“The German consolidation of control at the EU level, that is coincident with an alignment of interest with the European defence sector, is under attack from President Trump”.
A successful conclusion of the 2017 election calendar will therefore determine the challenges to be overcome in 2019 and more importantly if there is a 2019 for the Eurozone. Currently the outlines of a 2019 grand survival strategy can be discerned, whereby Mario Draghi saves Italy as its prime minister and Jens Weidmann takes his job at the ECB. However, standing in the way of this strategy are President Trump and the few people from populist parties that support and are motivated by him to engineer regime change. The theme of Eurozone “crisis” suggested in the last report was recently illustrated perfectly by the awarding of the Cavour Prize to Mario Draghi. ECB executive members Peter Praet had a more practical suggestion to make as these “dark pasts” can be avoided. To sustain the generous social model the Eurozone requires the monetizing of budget deficits by the ECB and for wealth transfers from the German fiscal surplus. Draghi’s performance in testimony to the European Parliament unfortunately did not line up to the Cavour status. The big signal from Draghi’s response is that there is no legal precedent for the EU to prevent a nation from leaving the Eurozone. Draghi simply affirmed the penalty for any nation leaving the EU. Said nation would have to settle its debts to other nations. Draghi’s French colleagues then talked up the catastrophic consequences for France if it were to leave the Eurozone. The term “crisis” has become a contagious for both Northern and Southern Europe with the upcoming French presidential elections being framed as a catalyst for Eurozone disintegration. The America attack on the free trade deal with Europe should not however be seen viewed as simply an attack on free trade. Rather it should be viewed as an attack on a trade deal that America believes unfairly benefits German interests.