With the rise of Hitler in the 1930’s Germany attempted to establish the Third Reich militarily as it crushed all of Europe except Russia, which it left devastated. With the fall of the Third Reich the Europeans led by France attempted to constrain Germany while striving to return France to greatness. This effort to control Europe led to the creation of the Euro-zone and the Euro as the common currency. Alas as usual the arrogance of the French created a situation that instead of containing Germany and increasing French power, it has had the opposite effect. The European governments are socialist with populations that are not driven by a strong work ethic but with a strong expectation that the government will take care of them. This has given the hard working Germans a tremendous advantage as they work and make money while the rest of Europe vacations and wallows in their socialist giveaway programs.
Following WWII the Europeans treated Germany as a defeated foe and exploited Germany as Germany rebuilt but this exploitation was mostly financial as they used Germany’s financial growth to gloss over the growing problems with their socialist economies, mostly led by the French whose idea of sacrifice was to work more than 32 hours a week. The Germans accepted this situation for a long time but with the cost of Germany reunification and the end of the cold war Germany began to reassert itself and ask why they were carrying most of the financial burden for the Euro-zone? In fact the current financial crisis in Europe has made several things abundantly clear. First there is no central control and the European Congress is more show than effect. Secondly the only economy in Europe strong enough to exert control and influence financial policy is Germany, and finally, there is little prospect that the weaker European countries will be able to recover financially without some external control and the only logical country to exert that control is Germany.
The French led the charge for the Euro Zone thinking that they would be in charge and would dominate Europe, but they didn’t anticipate what happened when the Euro was introduced. The Maastricht Treaty created a common currency but it also allowed for national control of finance, banking, and fiscal policy. This meant that the countries had their own tax policies but would not share banks but would share interest rates. While the Euro-Zone would share a common currency there was no one in charge of the economy or to set central fiscal policy. But while Europe had been living off of Germany for years they simply assumed that Germany would just continue supporting the rest of Europe financially so there was never any attempt to curtail spending or to align taxes to all of those expensive socialist programs. While that was bad enough it seems that with the lower interest rates – due to the shared interest rates in Maastricht – some of the Euro-Zone members – like Greece – went on a borrowing spree as interest rates dropped and the cheap credit flooded the Euro-Zone.
But now the Germans have had enough. They have had to cut back on many of their socialist programs to maintain Euro-Zone fiscal stability. But they no longer feel that they should support and pay for the fiscal irresponsibility of the Euro-Zone members while they are having to sacrifice to subsidize this irresponsible behavior. The result has been the creation of the European Financial Security Facility (EFSF) which raises money on the bond market and funnels that money to the weak Euro-Zone members, but the EFSF is run by Germany and it is the Germans who call the tune – not the French or the Euro-Zone members. Under the EFSF the financially stressed Euro-States can now access the needed funds but only with German permission, because this is not under the control of the European Union. In fact the EFSF can act independently of the EU in any future financial crisis. The reality now is that any distressed European State can get any money they may need but by doing whatever Germany tells them to do.
The reality now is that any Euro-Zone state who accepts financial assistance from the EFSF means ceding financial control of their economy to Germany. This means that these countries will be forced to accept German austerity programs but the fine print shows that the conditions imposed by Germany don’t have to strictly be financial. In effect Germany now controls the Euro-Zone economy and with that control they can now dictate policies that extend beyond the financial -- if they choose to do so. Failure to accept German direction simply means that Germany can cut off the flow of money which would devastate the weak socialist governments. Germany has attempted to establish control over Europe militarily with the last attempt being Hitler’s Third Reich but now it seems Germany has established control over Europe without firing a shot. Rather than out shooting the French and the rest of Europe they have simply out worked them. Welcome to the Fourth Reich