Posted on 06/04/2005 4:16:58 PM PDT by Pikamax
Schröder and Chirac ponder years of decline By David Rennie in Brussels (Filed: 03/06/2005)
It is one of the grandest traditions of the European project: on the eve of any EU summit, the leaders of France and Germany meet to thrash out a joint approach, before descending, like gods from Olympus, to tell the other nations what they have agreed.
Click to enlarge Tomorrow Jacques Chirac of France and Gerhard Schröder will meet in Berlin, to discuss the current crisis gripping the EU after France and Holland's No votes. But this time, there will be a distinct stench of mortality in the air, as the two men ponder the straits in which they, and their nations, find themselves.
Both leaders have suffered electoral defeats in recent days. Mr Chirac saw French voters reject the draft European constitution. Mr Schröder is scrambling to arrange an early general election for the autumn, after a regional election defeat deprived him of all authority.
This week, Mr Chirac's opinion poll numbers fell to their lowest point since his election in 1995, with 74 per cent of voters saying they did not trust him. The two men could compare unemployment rates: 10 per cent in France, and almost 12 per cent in Germany, as opposed to roughly 5 per cent in Britain.
If all this gets too gloomy, they could cheer themselves up with one thought: however bad their economies and political fortunes are looking, at least they are not Silvio Berlusconi of Italy, whose economy is poised to go into free fall.
The No votes in Holland, and especially France, exposed not just dislike of the direction Europe is taking, but insecurity about the ability of Old Europe to survive competition from the low-cost economies of New Europe.
The overwhelming problem faced by Old Europe remains its inflexible, strike-prone labour markets which have prevented several nations from reviving their economies after the collapse of traditional manufacturing and heavy industry.
Belgium has never recovered from the death of its coal and steel industries, while Portugal has failed to see tangible rewards from austerity measures imposed in recent years and is now set to break the rules governing the euro once again.
Faced with the bogey-man of the cheap "Polish plumber", French workers could only suggest laws and rules to keep that plumber out, or make him more expensive by harmonising taxes and working rules across the EU.
Assuming the EU constitution is dead, its demise may be as much a question of bad timing as bad drafting. Recent referendums found the heart of the old European Union in a truculent, uncertain mood.
The crisis, for many experts, dates back to the day the Berlin Wall came down. Denis MacShane MP, the former Europe Minister, said: "The three big economies - France, Germany and Italy - never adjusted to the post-1989 era, to the free movement of capital, people, goods and services."
"There's a three-way crisis in Europe, an economic crisis, a labour market crisis, and one of leadership," said Mr MacShane. "There's plenty of good examples of successful economies to follow in Europe: Britain, Spain, the Nordics, Ireland. Everyone in France and Germany knows what needs to be done, and it's a puzzle that for more than a decade no one has done anything about it."
Italy, France and Germany left behind the horrors of wartime occupation and dictatorship by erecting systems of checks and balances, where economic power was shared between companies, trade unions and the state, with a large dose of meddling on each side.
Mr MacShane said: "Paris, Rome and Berlin have never got away from that system. Employers have their chunk of power, and will not share it, the unions have their power, and will not give it up, the state has its role, even the church has its role - look at Sunday opening in Germany, and how that cannot happen."
It is still a struggle to buy a loaf of bread after 1pm on a Saturday in Germany, concurred Alasdair Murray, deputy director of the Centre for European Reform, a London think tank.
German reunification was "botched", with West Germany's high cost model imposed on the eastern half. Mr Schröder has credible reform plans, but cannot get them past his own party, Mr Murray said.
Mr Berlusconi came to power vowing reforms, but has spent his time shoring up his billion pound business interests, and fighting legal battles.
Between now and 2007, all three nations will have elections, offering some hope of fresh thinking, said Mr Murray. If that fails, there is always the hope that the Polish plumber's low-cost flexible model will frighten European workers into change. Competition from new Europe "may be causing distress to voters now, but in the end it will create dynamism," said Mr Murray.
"distinct stench of mortality in the air"
He's being kind. I'd imagine that to their enemies it smells like something else.
The labor system in Old Europe will change. It is only a matter of when. It just doesn't pencil.
We'll soon get to see if the following holds true.
"Planning on an international scale, even more than is true on a national scale, cannot be anything but a naked rule of force, an imposition by a small group on all the rest of that sort of standard and employment which the planners think suitable for the rest."
Frederic Hayek, "The Road to Serfdom", 1944
Is a Fr*nchman ever in anything except decline?
Kerry made these leaders the be all end all to cure all our problems.
Kerry said he was going to get these leaders to put troops into Iraq.
I would like to thank the people of Germany for giving us the word "schadenfreude." And then for giving us so much of it.
bump
Thank God (literally) that he did not win. Can you imagine where we'd be today? A pell-mell withdrawal from Iraq, China even more aggressive than today, Iran and N Korea already testing nukes, and France still sniping from the sidelines. The guy would have been a disaster. If there was ever any doubt that the Almighty is looking out for us, the results last Novermber should cure the doubters.
"Chirac's opinion poll numbers fell to their lowest point since his election in 1995, with 74 per cent of voters saying they did not trust him."Do you mean to tell me that 26% of the voters do???
"The two men could compare unemployment rates: 10 per cent in France, and almost 12 per cent in Germany, as opposed to roughly 5 per cent in Britain."Say, what happened to the Post-War Economic Miracle that was West Germany???
Oh yeah! That was capitalism. But when West Germany united with the economic catastrophe that was East Germany, the West Germans decided (for some unfathomable reason) to adopt the Marxist policies that had made East Germany an utter catastrophe and abandon the capitalist policies that had made West Germany an Economic Miracle--and presto! All of Germany is a Marxist catastrophe!
(Of course, this was predictable.)
The Europeans are learning this easy lesson the hard way. Let's just hope they learn it in time to save themselves.
Actually I think that they just may have avoided a decline, and pulling down all of Europe. The EU (Ewww?) Constitution stunk. 500 pages of micromanagement (while the US Constition I can carry in my pocket, now if we can stick to it!), much that content not belonging in the constitution but in a separate document similar in scope to our Code of Federal Regulations. Otherwise the constitution itself grows in scope (and what is the change procedure? Ratification by member states? Wow, this is messy. Then again our CFR's get to be a bit much as well).
The right opposed it due to excessive regulation, tax burden, etc., and the left opposed it because of the perception that the "freebies" would be endangered. They both were right - this EU mess would eliminate local control, everything micro-managed from Brussels. Now if the lefties want their massive welfare state, and choke their economy, let them. Just don't drag down their neighbors.
"West Germany united with the economic catastrophe that was East Germany"
Reminds me of an Economist cover from that period. An East German is telling a West German "We're one people". The West German responds "So are we."
"Schröder and Chirac ponder years of decline..."
Sweet! Maybe, like other declining Lefty heroes, they'll get gigs as PBS pitchmen during pledge drives.
That's a great quote. The Economist is worth every penny.
Except the Economist is also anti-Bush, anti-Iraq War, pro-terrorist (Arabs of any stripe) and patently liberal. I used to like the mag, but no more.
It was Rumsfeld who popularized the terms "Old Europe" and "New Europe", but has since dropped these from his speeches because of the criticism he received. But they are very useful terms and I am glad to see that so many people in the press continue to use them.
Screw the Krauts!!
Even so, there is no reason to try his patience.
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