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A gesture of peace to help the euro

It is no secret that Chancellor Angela Merkel of Germany does not like her conservative predecessor, Helmut Kohl.

Yet next month she will host a big celebration for him inBerlin. The event, to be held in the German Historical Museum, marks the 30thanniversary of Kohl’s becoming chancellor, a reign that was to last 16 years.It may seem puzzling for Merkel to take the lead, given how she fell out withKohl in 1999 when she wrote a letter to Frankfurter Allgemeine Zeitung,Germany’s leading conservative daily, criticising him over a party financingscandal. Merkel’s public break with Kohl stunned many Christian Democrats atthe time. They were not used to such disloyalty from the party’s secretarygeneral. Her criticism was regarded as an act of betrayal of Kohl, who hadfostered her political career, often referring to her as “the girl.”

Now, as the euro crisis reaches a critical stage,Merkel isfinally trying to make up. She is reaching out to Kohl because he is stillconsidered to be one of the most committed and passionate pro-Europe figures inGermany. “We need as much support as possible to campaign for the euro andEurope,” said Ruprecht Polenz, chairman of the German Parliament’s foreignaffairs committee. “There is no other option for Germany.”

That does not reflect the mood among Germans or in Merkel’scenter-right coalition. According to opinion polls, euro-skepticism isincreasing. Germans fear they will have to provide more financial guarantees torescue Greece and other struggling countries that use the common currency. Evermore openly, German politicians are calling for Greece to leave the euro. Notonly that. Leading politicians “ particularly Finance Minister WolfgangSchauble, a Christian Democrat “ are calling for a referendum on Europe. It isnot just because Schauble believes Germans should have a say on the directionEurope is taking. He and others are also desperately afraid of what mighthappen on Sept 12. That is when the Constitutional Court will announce itsruling on whether Germany can ratify the fiscal pact that Merkel negotiatedwith her partners in the European Union, and whether it may contribute to thebailout provision of the European Stability Mechanism.

German constitutional lawyers have already warned that bothlaws entail such a radical transfer of budget powers to Brussels that theywould invalidate the German Constitution. If the Constitutional Court rulesagainst the laws, the only way out would be to rewrite the Constitution. Forthat to happen, a referendum would be needed in which Germans, for the firsttime, could have a say about Europe.

Merkel, typically, has not said what she thinks about areferendum. She has, however, repeatedly called for “more Europe,” even thoughshe has never explained what that entails. Given the divisions inside herparty, the chancellor is adamant about one thing: Eurozone countries must firstrestructure their economies in order to become competitive. Only then can moreintegration follow. Schauble is more explicit. He wants a European Union thatis accountable, legitimate and democratic. Analysts have warned that Germans arenot prepared to give Brussels more of a say over national budgets, unlesscitizens have much more of a say over the way things are run.

For example, the European Commission, the bloc’s executive,scolded Germany and France eight years ago when they breached EU Stability Pactrules, which set budget deficits at 3 percent of gross domestic product. Butwhen member states, pushed by Germany and France, refused to impose penalties,the Commission quickly gave in. As for Greece, it has yet to implement essentialstructural overhauls, like a new tax system, despite its promises and billionsof euros in bank guarantees. Kohl has stuck by Greece and the common currency.In recent interviews, he has pleaded with Germans to support Greece out ofEuropean solidarity and because it is in Germany’s interests.

Yet one has to wonder whether Merkel’s decision to rope inKohl to dampen euro-skepticism and unite her party could backfire. It was Kohl,after all, who gave up the beloved mark for a common European currency withoutsufficient controls and conditions. But Germans have become more euro-skepticalthan Kohl would have ever thought possible. Merkel’s headache, analysts say, isnot going to go away with one big celebration for her predecessor, regardlessof what the judges rule.


Judy Dempsey is a nonresident senior associateat Carnegie Europe and editor-in-chief of Strategic Europe

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Shale gas to the climate rescue

The battle against runaway climate change is being lost. The green movement and the energy industry “ while engaged in a furious debate on issues from nuclear power to oil sands “ are missing the bigger picture.

Alan Riley - The International Herald Tribune/For The Goan
Published Aug 15, 2012, 10:53 AM IST
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There is little recognition by either side that currentpolicies to reduce carbon dioxide emissions are inadequate for dealing with thethreat that they pose. It is the coal-fueled growth of countries like China andIndia that generates much of these emissions. Unless a cheap, rapidlydeployable substitute fuel is found for coal, then it will be next toimpossible to safely rein in rising carbon dioxide levels around the world. The International Energy Agency has made it clear…

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