Germany is demanding of weaker economies to become more like Germany and the response from the south is “if you give us more money”. The old refrain. If that is the basic nature of this proposal, then we again fail to assess the exact depth and extent of the “heterogeneity” in the Eurozone. That political measures from the German mindset can create the sort of convergence sought for is an illusion.
First, even economies that are close to Germany in culture such as the Dutch do not share in German success. This does have to do with differences in policy and history but the degree to which cultural, nationalist and linguistic values feature here are undeveloped in our analysis. It also has to do with scale, proximity and ease of acquisition. A small or middle sized German manufacturer has many benefits when seeking to contract with a large German company compared to foreign competitors. This creates a nationalized manufacturing complex in which foreign companies cannot compete if the demands require high levels of integration in the chain. I believe this dynamic is important and needs to be understood more clearly in the context of the EU and Eurozone.
Second, how likely is it that Greeks, Italians or French will be able to compete on such a playing field? One can import Korean or German manufacturing into Italian and French factories but the end result aren’t Korean or German factories, the basic identity and modus operandi remains Italian or French.
Do we want a Europe where individuals when employed are divorced from their identity in order to produce according to abstractions far removed from their being? That’s not the EU we’re looking to maintain. Further integration along such lines will power political parties like the Wilders and Le Pen led ones, parties that can derail the project.
The Germans lack a proper eurosceptic opposition and with it fail to properly assess the nature of political euroscepticism and europhobia and the degree to which the quest for convergence is now powering it. It seems entirely reasonable and logical from a German economic perspective to move towards faster Eurozone integration but I believe that just isn’t the lay of the land.