Is the European Union kaputt?

 by Laura Vilaça

I moved to Germany – more specifically to Hamburg – little over a month ago. And you know what I realized? I haven’t been able to prove a single stereotype I got about Germany from the media in my Southern European country. And along with me, many others agreed on this. So why does the media from my country – and that of the other PIGS (acronym for Portugal, Italy, Greece and Spain, the European countries in financial trouble) – insist otherwise?

I’ve realized that people are foolishly patriotic. And more than being that, they’re patriots who choose to trust ignorance instead of facts. And the question is: why? Because they are not necessarily given the facts. The media, much like the average citizen, has proven to have little knowledge of economy and, being so, is not capable of translating the heavy economic jargon. And this interests the heads of state, because blaming someone else is always less of a hassle than having citizens mad at you. They vote, they choose who gets what (or at least they are led to believe so) – and this misinterpretation of the political play helps supporting floating promises and inflamed speeches about Europe. The European political scene is a circus – and everyone juggles it the best they can.


And in such context, the heavy hand of public judgment falls on the most obvious of prays: the leader who is doing well, Germany. Germany is the mother of all evils: it takes ‘our’ money and even dares to profit from it. But did you happen to know that most of this is… a misconception?

I asked a friend, who is a financial journalist, to explain to me how Germany profits from the European crisis, and the answer I got was very different than I expected. Germany only makes money from the crisis very “indirectly”. It actually loses more money with the crisis than it profits from it. Why? Well, let’s see: firstly, the crisis makes the countries around Germany reduce the internal demand and their imports, which penalizes Germany. For example, if there’s a 30% unemployment rate in Greece, that corresponds to less two million people potentially purchasing German goods. Secondly, the crisis sort of forced Germany to finance the countries who were in trouble, because no one else would. “Basically”, he went on, “it’s the same as you lending money to a guy no one believes in anymore”. Germany is not ‘losing money’ per say, but it’s taking a big risk: the risk that the loan is never returned.

“And how about the story they tell about Germany making millions from the interest rate of the loans?”. Wrong again, Laura. Anyone could ‘earn money’ from lending money to the countries in crisis – the problem is no one wants to do so. Portugal, for example, pays similar interest rates to those the countries who loan money are paying, so no profit gained there.

 “But if German doesn’t lend money, then the Euro is gone, right?”. Germany didn’t even want the Euro to begin with. If the countries who are in debt left the Euro, the currency would even become stronger. In terms we all understand, “if you take the weakest teams out of the National Football League, then the league becomes stronger”.

“Then WHY THE HELL is Germany helping all of us?!”. Because, firstly, the Euro is a political project, and it’s important all members of the European Union (EU) stand firm by it. Secondly, because a financial crisis may carry a phenomenon of infection, which may force the ‘strongest’ of economies to drop out of the Euro as well. Thirdly, because if these countries left the Euro, the German banks with branches in other countries would get the shit beaten out of them. However amongst other reasons, we already get the picture: the side effects of not helping are extremely undesirable, to say the least.

oh irony.

oh irony.

Though all these things now make more sense for me within a logic of economy, is still does not explain the lack of communication and altruism that the members of the EU show for each other. Nicholas Sambanis, a columnist for the New York Times, may just have the answer: “This is not just a story about profligate spending and rigid monetary policy. The European debt crisis is not just an economic crisis: it is an escalating identity conflict — an ethnic conflict.”

This ethnic conflict, apparently very slow motioned and somehow asleep, has been showing worrying signs of growth. The media gets less and less shy about shouting offensive comments about other countries. Ex-prime ministers blast injuries about other European political figures and get the right to dignified coverage on a respected weekly paper (case José Sócrates VS Wolfgang Schäuble, in which Sócrates calls the latter “a son of a bitch”). And “as ethnic identities return”, Mr. Sambanis proceeds, “ethnic differences become more pronounced, and all sides fall back on stereotypes and the stigmatization of the adversary through language or actions intended to dehumanize, thereby justifying hostile actions”. Germans want to tell the Greeks how to live, the Greeks reply by calling them nazis.

You see, we’ve all been learning how to be ‘European citizens’ for years and, apparently, it’s not working. We seem to be unable to stop being simple units from small provinces, with small thoughts and falling into easy clichés. As Nicholas Sambanis puts it, “as Europe’s status declines, the already shaky European identity will weaken further, and the citizens of the (…) European nations will be more likely to identify nationally (…) rather than as Europeans”.  And what comes with this? Extremist nationalist identities, the core point of repudiation at the time of foundation of the European Union, over 55 years ago.

The future of the European Union, as I see it, will demand a more united and cohesive alliance. A Europe that takes all members as equal and not as class A or class C. A Europe that wishes to stand tall and knows how to put historical differences aside, while taking advantage of the know-how and capacity of each of its members. A Europe that can be commanded in unison. A Europe that, perhaps, is too good to be true.


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