Friday, June 1, 2012

Is Germany Ready for More Integration?

An article in yesterday's Financial Times states that there are substancial discussions going on behind the scenes in Germany regarding further integration.  The official position of Germany fails to indicate that because Germany is concerned that comments might negatively influence some important elections coming up--the Irish referendum, elections in Greece, and parliamentary elections in France.  Further, there is always a concern of spooking financial markets.

According to the article, there is a broad consensus among the two major parties and the Green Party that greater fiscal integration is needed. It quotes Joschka Fischer, former foreign minister and member of the Green Party, “We are now very close to break-up,” he said. “Either we move ahead very fast, or we will go back to disintegrating. Will we share our wealth? Will we integrate our debt? Will we transfer our power to common institutions?”

Presumably, Germany is willing to put all of these on the negotiating table, but further fiscal integration also has to be on the table. The author also cites a recent Pew Global Attitudes Poll that shows a majority of Germans favor more integration, that is not the case in France, Italy or Greece.

This is not the impression one gets from most news stories and op-ed pieces.  The poll also found Chancellor Merkel the most respected leader in most countries--Greece excepted--which is inconsistent with the reporting that Merkel is isolated from the rest of the leaders.

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