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Generational Dynamics Web Log for 28-Jun-2011
28-Jun-11 News -- German support for bailout of Greece falls sharply

Web Log - June, 2011

28-Jun-11 News -- German support for bailout of Greece falls sharply

The people versus their political representatives

German support for bailout of Greece falls sharply

The analysts are holding their breath, waiting for Greece's Parliament to vote on more austerity measures later this week. The austerity measures include higher taxes, lower benefits, sales of assets, and privatizations of public companies. According to one analyst I heard today, the package of new austerity measures will cost each Greek citizen $2,795 euros per year, equivalent to one month's income for a family. These austerity measures are demanded by the European Union (EU) and the International Monetary Fund (IMF), as a condition for new bailout money to Greece to avoid bankruptcy as early as July 15.

Anti-austerity protester in Athens (AFP)

Anti-austerity protester in Athens (AFP)

Nonetheless, a new poll indicates that most Greeks would rather accept the harsh terms of the austerity package, rather than see their country go bankrupt, according to AFP. 57% of those polled said the country should accept the deal, while only 22.7% said it should be rejected, "even at the cost of bankruptcy."

But while the Greek people may be willing to accept the deal as the lesser of two evils, a poll of the German people says that they're becoming turning strongly against giving Greece another bailout, even if not doing so means the end of the euro.

This situation is leading to a major confrontation between the German people and their political representatives, according to an article in the center-right Frankfurter Allgemeine Sonntagszeitung. Rough translation:

"The common man is afraid. For almost an hour, the politician had to listen to speakers on the stage ask, "Why do we have to save Greece?" Because the EU means peace, he says. Because Germany has nine neighbors. Because we should not hold our noses too high.
Then war was threatened. Now the audience was asking questions. The man in the beige pleated suit, himself a war child, stood at the microphone and talked about fear. Not fear of tanks. He fears that billions that the German education system will soon lose. "Why do I have the impression that the rescue of foreign countries is always more important than the rescue of our own country?"
It was very quiet in the hall, and on stage the politician, former Finance Minister Peer Steinbrueck, was struggling to maintain his composure. "Germany is dependent on Europe," he finally says, sounding really embarrassed for the first time that night. "I hope I've made that clear."
But he had not. Germany's most popular politican can try to explain the billions of aid to Greece, that neither the opposition politicians nor the unpopular Chancellor Merkel are challenging. But the Germans are not convinced of the necessity of the euro rescue. Not the Social Democrat voters who complain about "these astronomical sums" and ask, where will this money come from? Not the European Union supporters elsewhere in the republic. The government in Berlin favors a rescue package for Greece, but in the countryside, the mood has turned. ...
The crisis is becoming a crucial test between the people and their representatives. The Germans simply will no longer put up with it. The head explodes thinking about the billions that were distributed in a big surprise to bankrupt banks. Then the amount increased again in a breath, as the Euro-summit hunted for the next [bailout], while television pictures showed Greece in a political state of emergency. The people are less and less civil in accepting this contradiction."

According to the article, Germans oppose further aid to Greece by 60% to 33%, even though 80% of Germans believe that "the financial difficulties of some EU countries [are] a threat to the stability of the euro."

The people versus their political representatives

The big gap in views between the people and their representatives mirrors the gap between World War II survivors and their children, as I've reported many times. (See my 2005 article. "France rejects EU Constitution.")

The WW II survivors, traumatized for life by the bloody violence of the war, formed the European Union with the specific objective of preventing a new war. However, younger people, with no personal experience of the war, are more concerned about their own incomes than in preventing a new war.

My guess is that if Greece's parliament votes down the austerity measures later this week, then the German people will be even more firmly opposed to a bailout of Greece.

In fact, European Commission President Jose Manuel Barroso and other senior EU officials have repeatedly said that "there is no Plan B for Greece," and that the austerity plan MUST pass.

However, as we've reported many times in the past few months, a European official apparently cannot open his mouth without blatantly lying, and this statement is no exception, according to sources speaking to Reuters. Unnamed euro zone officials are saying that there is a contingency plan to provide Greece with bailout money, even if the Greek parliament fails to vote in favor of the austerity measures.

And why should the Greek parliament vote for the austerity measures, if Greece is going to be bailed out anyway?

And it's fascinating that exactly the same kind of austerity debate, with the same kinds of arguments on both sides, is taking place in Washington, framed as a question of whether to raise the debt limit.

(Comments: For reader comments, questions and discussion, see the 28-Jun-11 News -- German support for bailout of Greece falls sharply thread of the Generational Dynamics forum. Comments may be posted anonymously.) (28-Jun-2011) Permanent Link
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Generational Dynamics Web Log for 28-Jun-2011 28-Jun-11 News -- German support for bailout of Greece falls sharply

German support for bailout of Greece falls sharply

The people versus their political representatives

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Generational Dynamics Web Log for 28-Jun-2011
28-Jun-11 News -- German support for bailout of Greece falls sharply