German and Italian Finances Key to EU Future

Home/Uncategorized/German and Italian Finances Key to EU Future

German and Italian Finances Key to EU Future

During a 1968 Cabinet meeting in Paris President Charles De Gaulle asked his renowned Minister of Cultural Affairs Andre Malraux (1901-1976) to summarize the challenges facing France’s two major partners in the newly formed “Common Market”- predecessor to today’s European Union (EU). Combining his well-known wit and wisdom Malraux famously replied “the problems in Germany are serious but not hopeless, while those in Italy are hopeless but not serious”.

A half-century later if French President Emmanuel Macron were to ask the same question posed by his illustrious predecessor the answer would be exactly the same.  Now as then circumstances in Germany and Italy will be decisive in shaping the future of the EU.

While EU leaders- e.g. Jean-Claude Juncker, Mario Draghi- are relentlessly upbeat in their assessments of EU prospects, their public optimism masks an ominous shifting of the tectonic plates undergirding the political and economic structure of the European Union.  Central to this altered reality are the disturbing and unexpected results of the most recent national elections in both Germany and Italy.

On the surface the most shocking of these two results was that in Italy, which as I noted in a March article (European Union: The Gathering Storm) saw “69% of voters endorsing radical anti-establishment parties espousing improbable and contradictory policy solutions but making clear popular fury at the political class that has ruled the country for generations”.

Many observers hopefully assumed the highly disparate constituencies of the populist parties would preclude any workable coalition among them.  Hence the great surprise when the two largest of these parties- the 5-Star Movement and the Northern League- announced tentative agreement on a left-right populist coalition that could command a legislative majority.

Beyond a dramatic but unfunded increase in welfare payments to poor Italians, and reversal of the hard won pension reforms of the previous government, the two parties are making demands that if granted would up-end the very foundation of EU financial rules, most notably their insistence on exemption from the 3% cap on national budget deficits and cancellation of the 250 billion euro debt owed to the European Central Bank.  Both parties are also threatening to hold a referendum on leaving the EU if Brussels is unresponsive to Italian demands.  Add to this the two parties commitment to lifting all sanctions on Russia and the growing alarm in Brussels is quite understandable.   The “New Italy” is potentially a threat to the entire EU.

The problems in Germany are less obvious and somewhat obscured by that country’s long- standing reputation for financial strength and rectitude.  They derive from the singular weakness of the governing coalition Angela Merkel put together after six months fruitless attempts to build stronger combinations.  They also reflect the growing tension between Merkel’s Christian Democratic Union (CDU) and its Bavarian sister party the Christian Social Union (CSU).

In order to entice the reluctant Socialists (SPD) to join her government Merkel had to promise them large increases in social welfare spending.  Yet to placate the more conservative CSU she had to agree to sharp reductions in overall spending.  Reconciling these conflicting impulses has led to cancelling much needed infrastructure investment and most ominously further weakening an already depleted defense budget.

The long term decimation of the once formidable German military was highlighted by a recent expose in the highly influential weekly Der Spiegel which revealed that only four of the Luftwaffe’s 128 premier Typhoon fighter jets are combat ready, none of Germany’s six submarine’s can put to sea, all eight attack helicopters are unfit to fly, and only 95 of Germany’s 244 battle tanks are operational.

The resulting scandal had the further effect of infuriating American military authorities that have long been critical of an affluent Germany’s failure to meet its NATO obligation of spending 2% of GDP on defense.

Clearly if Germans are unwilling to increase spending on their own defense they will be even less willing to increase spending on the EU so Italians can retire earlier.

Behind all these circumstances lies a truth too long ignored, namely that national histories, character, politics, and elections remain the dynamic forces in European affairs, not the Treaty of Maastricht, the European Parliament, or the ambitions of Brussels to expand its authority at the expense of national sovereignty and despite the widespread opposition of ordinary citizens.

If the EU is to have a viable future it might usefully harken back to its successful origins as a collaboration promoting economic prosperity not an instrument seeking political dominance.


William Moloney’s columns have appeared in the Wall St. Journal, USA Today, Washington Post, Washington Times, Philadelphia Inquirer, Baltimore Sun, Denver Post and Human Events.


  1. kevin9 June 20, 2018 at 6:35 am - Reply

    Good content, but it would be better if in future you can talk about more about this subject.

  2. Megan June 14, 2018 at 2:12 pm - Reply

    I completely agree with the past viewer. I presume the fantastic motivation and excellent feedback are wonderful foundation to establish high quality content.

  3. Amelia June 14, 2018 at 2:11 pm - Reply

    In my advice, not many bloggers own so countless suggestions to make new, absorbing posts. Many thanks for creating it and I wish you did not lose the determination to make the new ones!

  4. Sylvie June 14, 2018 at 2:10 pm - Reply

    Good writer! Thank you so much for getting here and sharing so well articles. There is somebody who enjoy it and state thank you!

  5. Madison June 14, 2018 at 2:10 pm - Reply

    Hey. There is an issue for everybody who seek high excellence posts. Will you try to find different website? If you consult me I will say NO. That website is greatest for me!

  6. Angela June 13, 2018 at 12:38 pm - Reply

    Hey everybody! It’s very cool article. I’m amazed that you are so proficient. I did not esteem you!

  7. Karen June 13, 2018 at 12:37 pm - Reply

    Very good document! It is actually a genuine fun to look over it. Congratulation! Well done! I am only holding out for more messages.

  8. Maria June 13, 2018 at 12:36 pm - Reply

    I should accept that it really is 1 of the most interesting content I have actually understand. It really is also professionally composed. I am an British teacher so I see what I mean.

  9. Susan June 13, 2018 at 12:36 pm - Reply

    Here is a brief doubt to ask – how to generate such a excellent review? It has almost all ingredients what make a great article. There is a getting name and fascinating articles. Well done!

  10. wuxiaworld June 13, 2018 at 3:40 am - Reply

    I did not know it until I read your post

  11. Bruce35 June 13, 2018 at 2:55 am - Reply

    I very much like to read such information, they have very good content.

  12. temple run 3 June 12, 2018 at 9:00 pm - Reply

    I like your post, it is very easy to understand and detailed, I hope you have many good posts to share, thank you.

  13. RemoteWipe June 4, 2018 at 11:18 am - Reply

    The priorities of other nations are difficult to influence and sadly history often repeats itself. Consider the digital age and the monumental risks of data sharing, data privacy, data breach and the like. We are seeing a huge backlash where consumers are demanding data protection but they themselves don’t protect their digital life – they share their data at will and openly. People need to take all of these topics seriously and get engaged. There are countless solutions for many of these problems. Keep up the great work and remember remote wipe data breach protection from is the way to go if you need to protect Windows, Apple, Android or Linux devices!

  14. Eric232 May 26, 2018 at 11:33 pm - Reply

    Thanks for sharing the useful and informative posts with us.

Leave A Comment