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Eurozone

Two's a crowd in euro rescue

PUBLISHED : Tuesday, 03 January, 2012, 12:00am
UPDATED : Tuesday, 03 January, 2012, 12:00am

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Who says the Germans do not have a sense of humour? To give the lie to that often-made claim, German state broadcaster ARD has made a satirical skit of the country's - and the world's - most watched TV programme, adapted to show the leaders of France and Germany in the starring roles.

President Nicolas Sarkozy plays James, the stumbling drunken butler, and Chancellor Angela Merkel is Miss Sophie, the ancient mistress of the grand house.

In the jest of the moment, it gets close to the difficult economic and political truth of Europe in 2012.

The conclusion of the skit follows the original by showing the butler, with Sarkozy's head on the black-suited figure, leading Miss Sophie, with Merkel's head, up the stairs. As he holds her arm, Sarkozy promises to give Merkel his 'triple A'.

Even though the dialogue is in German, the YouTube version of the skit has been viewed hundreds of thousands of times.

With its pointed economic and political comments, the skit makes the original show look old-fashioned. The 18-minute original sketch is titled Dinner for One and shows Miss Sophie at her 90th birthday party toasting her friends, who have long departed but she assumes they are still at the table. James sups their drinks and stumbles round the table, almost tripping on the tigerskin rug.

Dinner for One, which actually features British actors, has been shown on German television stations every year on New Year's Eve since being made in 1963, and has become something of a cult hit.

The satirical version is not so gently mannered. It is titled the 90th Euro Rescue Summit - Or Euros for No One, and has Merkel drinking to her long-dead friends, including former Greek prime minister George Papandreou and former Spanish prime minister Jose Luis Rodriguez Zapatero.

At one stage, Merkel reprimands Britain's David Cameron, saying: 'Don't forget we speak German in Europe.' Sarkozy pretends to be Cameron and says to Merkel in English, 'You are looking younger than ever', before continuing in German, 'You are looking richer than ever.' Sarkozy gets so tipsy drinking for absent friends that Merkel warns him, 'Nicolas, think of your credit rating.'

The narrator is heard saying, 'This is what happens every euro-rescue summit. Whether or not anyone else is there, it is just these two doing everything themselves.'

That is a most apposite comment, with the two leaders preparing for yet another meeting next week to firm up their plans for stricter tax and spending rules and closer European economic integration, which they plan to enshrine in law.

But even iron logic runs into the cold steel of political opposition. Opinion polls show that people in many euro countries, and certainly in non-euro countries like Britain, are adamantly opposed to allowing 'eurocrats' to decide on taxes and whether their governments can run budget surpluses or deficits. The fact that the eurocrats are not elected and their policies - not to mention their salaries - add to the costs of doing business adds to Europe's democratic deficit.

Neither Sarkozy nor Merkel has shown willingness to sacrifice national power to a European state. Merkel, with France in tow, believes that her own policies are the right ones and others must fall in line, or the German electorate, unwilling to pay the price of bailing out the 'Club Med' southern European countries, will vote her out. This is not a European policy; it is an exercise of raw, even brutal, German power.

But there is also an economic deficit in what Merkozy - as the duo are popularly called - are planning. Some economists go so far as to say that the plans for fiscal union will be irrelevant because the other essential planks in the Merkozy economic platform, demanding austerity, are so rotten as to threaten Europe.

Merkel is sticking to her guns that excessive government spending and deficits created the economic mess, and bringing them under control is the painful but essential way out. Merkel and Sarkozy have conveniently forgotten that not everyone can be creditors at the same time, and that creditors and debtors are matched pairs.

Europe's economic prospects are grim. Citigroup forecasts that gross domestic product in the euro zone will contract by 1.2 per cent this year. Even Germany may record zero or negative growth. How much unemployment can any country bear, especially when social security is removed? Nothing in the Merkozy plan offers any hope.

Any attempt to create fiscal union must first allow time to create fundamental reforms by providing interest relief for weaker countries. It must also address relative unit-labour-cost competitiveness and restructure excess debt. For all the European talk, Germans may be the most regional-centric EU country, and only smaller countries like Belgium understand the European ideal.

So the leaders are left with a less-than-perfect union. But the perils of dissolving it may keep it together. Even if only Greece left the euro, analysts say martial law and strict capital controls will have to be imposed to stem the panic. If the euro breaks up, Europe will face chaos - which makes it more puzzling that Merkel and Sarkozy cannot offer a plan with greater vision than saving their own skins.

Euro4.3b

Germany's contribution to a new euro-zone bailout fund called the European Stability Mechanism, planned to be introduced this year

 

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