Andreas Whittam Smith: I don't believe the eurozone can be made to work

Poland's alarm is a true measure of the crisis. It is more vivid than the warning by the Chancellor

Share

When Poland's Foreign Minister refers to German tanks and Russian missiles, as Radoslaw Sikorski did on Monday, one sits up. Poland suffered repeated invasions by Germany and Russia from the late 18th century until the last Soviet troops withdrew in 1993. Poland was truly independent only between 1918 and 1939. However, in a remarkable speech, by turns passionate and frank, Mr Sikorski was not breathing defiance of traditional enemies. Quite the reverse. He was talking about the eurozone. And he was pleading with Germany.

Mr Sikorski asked himself what did he regard as the biggest threat to the security and prosperity of Poland in the last week of November 2011? Not German tanks nor even Russian missiles, which "President Dmitry Medvedev has just threatened to deploy on the EU's border". Instead, he made this demand of Germany. "That, for its own sake and for ours, it helps the eurozone survive and prosper. Nobody else can do it. I will probably be the first Polish Foreign Minister in history to say this, but here it is: I fear German power less than I begin to fear its inactivity. You have become Europe's indispensable nation. You may not fail to lead: not dominate, but to lead in reform."

That statement is the true measure of the eurozone crisis. It was more vivid than the warning by the Chancellor of the Exchequer, Mr Osborne, in his Autumn Statement and it strikes home harder than the comments of the Organisation for Economic Co-operation and Developmen (OECD) when it said that events could plunge the euro area into a deep recession.

Very interestingly, Mr Sikorski in his speech tackled Germany's sense of victimhood. This feeling goes right back to the devastating Thirty Years War in the 17th century that was waged across German-speaking lands by foreign powers, to Napoleon's invasion 150 years later that redrew the map of the German states, to the "stab-in-the-back" explanation of defeat in the First World War, and to the division into two states following the Second World War. Mr Sikorski understands all that and told Germany such suspicion is inappropriate today.

"We ask Berlin to admit that it is the biggest beneficiary of current arrangements and that it therefore has the biggest obligation to make them sustainable. As Germany knows best, she is not an innocent victim of others' profligacy." He was referring to the low value of the euro, which has substantially helped German's export business and the safe-haven strength of German bonds that means that German companies can borrow cheaply. In other words, by doing what is needed to resolve the eurozone crisis, Germany would not be the dupe of lazy, tax-dodging Greeks and Italians.

Mr Sikorski also had a go at German self-righteousness. He reminded his neighbour that it should have known better when it broke the stability and growth pact that eurozone countries signed so as to avoid the very problems they now face. And neither have their banks been models of virtue. The banking crisis actually began in Germany. The very first bank in trouble over US subprime loans was IKB Deutsche Industriebank in August 2007.

Poland is not yet a member of the eurozone, but it intends to be. It is willing to accept very tight integration between states. It envisages that when drawing up national budgets, for instance, finance ministers would first have to show their books to their fellow members. Eurozone countries which broke the stability and growth pact would face sanctions that would be almost impossible to block. Rules would be introduced, not as directives, but as regulations. And, finally, and this is what Germany is currently blocking, the European Central Bank would become a proper central bank, a lender of last resort underpinning the credibility of the entire eurozone.

If all this came about, it would undoubtedly "solve" the eurozone crisis, and progress towards such arrangements would substantially soothe financial markets. Except that I don't believe it. Imagine this scenario. The finance minister of a eurozone state comes before his national parliament to present the annual budget. The minister says that Brussels has approved it. But suppose that the national parliament doesn't approve it or perhaps doesn't approve certain parts. What happens then? Does the minister engage in shuttle diplomacy between his national parliament and Brussels until an accord is reached? And, if not, would democratically elected members be prepared to accept a Brussels veto?

It is because of problems like this that I don't believe the eurozone can be made to work. The loss of sovereignty for member states is likely to be more than their citizens would tolerate. We would move from a financial crisis to a democratic crisis. It may be significant that in his fascinating speech, the Polish Foreign Minister made no mention of the European Parliament and how its powers might be enhanced in the new circumstances. It was a surprising omission.

a.whittamsmith@independent.co.uk

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Bookkeeper / Office Co-ordinator

£9 per hour: Recruitment Genius: This role is based within a small family run ...

Recruitment Genius: Designer - Print & Digital

£28000 - £32000 per annum: Recruitment Genius: This Design and marketing agenc...

Recruitment Genius: Quantity Surveyor

£46000 per annum: Recruitment Genius: This property investment firm are lookin...

Recruitment Genius: Telesales / Telemarketing Executive - OTE £30k / £35k plus

£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...

Day In a Page

Read Next
 

Errors & Omissions: When is a baroness not a baroness? Titles still cause confusion

Guy Keleny
 

CPAC 2015: What I learnt from the US — and what the US could learn from Ukip

Nigel Farage
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?