"A Great New Book" —Larry Kudlow, CNBCGet it on AmazonExplore the Book
WAR IS A MERE CONTINUATION OF POLICY BY OTHER MEANS.
Good old Clausewitz. Best book on war ever written. (The Art of War was about something else.)
But the 21st century has reversed his famous line. Politics has become war by other means.
Germany has a history of waging wars of conquest. World War I. World War II. The Greek bailout. As Stratfor’s George Friedman explains:
And with this, the Germans did something they never wanted to do: resurrect fairly unambiguously the idea that Germany is the sovereign and dominant nation-state in Europe, and that it has the power and the will to unilaterally impose its will on another nation. Certainly the niceties of votes by finance ministers and prime ministers were adhered to, but it was the Germans who conducted the real negotiations and who imposed their will on Greece.
In exchange for more debt, Germany ordered Greece to surrender its sovereignty and €50 billion in assets to be sold at auction. Greece must also “cut pensions, increase value added tax, clamp down on collective bargaining agreements and put in place quasi-automatic spending constraints.”
To be honest, those are all necessary reforms that will help Greece in the long run. Greece has operated on the edge of Marxism since the 1950s, and it finally ran out of other people’s money.
Still, Germany’s paternalism bothers me. And it makes a mockery of the idea that Eurozone members retain their sovereignty.
Had Greece exited the Eurozone, all those reforms, and more, would have happened anyway. They had to. Socialism doesn’t work, never has, and never will. Had Europe simply sent Greece adrift in the Aegean Sea of financial failure, the Greeks would have come to grips with their 60 years of fiscal irresponsibility. On their own.
It would have sucked, but it would have been a sucking of their own making. You know, like a sovereign country.
Instead, Greeks have someone else to blame: Germany. Because Germany fed Greece’s voracious appetite for debt for a decade and a half, and Germany can’t stomach taking a loss on bad loans. Will the Greeks learn their lesson? Or will they blame their woes, not on their own socialism, but on German hegemony?
Greece is no longer sovereign. It has been conquered. Not by an invading army, but by a European collection agency. Clausewitz defined war as:
WAR THEREFORE IS AN ACT OF VIOLENCE INTENDED TO COMPEL OUR OPPONENT TO FULFIL OUR WILL.
Take out the violence, and Clausewitz might have described Sunday’s Eurogroup meeting. Not only Greece, but France and other Eurogroup partners were compelled to to fulfill Germany’s will.
At best, Greece is an indentured servant-state. For decades, the fruits of Greek labor will feed northern Europe. What’s left over, the Greeks may keep. Like serfs on a Medieval manor.
The moral of the story for America: eschew socialism or you’ll end up a serf to a foreign lord. For the Eurozone, a question: is Germany the only sovereign among you?
I’ll end with more from George Friedman:
But in making these moves, Germany crossed two lines. The lesser line was that France and Germany were not linked on dealing with Greece, though they were not so far apart as to be even close to a breach. The second, and more serious, line was that the final negotiation was an exercise of unilateral German power. Several nations supported the German position from the beginning — particularly the Eastern European nations that, in addition to opposing Greece soaking up European money, do not trust Greece’s relationship with Russia. Germany had allies. But it also had major powers as opponents, and these were brushed aside.
Stay tuned. This isn’t over.