Springtime for Germany and Winter in Spain

While Southern Europe is in a depression and subject to political wild cards, Germany (and Northern Europe) are complacent. Germany has it both ways because it sustained its own growth by lending to the South, and now that those customers can’t pay their bills, the imposition of German-driven austerity will help solve the Fourth Reich’s looming labor shortage. History, Marx said, sometimes repeats itself: the first time as tragedy, the second time as farce. In a recent article for the London Financial Times, Gideon Rachman (“Europe’s crisis is breeding comedians, not fascists”, March 5) was right in pointing out the ostensive differences between the new populism in Europe and old-vintage fascism. Beppe Grillo, the comedian, is not Benito Mussolini, nor is the Greek Golden Dawn a carbon copy of the old National Socialists. Modern Europe has little appetite for militaristic aggression, and “red scares” are long gone. But this is where differences stop and similarities begin. It behoves us to re-read Thomas Mann’s novella “Mario and the Magician.” Mann describes a trip to Italy in which the narrator sees the people falling prey to a hypnotist who uses his mental powers in a fascist way to control his audience. As in yesteryear, large sectors of the population face a precipitous decline in their standard of living. As in yesteryear, for a while some of these will mobilize in protests fuelled by demagogues who could attain power. Some countries will then settle for regimes that may bear some resemblance not to the Duce’s Italy but to Salazar’s Portugal. Five more years of bad policies in Europe’s South and most of the young generation will be gone –into other countries and into a bitter middle age at home. The older ones will be impoverished pensioners in search of minimal security against immigrants that will be both needed and detested. Right-wing populism will continue to rise as opportunities decline.

Meanwhile, the best and the brightest from the European periphery are migrating to Germany, where they find the very opportunities denied them at home. The German magazine Der Spiegel (February 28, 2013) reports that the first members of the baby-boomer generation, the children of Germany’s economic miracle, are now entering retirement. The country will lack about 5.5 million skilled workers by 2025. Companies in Germany’s booming regions are already feeling the shortage today. The crisis in Southern European countries comes in handy to fill in this shortage of qualified personnel. As the staff of Der Spiegel reports, “Young, well-educated and multilingual, they are precisely what the German economy needs to ensure success in the future. The country has its work cut out if it wants these ‘godsends’ to stay.”

For a decade Germany benefitted from the single currency and lent money freely to the lesser economies of Europe. Its exports in euros were cheaper than they would have been with a stronger Deutsche Mark. When the giddy years came to a halt as a result of the financial crisis, Germany became a stern fiscal disciplinarian while keeping the near-bankrupt countries in the periphery within the euro zone. Since those countries could not, as in the past, resort to the devaluation of their currencies, the only option they had was to engage in “internal devaluations” – a polite term that means rolling back the wages and benefits of the middle and working classes, and a horrendous increase in unemployment, especially among the young.

Barring default and devaluation (the “Argentine way”), Southern Europe is trapped in a monetary prison camp, with docile politicians doing the bidding of Brussels eurocrats behind whom stand the German disciplinarians. Germany, it would seem, can have it both ways. It helped itself then and it helps itself now. In smug self-content it prospers while the periphery labors under a prolonged and cruel depression. At this point it is not unfair to pose the question that so far only “extremists” in Greece, Italy, Spain and Portugal have posed, namely: is this a model of European solidarity or the farcical sketch of a fourth Reich? The three empires of German history came and went. This one will too.