Are German elites secretly maneuvering Europe to political union?

[Beet]

Fascinating bit at the end of a recent NY Times article on Wolfgang Schaeuble:

MR. SCHÄUBLE said the German government would propose treaty changes at the summit of European leaders in Brussels on Dec. 9 that would move Europe closer to the centralized fiscal government that the currency zone has lacked. The ultimate goal, Mr. Schäuble says, is a political union with a European president directly elected by the people.

“What we’re now doing with the fiscal union, what I’m describing here, is a short-term step for the currency,” Mr. Schäuble said. “In a larger context, naturally we need a political union.”

Critics say the spending cuts German leaders have demanded from other countries are hurting growth across the Continent, in the process making debts only harder to repay. And his proposals to give the European Commission far-reaching powers to enforce budgetary discipline have been likened by skeptics in Britain to an invasive new “super state.” Even some euro supporters fear that Mrs. Merkel and Mr. Schäuble are talking about long-term changes while panicked investors and practiced speculators are tearing the euro to pieces right now.

“There is a limited transition period where we have to manage the nervousness on the markets,” Mr. Schäuble said. “If it is clear that by the end of 2012 or the middle of 2013 that we have all the ingredients for new, strengthened and deepened political structures together, I think that will work.”

He sees the turmoil as not an obstacle but a necessity. “We can only achieve a political union if we have a crisis,” Mr. Schäuble said.

http://www.nytimes.com/2011/11/19/world/europe/for-wolfgang-schauble-seeing-opportunity-in-europes-crisis.html?pagewanted=2

Perhaps this is all 11-dimensional chess. They're going to maneuver the continent to a huge crash-- then at the critical moment, not let the crisis go to waste and move into fiscal and political union. Brilliant. A United States of Europe would certainly be a superpower to behold.

[Beet]

Well no, not technically a secret, but it does introduce a perspective that turns narratives of the crisis on its head. Germany is not against fiscal union; it is for fiscal union. It does not abhor the crisis, it sees it as an opportunity. Suddenly all the incredulous pronouncements about how everything will be fine, the refusal to let the ECB buy bonds, etc. makes sense. The whole thing about Weimar and the German anti-inflation mentality, while containing some truth, is a red herring. The real reason they are doing what they are doing, is to allow the bond markets to give them more power. Already in the space of a couple months France illusions of being European leader or co-leader going back to De Gaulle are shattered. The Germans don't have to lift a finger; they have already built the strongest economy, so the markets do their work for them. It is all quite ingenuous, and, if true, makes these guys worthy of admiration rather than contempt and bewilderment, if only for their scope of vision and sheer chutzpah.

And I have been thinking of euro-bonds all wrong. The point of euro-bonds will not be as an instrument to save the national debts. It's the way around: Euro-bonds are to be an end in themselves, and their very justification lies in the destruction of national debts. For when none of these countries except Germany can borrow, then voila. You have achieved de facto fiscal union, with Germany holding all the power. It's really quite ingenuous. The worse the crisis gets, the more likely fiscal union, and the more domination Germany has over the entire bloc to ram through institutions of its own design for the future Federal State. Of course, they are playing with fire and there is no guarantee they can pull this off, but I can finally feel a better understanding behind Merkel's motivations and it is impressive. I have not felt this way since the final pages of James Clavell's Shogun.

[Beet]

Anyone else want to chime in? I'm increasingly convinced that Schauble and Merkel are deliberately engineering this entire crisis, timed to peak between the end of 2012 and mid-2013, in order to give them maximal leverage over a new EU treaty for fiscal and political union. No one else has a clue what is going on in Berlin.

[Beet]

Anyone else want to chime in? I'm increasingly convinced that Schauble and Merkel are deliberately engineering this entire crisis, timed to peak between the end of 2012 and mid-2013, in order to give them maximal leverage over a new EU treaty for fiscal and political union. No one else has a clue what is going on in Berlin.

At some point you have to decide whether you think they are the Elders of Frankfurt or a bunch of morons who don't get economy as well as you. Or you could lower the hyperbole down to something a little less shrill.
In my opinion they are just between a rock and a hard place. On one side they wish keep the markets from getting a hysterical episode again, but they also have a population who have no wish to pay the Greeks again, especially not after the Greeks pulled the Nazi card. Of course there's also the element that the German doesn't wish to end up in the same situation 20 years into the future, if they had just bought the Greek debt, and they wished even less that a common Eurobond pulled Germany down in the future, because it would allow more state behave like Greece. So they try to make time for Greece to begin its reforms and prayed that the market would find something else to get a hysterical episode about, so the could get room and time to push greater structural changes through and maybe get a little growth going in South Europe.

This is no longer about paying the Greeks. In fact it was never about Greece. Screw Greece. The question is France, Italy, Spain, Netherlands, Austria, Finland, Belgium, Luxembourg, the whole lot of them. Either Germany wants to be in monetary union or not. Monetary union means some sort of market support -- the sooner the better. Believe it or not, markets do not get 'hysterical', they are rational beings who will put their money where they think they will not lose it. They are between a rock and a hard place? That's terrible. But you know, they are in charge of the fate of 500 million people, so it is natural that they must face tough decisions. That is their job. Merkel and Schauble know this. They are smart. If they are deliberately denying reality in their public statements, refusing to choose either union or breakup, and putting their ostrich head in the hole as the situation continues to worsen then they have some ulterior motive for it.

[Beet]

Anyone else want to chime in? I'm increasingly convinced that Schauble and Merkel are deliberately engineering this entire crisis, timed to peak between the end of 2012 and mid-2013, in order to give them maximal leverage over a new EU treaty for fiscal and political union. No one else has a clue what is going on in Berlin.

I didn't know Beet is Jarosław Kaczyński's Radek Sikorski's sock.

Fixed.