The €85 billion rescue package has tied Ireland more closely than ever to the EU yet left a sour aftertaste. It seems we've fallen out of love with the EU – and we're not the only ones, writes DEREK SCALLYin Berlin
GERMANY’S SMALLEST bank has just one member of staff, 500 accounts and €22 million on deposit. In the village of Gammelsfeld, northwest of Stuttgart, bank customers have three options: current account, savings account and loans. No shares, no funds and no risk. Yet even these assiduous savers, in a nation of savers, have been struck by euro angst.
“Customers are asking what will happen to the euro, all right,” says Peter Breiter, manager, teller and cleaning man. “Some think other countries will follow Greece and Ireland, and four customers have already bought gold.”
Sitting in the bungalow that houses this 120-year-old bank, with fittings so old they are retro-chic, Breiter is curious to hear that German savers have been cast as villains in the crisis unfolding 1,200km away in Ireland.
The accusation, which is popular among some Irish pundits, is that Germany flooded Ireland with cheap money to get the Irish hooked before jacking up the price. It’s a theory that to German ears sounds more appropriate for heroin than home loans. Breiter listens in puzzled silence.
His predecessor Fritz Vogt, who retired in 2008 after 40 years in the job, is quicker to answer. “That the Germans tend to save has its positive sides but its negative sides, too,” says Vogt, who is now 80. “I always had to say to the old people here not to save so much, to spend some of their money and let the economy grow.”
Then with painful politeness he rejects the accusation that German savers are to blame for Ireland’s mess. “At the end of the day, as we say here, everyone cooks their own soup.”
Ireland’s €85 billion rescue package will change fundamentally our relationship with the European Union. The ties of debt will bind us more closely than ever to our EU partners. Yet for many the terms of the deal seem to have left a sour aftertaste. We will take it, they say, but we won’t like it.
Is this resentfulness an indication that Ireland has fallen out of love with the EU? Prof Brigid Laffan of University College Dublin suggests that happened at least a decade ago, citing the failed Nice and Lisbon votes. The feeling doing the rounds that Ireland was “done over” on the loans is symptomatic of another traumatic shift in our relationship with the European institutions, regardless of the economic debate on the terms.
After a decade of prosperity and interdependency with Europe, she says, the crisis loans have kicked us back to the bad old days of complete dependency.
Pointing the finger at the euro zone or Germany for Ireland’s economic meltdown is understandable, she says, but disingenuous. “Blaming others for the situation in which we find ourselves is the worst possible thing we could do now,” says Laffan. “It will damage us.”
The single currency fixed a fundamental historical problem in Ireland by providing easy access to capital. What we as a nation did with the money is our business, she says.
“This crisis was home-grown due to political and institutional weakness,” she says. “There is a European dimension, but blaming them is a knee-jerk reaction.”
Ireland is not alone in this reaction: across Europe the blame game is in full swing, revealing what the German political analyst Jan Techau calls the “instinct dilemma of EU nations”. Countries in crisis revert to their deep-seated, self-preservation instinct to close ranks and be sceptical of others. “It’s the them-and-us mentality. Meanwhile, the European integration process is precisely the opposite, based on the assumption that you are better off opening up and integrating,” says Techau. “This dilemma is aggravated by the fact that there are great imbalances between the nations in question in terms of size and power, and also great differences in attitudes vis-a-vis spending.”
The euro-zone crisis has demonstrated how strong and deep-rooted the single-currency reality is. Euro-zone members are legally obliged to stick together in difficult circumstances. At the same time, however, it has exposed a worrying aversion to this same solidarity.
Nowhere is this clearer than in Germany, where a new book entitled Save Our Money! breaks several postwar taboos by calling for a break-up of the euro zone to protect German national interests. The book taps into national anxiety that, after sacrificing the Deutschmark on the altar of European integration, Germans have tied themselves to an EU economic black hole. The view is gaining ground, even in Berlin, where the politicians express support for Ireland in public while seething with anger in private.
“The problem is that Greece and Ireland wanted a German standard of living without working for it,” said one senior member of the ruling Christian Democrats (CDU) in a closed-door meeting last week. “That’s just not possible any more, not on the back of German hairdressers.”
This Germany-first attitude, and in such a bald tone, is the trademark of a younger generation of German politicians in power. Unlike the older Helmut Kohl generation, they do not accept the idea of unquestioning support for Europe. The philosopher Jürgen Habermas has warned that what he calls a “new German indifference” to Europe will, if left unchecked, turn the EU’s congenital defect – the lack of full political and economic union – into a terminal condition. For Habermas the current round of nationalist finger-pointing is proof of a failure to create a feeling of a shared European destiny above and beyond national borders.
“A crisis is a time when people can make history,” he wrote in the Die Zeit weekly last May. “But our limp political elites, who prefer to follow (tabloid) headlines, cannot talk their way out of action by blaming the wider population for blocking deeper European unity.”
In Germany, however, that is exactly what is happening. At Chancellor Angela Merkel’s cabinet table in Berlin, the only full-blooded European politician is also the one most likely to retire soon: finance minister Wolfgang Schäuble. Some political watchers fear that his departure will mark the end of the postwar German connection to Europe.
“I get the impression that some of the younger generation just want to be able to pound on the table at summits like other countries,” says Ulrike Guërot, Berlin director of the European Council on Foreign Relations. “They are influenced too much by what they say down the pub rather than being the one influencing what they say down the pub.”
What these German politicians are hearing down the pub, or in tabloid editorials, is that the time has come for Germany to stop being taken for a ride in the EU. Their Irish political colleagues, meanwhile, seem to be reacting to pub gossip that “the EU” and “the Germans” are responsible for our problems.
“We are looking for someone to blame for the state of our country, and ‘them lads from Brussels’ are an easy group to direct a lot of anger at, especially as they are not the people we are responsible for electing,” says Andrea Pappin, executive director of European Movement Ireland.
Back at Germany’s smallest bank Fritz Vogt, the retired manager, is annoyed that Europe’s political classes refuse to fight for the euro zone and instead, he says, are wilfully misreading voter nervousness about the single currency as outright rejection. “People here are worried about the euro, yes, but they don’t want out of it: they want more Europe, not less,” says Vogt. “With the rise of China and India, our only chance in Europe is to stay in the same ship, not have everyone try to save themselves in smaller rescue boats.”
Until sense prevails the good ship euro zone is doomed to sail on in rough seas of endless finger-pointing. Faced with a problem of unimaginable scale, the crew has forgone solidarity in favour of denial on the scale of Groucho Marx and his memorable remark: “I don’t care to belong to a club that accepts people like me as members.”
