Germany’s warning

Over the past days, European news, notably the most important, regards Germany. First, the German Constitutional Court has decided to postpone until 12 September all decisions on the compatibility of the European Stability Mechanism, ESM, and the Fiscal Compact with its national legal system. The two Community agreements have been ratified by the Bundestag, but before entering into force they must obtain the green light of the judges in Karlsruhe along with the countersignature of President Gauck.Second, in a TV interview Chancellor Angela Merkel reiterated what she already said on several occasions, namely, that the solidarity of Germany and the EU is possible in the case of Countries with budget deficits provided that they undertake specific commitments for reforms and budget discipline. "If there is a common currency it means that there are advantages and obligations and that the political decisions of each member affect other Countries", Merkel said in the interview broadcast by the TV network ZDF. She added: "We must give the EU institutions more power to intervene" in case of countries "that don’t respect the rules". Berlin could once more act as the one who raises its voice to punish other less virtuous eurozone partners, demonstrating a lack of solidarity. We are all aware that Chancellor Merkel has serious internal problems, both political and towards the public opinion, which tends to consider its government too permissive towards Mediterranean states, incapable – according to the phrasing of German media, and of British and Northern European press – and northern Europe – of controlling public accounts.In all likelihood Chancellor doesn’t intends to focus only on next year’s elections. Angela Merkel raises a real problem that involves the Eurozone and the EU as a whole. And, although at times she may appear cynical, there is a glimpse of a solution in the short and long term. In the short term she gives the green light to financial aids, which, however, are subject to "compliance" (recipients must show they won’t squander and will follow the path of discipline, a prerequisite for growth and the only true answer to the economic crisis and national budgets). In the long run she strongly demands the growth of the "political Europe", understood as economic and monetary union, with strict common rules on government budgets planning.A "control at the source", would thus avoid addressing the dramatic situations of recent years, from Ireland to Portugal, from Greece to Spain, not to mention a possible case-Italy, where the single currency – and with it real economy and employment – has been questioned due to its severe imbalances in the national budget. Thus Germany is launching a signal that must be seized. And nor does it fail to offer a credible way out, which entails more responsibility and more Europe. It can certainly be argued that the coarse mode of action of the Chancellor does not facilitate a political settlement, but trivializing its content would be a mistake with disastrous consequences.Signs of possible agreements, notably as relates to the anti-spread shield and the ESM, could come from the meeting of the financial ministers of the EU scheduled for July 20, or from the almost certain teleconference reunion of the heads of Government or State of July 25. There remains the fact that once more, the times and the rites of politics don’t coincide with those of financial markets, and in the meantime other countries could be the target of speculation, without the activity of the "shield" and of the ESM. In that case the consequences would be unforeseeable.