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Europeans Squabble over the Financial Crisis, Too

2:13 PM, Nov 13, 2008 • By ULF GARTZKE
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In a recent Financial Times interview, Germany's former Green foreign minister Joschka Fischer slams Chancellor Angela Merkel for renouncing "any claim to leadership in shaping Europe's response to the financial and economic crises" and for "acting purely nationally". In contrast, Fischer praises UK prime minister Gordon Brown and French President Nicolas Sarkozy for having "made more decisive contributions" to help solve the ongoing crisis. Furthermore, Fischer describes the $15.3 billion fiscal stimulus package passed by Berlin last week only as "business as usual, not a strategic response to the crisis". Finally, in view of the severe slowdown now threatening the German economy, Mr. Fischer called for "far more decisive action", including large-scale infrastructure investments. "We are now wasting whatever margin of manoeuvre we still have left", Fischer added.

Well, last time I checked, the 60-year-old high school drop-out is not exactly known to be an authority on complex international economic and financial matters. In fact, Mr. Fischer spent much of his young adult life (he turned 20 in 1968…) as part of Germany's radical left-wing student movement, fighting the Capitalist establishment, trying to organize workers at car manufacturer Opel for the coming Communist revolution, battling German police in violent street demonstrations, and so on. You get the picture.But who knows, maybe Joschka Fischer's recent stint as a Visiting Professor at Princeton University and his latest gig as a Senior Strategic Counsel to The Albright Group have brought him at least somewhat up to speed on economics. For example, it is certainly encouraging to see that Fischer's call for "far more decisive action" in terms of large-scale infrastructure investments is right on target. Of course, what the long-time Über-Green conveniently overlooks is the fact that his party's single-issue ideology and its grass-roots activists have ranked among the biggest obstacles to important infrastructure investments in Germany over the past three decades: airport extensions, power plants, port expansions, Transrapid high-speed rail networks, etc. The list of large-scale infrastructure projects sacrificed on the altar of environmental protection goes on and on.

Finally, what about Fischer's assertion that Merkel should have taken on a strong EU-wide leadership role in dealing with the financial crisis? Well, in EU parlance, "German leadership" has generally been code for transferring billions and billions of German taxpayer money to unelected bureaucrats in Brussels and EU member states ranging from Portugal and Spain to Romania and Estonia (and let's not forget the ultra-expensive EU subsidies for French farmers). Germany, after all, has long been the biggest EU net contributor. In this context, Chancellor Merkel was right to strongly reject Nicolas Sarkozy's protectionist plan for an EU-wide type sovereign wealth fund designed to buy stakes in major, strategic European companies. Interestingly, Mr. Fischer at least acknowledged in his FT interview that the Sarkozy plan was off the mark: "Don't get me wrong, I don't think the French proposals are the right ones. We don't need a new protectionism, but only to say ‘no' is not enough." Well, if it had not been for Merkel's strong opposition, Sarkozy's ill-conceived attempt to export his country's version of "patriotisme économique" could have meant very bad news for Europe and its major economic partners in America and beyond.