Archive for Oktober, 2011

Lucas Zeise – The Bloated Financial Sector

Donnerstag, Oktober 20th, 2011

The Bloated Financial Sector

How to Save the Banks and This Time Maybe Even Get Rid of Some

By Lucas Zeise

(article originally published in German in the October 18th, 2011 issue of the daily newspaper junge Welt)

In the last few weeks there were a number of cute scenes; for example, the thundering applause for Giorgios Papandreou during his speech before the BDI (Federation of German Industries). In excellent English with an American accent, the Greek Prime Minister promised the assembled German business leaders: “I can guarantee that Greece will live up to all its commitments.” The business bosses were as pleased as punch. Everything will be fine, promised the Social Democratic Greek Prime Minister with an American past. Formulated a bit differently, Papandreou’s message was: the EU market area will be preserved in its entirety, including Greece; the money invested by the German state for this purpose will be repaid.

As boss of the construction company Hochtief, BDI President Hans-Peter Keitel has had some good experiences in Greece. The construction of Athens International Airport was conducted by the German corporation as a general contractor. And the license to operate the airport also yielded some extra income within the framework of a classic “Private Public Partnership”. One could say that Keitel experienced up close and personal how enriching a Euro partnership can be, even with the Greeks, economically weak and denounced as lazy and untrustworthy by the tabloid Bild. Keitel and the other capitalists and head managers organized in the BDI know the advantages they have from the currency union. The event with Papandreou occurred at the same time as the Chancellor and her parliamentary ankle biter Roland Pofalla made an effort to organize a majority vote by the coalition parties for an extension of the rescue package for Greece. They succeeded – among other reasons, because the industry federation made it clear to the representatives of the FDP, CDU, and CSU how they were supposed to vote in this situation. In case of emergency, according to the clear message, the German state would have to pony up even more money, even if that would contradict its long practiced iron principles of political conservatism. The important thing in any case was that the euro, the precious currency union would be maintained.

Just Like Three Years Ago

At the BDI event, the Greek Prime Minister also positioned himself firmly on the side of the German bosses. He promised to represent their interests, while putting the interests of his Greek fellow citizens on the backburner. This is not because Papandreou is afflicted by a lack of courage. He openly advocates this position in Athens and Thessaloniki. His government dutifully fulfils the requirements dictated to it by the Troika (a wonderfully old-fashioned expression from monarchist Russia) consisting of the International Monetary Fund, the European Central Bank, and the European Commission. This trinity checked the conditions, prescribed firing public sector employees, reducing the sovereignty of collective bargaining agreements, the sale of all state property not yet privatized, and made judgments and varied its message concerning the ability of the Greek state to service its increasingly growing debt. Sometimes it looked good, sometimes not so good. In the first case, the next tranche of credit from lenders beckoned. In case of the latter, the bankruptcy of the state was imminent. In any case, Papandreou and his enormous and for purposes of PR unsuitably fat financial minister Evangelos Venizelos stood firmly on the side of the Troika, creditor banks, and the BDI.

The “cost-cutting measures” and “reforms” dictated within the framework of the first bailout fund for Greece in May 2010 have plunged the country deeper into recession, as could have been expected. And it’s not the only one. Confidence in other European countries has also vanished. In the middle of a universally acclaimed upturn, the second quarter of 2011 only brought stagnation to Germany, while the third quarter is expected to bring light contraction. The world economy has ended its interim high and is returning to a state of affairs characterized by general weak consumption and demand. A further straining factor in Europe is that some countries like Great Britain and Spain are rigorously and brutally cutting state expenditures by their own free will. Others such as Greece, Portugal, Ireland, and Italy are doing so under pressure from Berlin and Brussels. The general result is fatal.

Thanks to the impending return of recession and thanks to the crisis of state debt which has not even been solved in the slightest, we’re back to where we were three years ago. Banks once again have to be rescued from downfall with a lot of state money. Our chancellor, otherwise bent on “saving”, casually said as much after a visit with European Commission President José Manuel Barroso. At the same time, the European heads of state prepared for debtors having to take a bigger haircut in the case of the main problem country Greece (or risk a state bankruptcy). Both things have quite a bit to do with each other. Some European banks might not be able to deal with a greater devaluation of Greek state bonds – certainly not the Greek ones. Incidentally, we learn from this that the big bailout funds were only constructed with great effort in order to bailout domestic banks.

It’s still unclear how exactly the bank bailout will look. But the basic idea is as follows: first of all, the German bank bailout program “SoFFin” – hastily thrown together in autumn 2008 at the modest amount of 480 billion euro and which expired at the end of 2010 – will probably be switched on again through a resolution of the Bundestag. All other euro countries will proceed in a similar manner. In order to support those countries that can’t come up with the necessary sums to bail out “their” banks, the authority and scope of the European Financial Stability Facility (EFSF) will be extended by further resolutions of parliament. When all that is arranged, Greece will be allowed to go bankrupt. Then – such is the political calculation of our leaders – such a bankruptcy will no longer devastate any banks.

The prospect that the governments of the euro territory are contemplating once again using taxpayer money to prop up the banks has stimulated the financial markets. That was good news for investors, since over the course of the summer it became increasingly clear that some banks would not be able to deal with taking a haircut on the debt of even a small country. The banks started distrusting each other. The “money market between banks”, where credit institutes usually procure without much fanfare the necessary liquidity for each other in order to meet payment obligations and get rid of spare money, stopped functioning. Just as in the summer of 2007, when the great financial crisis had just begun, the European Central Bank (ECB) sprang to the rescue. It once again provided the banks with all the money they needed. Without this aid, some banks would have had to close due to a shortage of liquidity.

A “Watering Down Effect”

The joy on the financial markets over the rescue operation for the banks contemplated by Merkel, Barroso, and French President Nicolas Sarkozy was strangely enough not shared by some of the boards of those very banks. There arose the suspicion that the banks were to be force-fed capital. But for once, the bank rescuing politicians were actually right. What’s the use of the most beautiful bailout fund if the institutes won’t take the money, while at the same time a state bankruptcy occurs that topples one or two banks and thus knocks out the entire financial system? The bankers for their part don’t want the additional capital, since it reduces their returns. Lots of capital in relation to transaction volume, a high capital ratio, reduces profitability for two reasons. First, the leverage by means of which banks make a lot of money out of a little borrowed money becomes smaller. Second, accumulated profit then has to be distributed amongst a greater volume of capital – or as funds managers say, the “watering down effect” pushes down the return on equity. In times of crisis, it becomes more apparent than ever how the interests of bankers contradict the general interest, including the general interest of capital, in the most frictionless possible flow of economic activity. It will be interesting to see how and to what extent the European heads of state will be able to impose this forced capitalization.

As is often the case, presumably a fake solution will be conceived. Since the last highpoint of the still current financial crisis, the EU countries have achieved enormously important regulatory progress. They have created numerous coordinating bodies for the previously nationally circumscribed financial regulatory agencies. The committee for the European Banking Authority (EBA) was established in London, where the density of banks is extremely high, and thus the bankers don’t have to travel very far in order to advise their regulators as to how they’d like to be monitored. That’s how the comprehensive bank testing action came about a half a year ago which was propagated as a comprehensive stress test – a PR action thought up by the banking associations. This PR action was not aimed at the public, but rather at the banking profession itself. The banks had begun to mutually distrust one another and not lend each other any more money. Only a few unimportant small institutes did not pass the test. The rest were evaluated as primed for the coming crisis. It’s at least pleasing to know that the bankers themselves did not believe in this bogus event.

Now the EU governments have resolved to approach things more seriously. The London-based EBA is supposed to once again test the same banks and determine if they have enough capital to withstand the stress of a Greek bankruptcy. Whoever does not possess enough capital will have a few weeks’ time in order to procure it on the financial markets. Whoever is unable to do that will receive state money by force. In order to prevent that, a few power breakfasts with the gentlemen and handful of ladies of the national and European supervisory agencies will be necessary. You can bet a good package of derivatives that the support program for the banks will be arbitrary and ineffective. That means furthermore that the planned bankruptcy of Greece will be postponed until all of Greece’s bonds are in the hands of the rescue fund or the ECB.

The second phase of the bank bailout thus presents itself as a truly complex rescue apparatus. It can’t and won’t work, for the simple reason that in a Europe with a common currency, it’s absurd to leave the rescue of the banks to the respective national governments. Furthermore, the bank rescue plan won’t change anything about the fact that a haircut for a country’s debt will set a precedent for other countries. Behind that is not just the danger of infection or the herd instinct of the markets, but the rational calculation of investors. At the moment, the ECB’s diligent purchase of state bonds is maintaining the illusion that Italian and Spanish bonds can still be brought to market.

First as Tragedy, then as Farce

In fact, both Spain and Italy – already since the last Council of the European Summit declarations of July 21 – can no longer borrow money on the open market at acceptable conditions without the support of the ECB. That has less to do with the policies of the Zapatero and Berlusconi governments, which are on their last legs, than with the fact that the euro governments have openly shown that they are no longer willing and capable of avoiding a haircut for a member country. Ever since, the markets have been awaiting decisions from the euro countries and their unofficial leader, Chancellor Merkel, concerning how the big operation will proceed. Since then, the crisis of the European banks has entered a new, acute stage. In any case, it is clear that even in the case of a haircut limited to the Greek state, the debt crisis will expand to other Southern euro countries and possibly even France.

Nicolas Sarkozy and Angela Merkel frequently and eagerly emphasize that they are completely united concerning the bank bailout. The opposite is the case. The French President wants a concerted European bank rescue, while Mrs. Merkel desires – as was the case in 2008 – a competition between the euro countries as to which one can most amply supports its banks. Mrs. Merkel presumably believes what the German banking associations are whispering in her ear, that this time around German banks will be less affected than last time. Disregarding the fact that both Germany and France are driven by their own respective interests, the German attitude is somewhat crazier than the French.

Actually, the euro debt crisis should have made clear to all the German nationalists in the government and parliament that every competitive advantage enjoyed by German banks and the German state budget due to the flight of investors to Germany will soon be used up, since the “partner countries” from which capital is fleeing will have to be supported even more. That is not a zero sum game. No, the negative effects far outweigh the nice little advantages that Germany enjoys as an investment location. A little bit of “solidarity” between states bound together by a common currency would be useful even for the strong ones.

However, the actual perversion consists in even conducting a state bailout of banks. The first time it was a tragedy, and the second time, to borrow a phrase from Karl Marx, it will be a farce. A tragedy, because the states massively rewarded those who brought the global economy to crisis, thus putting them in the position to repeat their harmful behavior, while the states put themselves in the position of hopeless debtors. We will soon experience the rude farce, when the flabbergasted bankers and politicians notice that their words and declarations are misunderstood by both the public and financial markets, and the painstakingly constructed rescue apparatus collapses without a sound like in an early silent movie.

The Outlandish Lehman Thesis

One could ask whether the rescue operations for the financial system conducted worldwide in 2008 were a good idea. This question can be answered in the affirmative if for no other reason than that the bankruptcy of a bank and the consequent run on financial institutions would have led to a dramatic deepening of the crisis. In 2008, politicians from all the main capitalist countries explicitly referred to the experience of the Great Depression of the 1930s. The bankruptcy of the Austrian Creditanstalt and the German Danatbank in 1931 decisively contributed to a dramatic aggravation of the crisis.

Similar arguments are made today when the claim is made that the US government allowing Lehman Brothers to go bankrupt in autumn 2008 and the resulting shock on the financial markets was the cause of the global recession in the real economy.

However, this thesis is unfounded. The downfall of Lehman Brothers was a consequence, not the cause, of the raging global financial crisis. In September of 2008, the global economy had already entered a recession, and not because one bank or a group of banks were having a hard time, but because the crisis-ridden end of the financial boom in summer 2007 abruptly ended the debt-fuelled effective consumer demand of average Americans. The world economic crisis 80 years ago was also not caused by the collapse of the banks named above. What was terrible about these bankruptcies was not so much the collapse of the banks themselves, but the reaction by economic policy makers, who intensified their restrictive course, with particularly fatal consequences in Germany. The case of Lehman Brothers, on the other hand, was completely different. It led to hectic activity on the part of economic policy makers in all important states, who on balance went in the right direction.

All the money that was pumped into the financial sector stabilized the banks. All the money pumped into stimulus packages stabilized effective demand. And this was decisive. It helped to avoid the disastrous downward spiral (declining demand – declining profits – declining investment – unemployment – declining demand) which in the world economic crisis of the 1930s led to depression. As a provisional result, it should be noted that the point is not so much whether the collapse of a bank can be avoided, but rather how a bankruptcy takes place and what kind of economic policy is conducted around it.

As can be seen today, the bank rescue actions of 2008 have their drawbacks. For one thing, they led to a plundering of state budgets. That dramatically increased the already high indebtedness of the states and contributed to the current state debt crisis in the euro area. The burden of unsustainably high levels of debt of private capital was shifted onto state budgets. The bailout of the banks in 2008 prevented high asset claims that would have become unserviceable in the long term from being maintained. The financial and economic crisis has not consummated its purifying effect. The financial sector is still far too big in relation to the real economy, is a burden upon the real economy, and is an impediment to economic growth.

Relatively Painless Shrinkage

Without massive shrinkage of the financial sector, there is no way out of the crisis. The current aggravation of the crisis offers a chance to shrink the financial sector in a way relatively painless for the citizenry. The point of departure could be not just a rolling over of Greece’s debt, but that of all states in the euro area. All existing debt of these states would be converted to new securities with a markdown of maybe 30 to 50 percent. The level of the markdown is less important. What is essential is to trade in debt instruments that have the same conditions for all states, the conditions being set not by the market, but unilaterally by the governments, for example at one percentage point above the rate of inflation.

Such a haircut would allow the financial system to implode immediately. In the long term, it would lose one of its most important sources of financing. In the short term, the states would have to bolster the banks and insurance companies, and take responsibility for their debt. However, they would also actually have to take over control and ownership of the institutions, audit their business models, and if necessary wind them down or recapitalize them.

Analog to the neoliberal shibboleth of the lean state, citizens would be served by a “lean financial sector”. It could simply and modestly organize credit and savings like it did in the square 1950s and 1960s.

Lucas Zeise is a financial columnist for the Financial Times Deutschland. His most recent book is Geld – der vertrackte Kern des Kapitalismus. Versuch über die politische Ökonomie des Finanzsektors (Cologne, 2010), published by PapyRossa Verlag.

The EU After the Euro Crisis

Mittwoch, Oktober 12th, 2011

(Translator’s note: the original German version of this article appeared in the September 16th, 2011 issue of analyse & kritik – zeitung für linke debatte und praxis)

The EU After the Euro Crisis

From the Death of Neoliberalism to Authoritarian Stabilization

by Ingo Stützle

For many leftists, the most recent global economic crisis brought with it a certain gratification. Even if emancipatory forces were not able to effect much in the last few years, one thing remained certain: we were right! However, it soon became evident that an economic crisis does not necessarily imply a political crisis. Slavoj Žižek hit the nail on the head in an interview: „Authoritarian capitalism is the victor in this crisis.” (www.zeit.de, August 25th, 2011) That was particularly evident in the EU.

Strife has broken out in the European house. With the crisis of European integration under neoliberal auspices, the political bond also seems to have been broken. Nobody will take responsibility for Europe as a whole, but everyone wants to take control at the same time. Above all, Germany is on a collision course. But why? Even the founding fathers of the Europe of the euro, Hans-Dietrich Genscher and Helmut Kohl, have let loose with admonishments concerning Angela Merkel’s policies. Is Merkel’s government simply lacking a clear direction, as has been asserted in the opinion pages of daily newspapers? Or is she incompetent, as the parliamentary opposition alleges? To answer these questions, a glance at the history of Germany’s European policy is helpful.

Since the founding of the European Economic Community (EEC), a common currency has always been a goal of integration. The aim was always to stabilize trade relationships and advance the integration of the domestic market. Already in the mid-1970s, the EEC countries conducted half of their foreign trade with each other. In 1979, the European Monetary System was founded – under Germany’s conditions of stability. Despite cooperation, the EMS was characterized by the competition between different currencies. This was not a construction error; rather, there was no other possibility. It is in the nature of the hierarchy of currencies that the functions of money are distributed unequally.

Authoritarian Capitalism is the Victor of the Crisis

The Deutsche Mark was the leading currency and all other currencies were subordinate to it. Trade and credit relationships were conducted primarily in Deutsche Marks. But the central banks of EMS countries were also forced to orient to the model of the Bundesbank. As a consequence of the stability and strength of the Deutsche Mark, the EMS countries had to stabilize their currencies in relation to the Deutsche Mark. That led among other things to high interest rates, since that was the only way for other currencies to assert themselves against the Deutsche Mark.

However, that also meant that central banks had to deploy monetary and interest rate policy decisively in order to stabilize exchange rates. There was therefore a decreased room for maneuver for using monetary policy in the interest of domestic economic goals and boosting the economy through cheap money in order to raise the level of employment. That led to an increased competitive advantage for Germany. France’s unit labor costs worsened between 1978 and 1987 by 5 to 7 percent and in Italy by around 34 to 41 percent. This rift was also expressed in the increasing inequalities of trade balances. This dynamic intensified with the Single European Act, which in 1985 initiated the neoliberal course of European integration. The aim was to create a unified domestic market and to completely deregulate the flow of capital.

At the end of the 1980s, France made its approval of the completion of the domestic market conditional upon acceptance of its demand for the transfer of authority over monetary policy to the European level. At the end of February 1988, against the resistance of the German Ministry of Finance and the Bundesbank, The Federal Ministry of Foreign Affairs under Hans-Dietrich Genscher (FDP) advocated a European currency zone and the creation of a European Central Bank. With the “Wende” of 1989, these foreign policy considerations acquired greater importance: France would only agree to the annexation of the German Democratic Republic if Germany was prepared to give up the Deutsche Mark.

However, Germany accepted the project of a currency union only under certain conditions: the European monetary zone was to be a union of stability, the European currency as strong as the Deutsche Mark. The political conditions for this needed to be created. The Maastricht criteria and the Stability and Growth Pact negotiated later introduced limits to state debt that were intended to secure solidity for the new currency. Germany lent additional force to its notion of financial self-discipline by having a no-bail-out-clause included: European states should not help each other out of a jam. By contrast, France’s attempt to incorporate two convergence criteria concerning unemployment in the agreement was shot down.

This stabilization policy is still being pursued under German pressure. Once again, the EU reveals itself as a vehicle for the “implementation of that which could not otherwise be readily implemented” (Wolf-Dieter Narr). This can be seen in the exemplary cases of the so-called European Semester and the Euro-Plus Pact. The European Central Bank welcomes this in its monthly report from March of this year: countries must use the “historic opportunity”; in view of the Euro crisis, “the setting up of effective institutions and the exercise of
peer pressure” is required. The goal must be “broadening and strengthening the existing framework for fiscal and macroeconomic surveillance in the EU.”

Everybody Wants to Take the Reins at the Same Time

This is precisely what is being executed within the framework of the European Semester. With the European Rescue Package, the European Commission resolved to intervene in national budget planning. At the beginning of each year, the European Commission presents a growth report to the Council of the European Union and the European Parliament, and later issues economic policy recommendations for individual countries. These guidelines, which are aimed at increasing competition and “sustainable finances”, are supposed to be taken into account by member states during budget preparations. Thus, even without a European financial policy, budget debates have a European dimension. However, the point here is not so much the harmonization of economic policy. Competitiveness is to be supported and the Stability Pact strengthened, which has one goal above all else: the prevention of state debt.

The Euro-Plus Pact pitted Germany against France. It is an attempt to supplement the concessions made for the stabilization of the Euro with a tightening of competition and stability policy. The official goal of the pact is the promotion of competitiveness and employment, contributing to the long-term sustainability of state finances, and strengthening financial stability. To achieve this, the EU is supposed to intervene in the wage formation process: “To assess whether wages are evolving in line with productivity, unit labour costs (ULC) will be monitored over a period of time, by comparing with developments in other euro area countries and in the main comparable trading partners. For each country, ULCs will be assessed for the economy as a whole and for each major sector”. Wages should not endanger the competitiveness of each country, which amounts to a de facto wage reduction.

But the welfare state is also a target: the “sustainability of public finances” is to be guaranteed and improved through the long-term “sustainability of pensions, health care, and benefits”. The participating states are to make proposals and assume concrete national obligations every year. Measures remain the responsibility of each individual country; however the pact provides a catalogue of criteria – the benchmark being the most high-performance country. It seems likely that this will be Germany. Hans-Jürgen Urban of the metal trades union IG Metall described this “new institutional arrangement” as “a regime of authoritarian stability”.

This tightening of stability policy can be traced back to Germany’s initiative. Until the end of 2009, the German government played down the problem and embarked upon a collision course within Europe. Merkel lectured that Greece was not the only country with a deficit and that one should “not overstate” the problem. The economic affairs and finance ministers constantly pointed out that Germany would not pay the costs for the mismanagement of other states – and all this at a time where it was already obviously that Greece was de facto bankrupt. Even at the end of March, not even a month before the first rescue package, Merkel insisted upon postponing the decision until after the elections in the state of North Rhine-Westphalia.

Germany Loses Interest in the EU

Germany could not keep holding out. But even after the first rescue package was passed, Germany threatened with a stop to all aid and demanded punitive interest payments instead of credit at reduced interest rates as proposed by the ECB. Merkel even advocated revoking the voting rights within Europe for countries exceeding deficit limits. In the case of rescuing the euro, Germany sought escalation rather than compromise. At the moment, Germany is blocking all demands for the introduction of Eurobonds. The question remains as to why Germany is pursuing this course. During the introduction of the euro, the situation was different. Out of its own self-interest, Germany took on an increased responsibility for Europe – in order to profit economically in the future.

The thesis that all this can be traced back to economic causes is rather plausible. Thus, the New York Times of July 18th, 2011 notes that as a result of the debt crisis and austerity programs, many EU countries are stagnating in recession or plunging deeper into crisis. As a result, “Germany is increasingly deploying its money and energy outside the euro zone to fuel its robust growth.” The economic relevance of the euro zone is declining for Germany – with important political consequences for Germany’s European policy: “As Germany becomes less dependent on euro zone markets, there are signs that it is becoming stricter with its ailing partners, like Greece, Italy and Portugal, adding to the pressures already straining European unity.”

It is still the case that 40.9% of Germany’s exports are to other euro zone countries, but of greater interest are the growing exports to countries outside of the euro zone since the introduction of the euro (Süddeutsche Zeitung, September 9th, 2011). Between the introduction of the euro in 1999 and the year 2010, the export to euro countries rose by 5%. However, during the same period of time, Germany’s global exports rose by 6.5%. The importance of the euro zone for German exports thus sank from 46% to 41%. By comparison, the importance of trade with countries outside of the euro zone rose from 54% to 59% (heute journal, September 8th, 2011). This trend will continue as a result of the course of austerity and recession in Europe.

Is that sufficient as a reason for Germany’s political course? No, definitely not. Ultimately, capital itself is split. Whereas the head of the Confederation of German Employers’ Associations (BDA), Dieter Hundt, vociferously opposed Eurobonds (Die Welt, August 29th, 2011) and the former Federation of German Industries (BDI) head Hans-Olaf Henkel even strongly advocates a splitting up of the euro zone (analyse und kritik number 556), the current BDI President Hans-Peter Keitel knows that Germany has to make sacrifices to save the Euro: “The BDI is a vehement advocate of European integration. We need a stable community. For this, the euro is indispensable…we want to move forward and invest in Europe, in the euro – even if it causes us pain”. (Berliner Zeitung, August 29th, 2011)

In addition to these conflicts within capital, there are further points which lead to governmental policy being contradictory. At the latest since the failure of the EU Constitution due to its rejection by the referenda in France and the Netherlands, Europe lacks a political project. The economic integration process cannot be placed alongside a positive political project. The goal of a political union still vaguely exists, but there is no conception of what this might look like. What remains is the well-trodden path of stabilization policy.

Furthermore, crises are always phases in which two processes occur in parallel. On the one hand, every country attempts to emerge as unscathed as possible from the crisis – even at the cost of other countries or the dominant rules of the game such as the stability pact. On the other hand, crises are also phases in which the opportunity is used to impose national interests. That can be seen above all in the examples of Germany and France. Whereas Germany attempts to press ahead with the policy of stabilization, France is attempting to establish its long-standing cause of a European system of economic governance – until now with only moderate success.

The EU is Lacking a Positive Political Project

What also cannot be neglected is the populist aspect that also contributes to the contradictory activity of the German government. Governmental policy always aims to conceal the class character of politics – especially during a crisis. That is why an appeal is issued to the national collective: “We Germans have been living above our means”. By the same token, a large part of the German population feels like it has been shafted by “Greece”. But this racist resentment is not solely caused by German political elites; it is deeply rooted in the population. Because the CDU does not want to lose the next election, on the one hand it plays to the racist discourse about “bankrupt countries” while at the same time defending rescue measures as being without alternative.

This complicated situation constitutes the background for the debate around European policy. The political elite is not clear on the question of whether increased responsibility for Europe or a confrontational strategy is better for Germany. This constellation is also present in the conflict concerning Eurobonds. If one assumes that European bonds – like the euro – will be introduced against German resistance, there remains solely the question of how Germany will impose its interests in the concrete implementation. Then it will also be revealed which political forces have managed to win the upper hand.