Germany Demands Small Countries Give Up Their Veto on Foreign Policy
Please consider the Eurointelligence article, What Scholz Wants From the EU.
Ask what you can do for the EU, and not what the EU can do for you. That would be our response to Olaf Scholz. He demanded in a newspaper article this morning that the EU abolishes the national veto on foreign policy
Smaller EU countries would be mad to give up the veto in foreign policy in our view unless Germany commits to a shift towards a more EU-compatible economic model. The two are toxically intertwined. There was not a word on this from Scholz, no grand bargain on offer.
The fundamental problem we see is the complete lack of awareness inside Germany of how its own political choices affect other EU countries.
Writing in FAZ this morning, Scholz is framing Germany's problem as one of overdependence on Russia. But it goes deeper. The dependence on Russian gas is intertwined with a gas-guzzling economic model that requires large export surpluses simply to stay afloat. The times when Germany's current account is in balance, as it is now, are the times when the country is in economic crisis. Germany dependence on Russia and China was not an accident. It was part of a wider strategy.
Others should respond to Scholz' proposals not by rejecting them outright, but by making demands of their own. The most important would be, in our view, to complete the banking and capital markets union, which would leverage the EU's ability to impose economic sanctions on third countries. We would even go further and insist on a full fiscal union, if only to prevent a situation where a common EU foreign policy is subjected to sectarian German and French economic interests.
The fundamental problem is the euro and the EU are both dysfunctional.
The Euro and integrated interest policy by the ECB can never be suitable for every country given the massive variances in productivity, work rules, and pensions between member countries.
On top of that, it was Germany who demanded consensus on everything out of fear smaller countries would unite against it on Eurobonds and debt comingling.
Now the German hypocrites demand small countries give up their veto without offering anything in return.
ECB president Christine Lagarde still has interest rates in negative territory despite EU inflation raging over eight percent.
Largarde does this hoping to protect Italy whose bond are spiraling out of control vs Germany,
Italy's 10-year bond yield id 3.28 percent. Germany's 10-year bond yield is 1.21 percent.
The spread would be even greater were it not for asymmetrical ECB QE policy favoring Italian bond purchases.
I don't know when this mess blows sky high, but the setup is not sustainable.
This post originated at MishTalk.Com.
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