If ‘Mutti’ Merkel doesn’t pay up, there’ll be nothing rosy in her Euroland back garden

Bismark, the founder of modern Germany, once remarked that ‘politics wasn’t an exact science’, but failed to add that those engaged in its dark arts should carry a health warning, rather like a packet of cigarettes.

So, the day I start to trust forked-tongued politicians, book me a slab in the mortuary or – worse still – a place in the nearest home for gaga, financially-distressed  gentlefolk, where I can dribble away my days, as a nurse feeds me Complan through a bendy straw.

At least, Baroness Thatcher was a straight-talker in whatever guise people viewed her…the Tory radical, who did a pretty fair impression of that compulsive thrasher, Wackford Squeers, in Dickens’ Nicholas Nickleby, or the Blessed St. Margaret, whose good works saved Britain.

That debate will rage long after last Wednesday’s ‘ceremonial’ funeral – an event of such grandeur and expense (£10M), she’s still dividing a nation. So, there’s simply no escaping the impact of politicians, dead or alive.

That suspicion crossed my mind last week last week, as my gestor – here that’s a financial administration or accountant – filled out our Modelo 720, the declaration all Spanish residents must file before April 30, if they have more than €50K of assets squirreled away beyond the shores of this sun-kissed realm.

Pesky bureauprats harvesting information at the behest of their political masters always makes me bristle. And, after the Cyprus farrago – when the government ram-raided private bank accounts to comply with a €multi-billion loan from the Troika (European Central Bank+IMF+EU Commission) – who’s to say what’s round the proverbial corner.

BANK HEIST: Cypriots protest after their bank accounts were raid to pay for the Troika's loan

BANK HEIST: Cypriots protest after their bank accounts were raid to pay for the Troika’s loan

‘The declaration is only to stop money-laundering and nothing to fear,’ Juan the gestor assured me. ‘Spain’s finance minister has said so.’

‘Oh, I’ll certainly sleep easier tonight if a politician said that,’ I told him, my irony falling on deaf ears.

Then I learned of a new, little threat being hatched by Germany’s financial wunderkinds: Making better-off home-owners cough up towards bailing out Eurozone members, skinter than a church mouse’s scullery maid.

This latest proposal from Angela Merkel’s brains’ trust – a.k.a. the ‘Five Wise Men’ – comes with a blaring caveat: their job is to think the unthinkable, but their ideas often translate into policies.

Before this sends paroxysm through more than 400,000 Brits with properties in Spain – plus innumerable other foreign nationals, not to say a few Germans – here’s the good news…to date, Mariono Rajoy’s centre-Right government has managed to keep its begging bowl in Madrid, forestalling the Troika’s torture rack by introducing its own oppressive austerity measures.

So the pain in Spain stays local in the main.

But there’s no mistaking Berlin’s chagrin at having to back-stop loans to whom it perceives as feckless Latins and grabbing Greeks, whose countries host pied-a-terres belonging to some with Europe’s deepest pockets.

As the London Daily Telegraph’s Ambrose Pritchard Evans noted, ‘Taxes on property or other assets would mark a significant change in Europe’s approach to funding bail-outs…until now, the cost of rescue packages has fallen largely on people who invest in those country’s bonds, or – in the case of Cyprus – bank accounts.’

However, Professor Peter Bofinger, one of the German Chancellor’s advisers, says levies on bank accounts are a mistake, because the really whiffy rich can move moolah around at the click of a computer keyboard.

What the ‘haves’ cannot do, however, is shift bricks and mortar with the same alacrity. So why not hit holiday/second homes?

With Merkel facing re-election in September, ‘Mutti’ – ‘Mummy’ as she’s nicknamed in by the German media – needs to appease an electorate angry their uber-rich nation is forced to act as Europe’s backer of last resort, hence their growing attraction to the new, Alternative für Deutschland party, a sort of UKIP in lederhosen.

MUTTERS ABOUT MUTTI: Germans are angry about bail-outs for the 'better-offs' in the Eurozone's south

MUTTERS ABOUT MUTTI: Germans are angry about bail-outs for the ‘better-offs’ in the Eurozone’s south

Meanwhile, her Five Wise Men have siezed on an inconvenient truth: Germans are generally not as financially comfy as their southern Eurozone cousins, a point recently highlighted by a European Central Bank study.

Incredible as it seems from the country that gave the world BMW, Mercedes and Porsche, less than half of Germans own their own homes and the median (or mid-point) wealth of the average Frankfurter is €51,000, compared with €183,000 for a Spaniard, €172,000 for an Italian and – wait for it – €267,000 for a Cypriot.

No, honestly, I’m not making those figures up.

Conversely, there are counter claims by the new ‘have-nots’ of Club Med, who ask – not without cause – which country had gained most from the great United States of Euroland experiment?

The answer is self-evidently Germany, which has grown exponentially, outstripping the culturally and historically diverse southern states, regardless of its feted Anglo-Saxon work ethic (though, knowing the long hours an average Spaniard puts into a job, that’s debatable).

Perhaps this can be attributed to better organisation and discipline; of being less ham-strung by needless bureaucracy and statism; of not imagining you could leverage your way into competing with the irresistible Teutonic juggernaut by making your territory the playground of Europe, gracias to a geographic gift of climate.

However, the incontrovertible reality is Germany’s vision of a one-size-fits all Eurozone isn’t working. And the cost of keeping it afloat will long be measured in billions – maybe trillions, if Spain or Italy goes bust – to boost economies than can’t possibly imitate its example.

The USofA works on the premise that the richest states (e.g. California and New York) top up the poorest (i.e. Arkansas and Mississippi) via taxation and few cavil at that.

Which is why, on the near horizon at least, a USofE is unlikely to aspire to America’s motto, ‘E pluribus unum’ – ‘Out of many, one’. Because cultural and historical diversity no longer matter as archly in the home of the brave than on a continent ravaged by centuries of war, a Tower of Babel where memories are long.

A USofE might be the theoretical pipedream of many politicians. But the cold, harsh facts contradict every economic principle since the demise of feudalism.

Yes, a free market – where goods, money and people are interchangeable – can survive and prosper, but a political-monetary-fiscal entity is an altogether different illusion. And, thus far, a single currency imposed on disparate nations has never succeeded, as a Latin one failed in 1927 and a Scandinavian version – linked to the Gold Standard – between Sweden, Denmark and Norway bit the dust in1914.

So, if Germany wants a neat and tidy Eurozone back garden, tended by Spanish vintners, Greeks mowing its lawn and Portugeezers pruning orange groves, it must pay – or go its own way.


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