, the most important news is that we Germans overcome an inner blockade, a German trauma that has paralyzed this continent for almost a decade. Our country’s European policy has been a great vacuum for years, a prevention, a defensive battle. And the whole thing had to do with money, a fear of losing control.

The dispute over money has always been part of European integration, and whoever quarrels about this money does not have to be a bad European. For decades we always got Europe from Hans-Dietrich Genscher and Helmut Kohl Europe in a kind of double pack, with a lot of pathos and a check, it was primarily about peace, then we pulled out our wallet. Gerhard Schröder, at least in his second term, was primarily concerned with rebuilding the “sick man of Europe”. Angela Merkel, on the other hand, was above all a crisis manager, mostly driven, whether in the European debt crisis, in the refugee crisis or now in the corona crisis.

Unfortunately, this also meant that her party, which had shaped Europe for decades, lost all ambitions and strength. Since the European debt crisis, in other words since 2010, Europe has been suffering from this vacuum. At that time, some new institutions were inevitably set up to prevent another debt crisis, including the ESM rescue fund and European banking supervision.

Liberation strike for EU policies

But since then everything has been idle, there have been discussions about a common household, about a common defense, about common taxes, and every now and then there was a big pot like the “Juncker Plan”, in which one soon no longer knew whether it was is full or empty and what it did (and whether it still exists). When France’s President Emmanuel Macron wanted to start a new departure for Europe in 2017, one heard from Germany: nothing. It wasn’t until a year and a half later that a bashful and inconsiderate essay by CDU chief Annegret Kramp-Karrenbauer came as an answer. He was a symptom: Since the euro crisis, Germany has feared for its money – it is a kind of post-traumatic disorder in which many collective fears and projections mix: the loss of the D-mark, the repeated bailouts of Greece, the zero interest rates of the ECB, the purchase of Government bonds and the rise of the AfD.

When Germany comes to the top with an idea, it tries to overcome the trauma for the first time, tries to shape it. Of course it would be better if there was no such bailout fund. The fear of a dramatic increase in debt in Europe is also very real. It is important that we create effective and intelligent control mechanisms, that the money actually goes to the right projects. Germany’s share – at least 135 billion euros – must be managed because interest rates are low and the loans will probably be repaid over a long period.

The money would be well invested because Germany would benefit itself. On the other hand, we are finally learning the right lesson from the euro trauma: If we just brake, prevent and block everywhere, Germany – in the event of another outbreak of the euro crisis – will still pay the bill in the end. This would only be higher and the result more devastating. So it’s better we’re at the top.

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