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THE FATE OF EUROPE May 18, 2012

Posted by wmmbb in European Politics, Social Environment.
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British Prime Minister, David Cameron lectured Europe, more particularly Greece ,on what is the proper neoliberal economic way to follow, but the Greek voters who are suffering from the politics of austerity are not likely to listen.

With some historical irony it seems that Irish voters will make the decisive decision. On 31 May Irish voters, alone out of the members of the EU,  will vote on the treaty that introduced the politics of austerity. If they vote against, all of the EU will abandon the arrangement.

The result would then be, independent of the next Greek election, but encouraged by the elections to date, the neoliberal experiment would have failed.

Immanuel Wallenstein asks:

What will happen then? The key is what happens in German political life. Angela Merkel, like any good political leader, tries to see which way the wind is blowing. Her language is therefore already beginning to evolve. She may even secretly welcome the outside pressure to do what, from Germany’s own narrow point of view, is the sensible thing, and shore up purchasing power (for German goods, among other things) in the rest of the European Union.

If Germany moves in that direction, the euro and the European Union will survive, and continue to be a major (if chastened) actor on the geopolitical scene. Worldwide, the recentering of Europe as a whole will however not encrust a status quo but rather speed up the geopolitical realignments that are inevitable. Nonetheless, German recentering may help Europe to resist better the coming tsunami of the collapse of sovereign funds and of the dollar as reserve currency.

The entire world is swimming in very choppy waters. Germany may soon join the list of states that are beginning to understand how to navigate amidst chaos. Inflexible governments are their own worst enemy.

I wonder why the Germans adopted the politics of austerity in the first place, and speculate it may have something to do with the financial burden of incorporating the former East Germany.

Prior to the outcome of the French Election, Paul Krugman explains the German psychology. Economics, he says, is not a morality play:

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