President Trump is critical of Germany for "trading unfairly" with the USA and using the EU to this end. This is surely correct. Germany runs up a huge surplus on trade by exporting more than it imports. It is able to do this because the euro, considered as a German currency, is greatly undervalued. Considered s a currency for the whole of Europe, the euro finds its level among other world currencies and this level reflects the weakness of the economies of Greece, Portugal and some other parts. If Germany were on its own the German euro would rise in value rapidly and German exports would become much more expensive. My volkswagon car would have cost more pounds than I could have afforded. Thus Germany and the citizens of Germany profit from the poverty of Greece. Netherlands also benefits in a similar way. This is why Trump favours the break up of the EU which would firce up the value of the German currency and allow America, as the larger economy to dominate Germany rather than vice versa as now. The real solution, however, is for the EU to function more as a single unit and less as separate states loaning money to each other.
The way that the EU functions at the moment, Greece is kept afloat by loans and loans carry interest and the interest on Greek loans is now so high that it is difficult to see how Greece can ever climb out of its poverty trap. Thus the Germans are onto a good thing until this racket breaks. This really is the number one problem for the EU, more important than immigration even. If the EU and the German government can solve this, the EU will be safe from collapse - if not not. But how do you persuade a democratic electorate in Germany to give up such a position? This is not at all easy. Democracy has the problem that, except in situations of dire national emergency, electorates are greedy.
How might the problem be solved? The Greek economy has to be brought up. This requires two things, basically. One is investment and the other is reform. The two are closely related. Not many people are going to invest in a country where some of their investment is going to disappear in corruption and some more is going to be eaten up in time wasting, frustrating and totally unnecessary red tape. It is not just a matter of "austerity". For the Greeks to cut services and increase taxes does make some difference but it is not the vital element. If you increase taxes but influential people can still get round having to pay them you merely impoverish the already disadvantaged and do nothing for the overall wellbeing of the country. This, therefore, tends to come down to a question of custom and governance. The same applies in lesser degree to all the south European countries. Italy, Spain and Portugal are not as extreme as Greece, but they all suffer from similar problems. Membership of the EU is forcing a degree of discipline upon them that constitutes a major break with their time honoured ways of doing things. Thus, it becomes a bit of a race against time. Will those countries reform fast enough to attract enough investment from the north before the system as a whole rattles to pieces? Do they even really appreciate what kind of reform is needed?
The fact that Trump is willing to be outspoken about how this affects the USA may cause a sufficient jolt to speed this process up. One of the great problems of politics is that politicians tend to be politic. In other words, they avoid talking about difficult subjects and avoid dealing with them until they absolutely have to. Trump is not really a politician, he is a blunt business man who has wound up in a political job. His bluntness, whatever consequences it has for him personally, can, at times, be like the little child pointing out the emperor's lack of clothes. He makes us think about uncomfortable issues. Nonetheless we should not underestimate the difficulty. The fastest ways forward all involve incursions upon the sovereignty of Greece: EU control of Greek banks, for instance, or EU controls on the Greek budget or civil service, or semi-colonial control of economic development zones within Greece (as the Chinese are doing in Africa), and so on. These all involve control passing from Athens to Brussels. The problem is not helped by the fact that Greece is geographically cut off from the rest of the EU by the states of the former Yugoslavia and all those mountains.
As things stand the position of Greece is rather hopeless. They have to borrow more in order to service the already existing debts. They desperately need an inflow of money but do not have the means to get it. The EU could simply write off much of Greece's debt, but the fear in north Europe is that if that were done it would encourage the old ways to continue and Greece would become like a hole in the bucket as far as the EU as a whole was concerned, sucking in more and more money that disappeared without visible result. So the Germans especially strictly demand reform. However, given the way the system works it is difficult for the Greeks to believe that such demands are not really motivated by the desire of Germans to line their own pockets at Greek expense. Thus a hostility is fuelled on both sides. Some middle path has to be found. That path probably involves major infrastructure investment in Greece by other European countries, especially Germany and Netherlands, but the whole thing is a circle. Greece has to become the sort of place that people want to invest in. And so we go round. Progress is being made, but is it fast enough? With an infinite amount of time the problem should eventually solve itself, but people tend to change their ways rather slowly and time is limited.
The spiritual lesson of all this is that it is the spirit of things that matters. If there were less corruption, less greed, more goodwill, more generosity, less tendency to take unfair advantage on both sides, the problems would soon evaporate but getting humans to relinquish greed, resentment and national pride is only slightly easier than getting the leopard to change his spots.
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Thanks, Robert - much truth in your comments.
Likely the essence of current global problems goes back to the 70s when greed promotion by corporations and governments went on steroids; the capitalist economies needed very greedy populations to thrive and we bore the onslaught through advertising, education, the workplace. We were all so manipulated by such clever conditioning. Gross greed was not just desirable, it became compulsory if you wished to be a good corporate citizen. Quite some irony that the whole EU hangs on a thread of overcoming that 'nasty' German greed. There are many downsides to a revitalised EU. Many new weapons will be developed. A huge new competitor with a past history of fully ignoring ecological catastrophe will again be pushing those greed buttons for its citizens to so enjoy the 'good' life. A major impediment to the EU revitalising is the seemingly intractable problem of the different culture, economics and politics of Mediterranean states versus central and northern states. France is the most fragile here of course with its populations split along those lines.