Now that the cheering over the French election has died down, reality will strike France and Germany like a cold bucket of water thrown in one’s face on a Winter’s day.
Germany was guaranteed to not like the result no matter who won. The final choice was between an anti-EU Marine Le Pen and a budget-comingling Emanuel Macron who needs EU treaty changes to get what he wants.
And in France, buyer’s remorse has set in. Unions are already protesting against Emmanuel Macron’s policies.
Zumutungen!
The word of the day is Zumutungen. Google translates that from German as “impositions” but the actual meaning is quite a bit stronger according to Eurointelligence.
The German political establishment clearly favored Emmanuel Macron over Marine Le Pen during the election campaign, but they are nervous about Macron’s eurozone agenda. As FAZ notes this morning, the relief over his victory still weighs heavier than the reality – which is that Macron and Angela Merkel have diametrically opposed views on the future of the eurozone. Merkel yesterday confirmed her readiness to engage in a dialogue with Macron, but said that eurozone bonds are a no-go. And without Eurobonds – or other forms of a eurozone-level fiscal backstop – none of the Macron agenda would work.
The FAZ article uses a word for which there is no straight translation – “Zumutungen” – which means an excessive and immoral demand that one can conceivably not fulfil. The paper makes the point that François Hollande also favoured the same kinds of reforms, but let go when he realized that there was no support from Berlin. The article notes that Macron’s ideas go way beyond those of Hollande. His eurozone agenda is not about crisis resolution, but economic shock absorption in general, as evidenced by his ideas for a pan-European unemployment insurance. FAZ is appalled by all of this, as well as by Macron’s idea of a Buy-European act. The paper noted that the eurozone finance ministers, at their meeting in Malta, criticised similar ideas by the European Commission.
On day one after Macron’s election, there is a first taste of resistance in the form of street protests against his labor law reforms. Labor reforms have been a particularly traumatic experience for the outgoing government. The radical trade unionists are taking to the streets, while the more cautious headquarters warn against implementing the whole agenda.
Volcanic Forces on Germany
Telegraph writer Ambrose-Evans-Pritchard accurately states Volcanic Macron Forces Germany to Come Clean on its Real EU Agenda.
Emmanuel Macron’s lightning conquest of France has put Germany in an awkward spot. French voters have picked an apostle of Europe and an arch-defender of the Franco-German axis. While this is welcomed with jubilation by some in Berlin, it raises thorny questions that others would prefer left unanswered.
He plans Nordic labor reforms, easier collective bargaining rules, and the sort of tax shake-up that German leaders have long demanded. The quid pro quo is that Berlin must agree to eurozone fiscal union, and cut its corrosive current account surplus – now 8.6 percent of GDP and in breach of EU rules.
“If France is not reformed, we will not be able to regain the confidence of the Germans,” Mr. Macron told Ouest-France. “After that, Germany must ask whether its own situation is tenable. It is accumulating surpluses which are neither good for its own economy nor for the eurozone.”
He wants a eurozone finance minister and budget, with joint debt, and a banking union with shared deposit insurance, all legitimized by a new parliament for the currency bloc. It implies a unitary eurozone superstate.
This calls Berlin’s bluff. The German elites often argue that they cannot accept such radical proposals as long as other eurozone states scoff at budget rules and fail to put their house in order.
The Handelsblatt accused Mr. Macron of “Teuton-bashing” over the trade surplus. The German Council of Economic Experts holds defiantly to the national view that trade surpluses are proof of virtue. It sees EMU debt-pooling as a slippery slope towards a “Transferunion”.
Mr. Macron’s plans would require a new EU Treaty, opening a can of worms that several states are determined to avoid. Berlin has no intention of sharing Italy’s debts, whatever France does.
Germany’s top court says EMU fiscal union and debt-pooling would require a change to country’s constitution. “Politically, that is absolutely impossible,” said Heiner Flassbeck, former economy minister and now at Hamburg University.
France is split on deep lines cleavage, Balkanized five ways. The scale of Mr. Macron’s 66:34 victory on Sunday is misleading. Blank protest votes – “Neither Plague nor Cholera” – jumped threefold to 11.5pc. The abstention rate jumped six points to 25.4pc.
The Front National’s Marine Le Pen botched the final weeks of her campaign with confused messages over pensions and the French franc, but she still won 34 percent of the vote. Five years ago this would have been deemed impossible. We now shrug off earthquakes a little too lightly.
German Elections
Angela Merkel has recently surged in the polls vs. SPD candidate Martin Schulz.
Is there a fundamental reason for the shift?
Yes, Schulz is far more open to Macron’s views than is Angela Merkel. Despite the fact a majority of German citizens do not want Merkel, voters may be stuck with her as a counterbalance to more radical ideas that SPD may be willing to try.
Germany a Loser
I discussed much of this setup long ago, before the French primaries, on January 15, in Germany a Loser No Matter Who Wins?
Germany a Loser No Matter Who Wins?
- Le Pen: Eurosceptic – Seeks better relations with Russia
- Macron: Pro Europe but seeks a common eurozone budget for investment and financial assistance in case of shocks.
- Mélenchon: A socialist who will not be in favor of reforms France desperately needs
- Valls: After the 2016 Nice attack, he was booed for saying that “France will have to live with terrorism.”
- Fillon: Fillon aims to reduce the public sector and cut 500,000 civil-service jobs. He wants the state healthcare program (securité sociale) to work better with fewer payments. Fillon is in favor of increasing the retirement age to 65. He seeks better relations with Russia.
Of the five, Germany could work best with Fillon. But his pro-Russia stance poses at least a minor problem.
O Come, O Come Emmanuel
I ask again, Is Macron the Anti-Trump, European Obama Savior?
Mike “Mish” Shedlock
“If France is not reformed we will be not be able to regain the confidence of the Germans.” President Macron, your statement sounds a little to Vichy-esque to this American…
That was 80 years ago. If that’s your frame of reference for European politics, you’re going to end up pretty confused.
The acronym is KISS…Keep it simple stu…
France is one of the biggest debtor nations in the EU. France wants … needs … to be subsidised to keep its social welfare boat afloat
Germany has capital and net savings. Germany desperately wants the EU to work out, and its best chance for that is for the French to sign on to keeping the EU ‘Dream’ alive.
(Cue the theme to The Odd Couple)
Or to paraphrase Margaret Thatcher, the problem with France is that it will eventually run out of Germany’s money.
Spot on.
Someone should tell President Macaroon to reform himself first.
Got to repeat Mish: “…reality will strike France and Germany like a cold bucket of water thrown in one’s face on a Winter’s day…”
Buy European Act? Is that anything like Buy American Act? Europe is a team of horses all pulling in different directions and going nowhere.
Buy European act is because EU-directives force level playing field among all EU countries.
If countries would be sensible each would have local “buy local acts” and consider the employment (less need for welfare) and tax revenues (tax from companies and workers) when making purchasing decisions as governments and buy mostly local.
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Buy european act is the next best thing and the only option because of EU-directives demanding EU wide level playing field.
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The current braindead EU-model EU forces on european governments is to purchase the absolute cheapest in everything no matter that buying cheap chinese crap leads to no tax revenue from workers or companies in europe and increased welfare and un-employment benefits in europe because the jobs are in China and on top of this usually the quality in Chinese made stuff is inferior.
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EU incompetence from Juncker and all the commissioners is largely to blame for the unemployment in europe and the growth mirage in China.
This is another level of protectionism and unltimately will lead to “issues”.
German export machine will grind to a halt if people outside of Europe take the same attitude.
The EU business increase through buy EU probably won’t compensate for the loss of German high value product sales – cars etc.
Macron seems to be a little bit of a protectionist in that Macron wants to make “buy european act” that would limit public procurement aka government purchases to companies who have at least half of their production and operations in Europe.
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Predictably one of the most idiotic politicians in european history former finnish prime minister Jyrki Katainen has slammed Macrons idea and Katainen wants no limits at all meaning governments would be forced to buy the cheapest offers (like EU-directives demand) no matter from where with no thought to the fact that despite some offer being a little bit cheaper the european offer that would be a little bit more expensive would be more beneficial to society and societies as a whole because it would provide jobs in europe and therefore lessen the welfare payments governments have to make to un-employed europeans and also give profits and wages in europe which when taxed give tax revenue to fund the european countries.
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Katainen is Jean-Claude “lie when it is serious” Juncker’s lap dog who ran finnish government as finnish prime minister according to what Juncker wanted because he wanted to continue his career as Juncker’s sidekick in EU-commission because it became clear he would lose badly in the next elections if he stayed in finnish politics after telling finns that loaning lots of money to Greece would be a good investment for Finland and that Finland which has 500,000 un-employed finns from a population of 5 million should quickly import 1,8 million immigrants to make for an optimal hiring environment for companies and to increase the amount of working age people with no thought put to things like whether these working age people would actually find jobs or just be drain on the finnish welfare society.
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All politicians should be prevented from working for the EU-commission or any EU-institution for 5 years after ending their political career to prevent the behavior that Jyrki Katainen showed in which he did not care about finnish interests as prime minister of Finland but he cared about pleasing Juncker and securing a job in the EU-commission by being Junckers lap dog while still finnish prime minister.
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Greasy opportunists like Katainen should be prevented from making policy as prime ministers and ministers to benefit EU instead of their home countries by making an europe wide “Katainen’s law” which would prevent employment in EU-commission and all EU-institutions for 5 years after end of their political careers because the behavior Katainen showed is opportunism and a form of political corruption.
Article about Katainen slamming Macron:
http://www.express.co.uk/news/world/801971/Macron-slammed-EU-chief-European-Commission-vice-president-Buy-European-Act
This is what Europe gets with a claque of unelected and unaccountable bureaucrats bumbling around Brussels…
You are dead right about Macron aping Obama but that is hardly a merit. The Germans must feel like Putin when he first met Obama spilling his noble ideas. on world harmony – this guy cannot be real.
It is opined by those who know the mood that the anti-Macron forces in the French workforce will muster a revolution in the streets if he tries to reform labour laws and practices.
Buy European is probably to punish UK.
Merkel will about face after her election and go full force to higher level union, fiscal etc.
If any side doesn’t carry its people to union, but forces union, they will suffer the consequences.
Terrorist appeasing Manuel Valls has just joined Macrons En Marche party.
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Great job France.
With Macron you got Hollande part 2 with even the same prime minister most likely in Valls that Hollande had.
FAKE NEWS
Melenchon is not socialist but he is a communist
He is a big fan of Chavez not to say Fidel Castro
Fillon is not pro Russia but he defends our farmers most french farmers agriculture sector export goods to Russia eg pork / meat we neeed to feed Russian peolpe in order to guarantee our farmers income However he is considered by the socialists as the the French Thatcher
for his big reforms
Marine Le Pen will be crushed the general elections will take place in one month and it s too late for her to change her bad image from her failed debate against Macron she appeared as
nulle in economics and monetary issues hence inable incapable de gouverner / to govern
What is next for France Macron party en marche will gain most of the seats in parliament followed by the conservatives party named Les Republicains who got rid of Fillon
to adopt a strategy leaning to the center ie less tax cuts for the wealthy
Front National will be crushed as they have no ally
The socialist and Melenchon communists are divided thanks god
The unions refuse as usual any reforms so it wil end in riots in Paris as usual but not
before november as people are fed up with political campaigns and with sunny days
they are likeky to go to the beach on French riviera and concerned by chatting up women
Merkel has been tightening policies all the time regarding immigration and asylum seekers.
Latest idea is to send criminal juvenile immigrants and criminal juvenile asylum seekers from Germany to childrens homes Germany will build in Morocco where they will live until they turn 18 and then go to their home countries.
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Merkel also did not wear a veil in Saudi Arabia and has made several other gestures that play well for german people despite being largely symbolic with no actual substance.
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Deportations of Afghans back to Afghanistan that Merkel forced through with EU-wide return agreement with Afganistan are running and Merkel has stopped insulting Austria and Slovenia that closed the Balkan route from Greece to welfare paying europe by closing their borders in March 2016.
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Schulz on the other hand is an open borders nutcase and is revealing this bit by bit and in fact Schulz is crazier than Angela Merkel was during the refugees welcome hysteria of 2015.
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AfD’s Frauke Petry is destroying their election chances by demanding AfD should become Merkel’s lap dog in advance before elections and is blaming AfD’s drop in polls to them being too extreme when in fact the drop is caused by infighting and desire of Frauke Petry to be Merkel’s lap dog and earlier huge miss step by Petry in which she cluelessly jumped right into a false choice trap set by a reporter in saying that people should be even shot at the border if they do not stop coming otherwise.
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AfD would in 20%-25% right now if she would have said “there is no need to shoot anybody, we will stop them at the border and tell them to seek asylum in the safe country they already are namely Austria and if they cross border by force we will return them to Austria either immediately or next day and this will make it clear to Austria that they should also close their borders and tell people to seek asylum in Slovenia instead of coming to Austria and this will create a chain reaction that will close the route thru Greece to welfare paying europe and since nobody comes to Greece because they want to stay in Greece closing the way from Greece to welfare paying europe will stop the rush to Greece also helping Greece”
Current immigration trajectory and replacement birth rates lead to only one conclusion, Europe is rocketing towards a complete political fracture between pro-Sharia and anti-Sharia member states. This is something that could be worked out with mathematical certainty.
That’s stupid.
Phil – It is a mathematical certainty if the current immigration trajectory remains. It is the reason why the EU is trying to force all member countries to take immigration quotas.
A replacement rate of 2.1 is required to maintain a population. A value of 1.8 is a significant danger and below 1.3 populations will not recover it is on its way out. There is a large body of scientific literature backing these numbers.
1. The following is a highlight but there are endless reports and studies.
From the Guardian
https://www.theguardian.com/world/2015/aug/23/baby-crisis-europe-brink-depopulation-disaster
“When Spanish business consultant Alejandro Macarrón started crunching the numbers behind Spain’s changing demographics, he couldn’t believe what he was seeing. “I was astonished,” said Macarrón. “We have provinces in Spain where for every baby born, more than two people die. And the ratio is moving closer to one to three.”
Spain has one of the lowest fertility rates in the EU, with an average of 1.27 children born for every woman of childbearing age, compared to the EU average of 1.55. Its crippling economic crisis has seen a net exodus of people from the country, as hundreds of thousands of Spaniards and migrants leave in the hope of finding jobs abroad. The result is that, since 2012, Spain’s population has been shrinking.”
The below chart is from the Economist and Eurostat, Look at the statistics since 2007. Could the rapid decline be due to the financial crisis? I believe so, but that is another discussion. How Europe will ever be repay bonds in the face of these demographics is a mystery.
http://cdn.static-economist.com/sites/default/files/imagecache/original-size/images/print-edition/20160430_IRC052.png
2. Now the question becomes, when the population of a country begins a terminal decline, what can you do? The EU’s solution is to promote mass immigration from neighbouring states – predominantly from Muslim nations – led by Germany. By the millions.
This is going to change the political system as Europeans know it. The immigrants that are arriving follow Sharia. Will they assimilate? In small numbers yes, in such large numbers, by the millions, no. The underlying causes of population decline, that I believe are economic, not a choice (I agree with the Guardian article above), are not being resolved or even addressed.
What then, are the new migrants going to do? Simply bringing more people to a nation does not mean it will grow or that there will be work for them. Especially when there are language and educational difficulties.
Each of these immigrants will soon carry as much political power as each current European – that is – one vote. This is going to have enormous political consequences in Europe.
Epistrophy, nationalism, and even ‘ moderate right’ , is losing popularity though….
http://ripostelaique.com/le-vote-musulman-rend-impossible-la-victoire-dun-candidat-patriote-la-preuve.html
Crysangle thank you for this. Confirms my fears that 2022 will be too late.
Welcome. Simple fact is that socialism breeds socialism, migrants and racial minorities will generally vote left. That does not apply solely to muslims, but the other fact is that most extra-EU migrants are muslim. We can call that a coincidence of history or extrapolate intent, but neither changes how the balance of power is evolving.
Anyone in Europe should be nervous, following the french Elections; but, some Frenchmen, unions or otherwise, are always protesting about something; and Emmanuel Macron is, perhaps, the first to rationally ask for change in the E. U. But, it should be across the trade pact, not country by country. That would lead to further splintering, just like an outright FRexit would have.
The E. U., which was an outgrowth of the old post-WII Common Market, needs to be re-formed. It has served a purpose–economic growth and inclusiveness, with the added benefit of peace since 1945. But, as the E. U. has frown, so too has its bureaucracy, which has also usurped more and more power, from the member states, along the way.
Many of the complaints that the individual countries have are, no doubt, more so with the more parochial, or regional issues, and not with the basic premise regarding Tariffs and Open Borders. Granted, there will always be some resentment, when economies stagnate, but they reverse themselves when the recovery comes about.
The E. U. will never be a “perfect union”, which certainly is true, but the European Commission out to ditch the country club mentality, perhaps narrow the actual governing body (on a rotating basis), and het on with actually governing! There is a problem with the E. U.; however, bipartisan leadership and on-going management could possibly save it from itself.
Buy European? Why not do what the Swiss do? Buy AAPL?
http://traderzoogold.blogspot.com/2017/05/modern-portfolio-theory-swiss-version.html
Banker boy Macron. Ex-employer and backer Rothschild Banque having wet dreams about Eurobonds – unlimited opportunity to print money – literally.
The French Parliament will not be so accommodating. I have a suspicion that Macron will wish he had never been elected.
French parliament will love it. Its Schauble that might have a fit.
I even think Merkel would be for it if it wasn’t for Schauble.
As soon as he’s out of the way watch what happens.
France can’t lose as it finally 100% hooks its wagon to the German horse.
German tax payers are likley to get hit. Talk of pooled VAT.
If the Germans go along they are likely to demand spend control be hard enforced and then stress starts if it looks like limits are placed by an external “clique”. I think it is likely to happen with targetted industrial development spend to reduce unemployment in Southern Europe & France.
Even something like a European funded Marshall Plan for Europe by Europe. Mainly funded by a common VAT and Germany in exchange for full tax and spend control as a pooled resource.
That is the last brick in the wall as countries disappear into the Federated Europe.
The momentum behind Federation will roll right over anyone getting in the way now.
LePen was the last possible roadblock between France and Germany and eally only France and Germany matter.
Quite scary as it is a take-over of soverign states by stealth and replacing them with less representative institutions without full transparency and oversight – ripe to be abused and hijacked. Very cliquey.
Not just in Brussels or Frankfurt, as you mentioned previously countries forget how to govern themselves, plus corruption and financial attrition of traditional parties. What I have noticed is new networks of influence running right down to local bureaucracy being created or forged. I have had attitudes from local bureaucrats tried on me, in countries I know well, that would never have been attempted before, and (very) clearly part of an international chain of command. I would say frightening but I am generally cold minded to this sort… but they would make a decent person want to puke out of simple disgust. Not just me, different people notice this in various European countries, a very bad mixture of local extremes and progressive agenda going on in some places… polls I have seen put traditionalist sentiment as a reaction into the realm of previous strongmen as most appreciated past leaders/most necessary now, and as majority of popular choice. I think they are pushing this to conflict, sat half a continent away they are too disconnected and arrogant to back down.
You may well be describing ‘Common Purpose.’
You will find some coverage in UKcolumn.org
Good link Gravesey, much thanks. It describes what I am talking about in some articles, which adds a layer to the how this has been introduced to the country I have experience of. It is something I must study more as I have witnessed first hand the evolution from a completely independent country to one that joins EU and ‘modernises’, I have watched the various social themes put in place, the regional funding change, the destruction of the old financial hierarchy, right down to manner local services have. It is capital bad. I still need to pin where exactly this is all centred, beyond the official meetings and agenda setting. What I have come across so far is distinctly French-EU.
A huge factor that should be part of the discussion, the burning ambition of the Euro Trash to finally create a full blown European Army, make it march for European Union, read determination and finaly create the occasions to play their absolutely horible European Anthem.
The French alway’s have blocked the EU Military Army, unwilling to give up their “Force the Frappe” which name refers to France’s nuclear capability.
Macron, a hard core Globalist has absolutely no problem what so ever to exploit this Cold War relique of French Nationalism that not so long ago defined the French and “La Grande Republique”, a proud country and a proud people.
European integration is all about the demise of National States and everything that defines a people. Macron certainly will use the Force de Frappe card as a huge bargoning asset and I think the EU Apparatchiks are so incredibly power hungry that they will will give their soul to Macron as well as their last euro to make this happen.
God forbid that the Euro Apparatchiks achieve control over over a nuclear arsenal, how small and antiquated it might be. Wha’s a European Super Power without nukes n’est pas?
I tell you, Europe is quicly becoming a very dangerous place and with that I not only thing about the French people or the Germans.
The USA always has supported the the EU as part of the Global Agenda.
The USA will not be happy if the EU will have it’s own nuclear deterance and the EU Army build up will come at the cost of NATO.
Many share these concerns.
Someone like Junker not just able to shoot his mouth off. Dangerous indeed.
Epistrophy, he looks so full of himself I doubt he will never regret anything.
A bit of a Blair type.
Yes he is a Blair type but without a party apparatus behind him (although he does have the establishment).
The ultimate “someone else will pay for it” belief. Hitch their star to Germany? As if the German companies and trade unions will pay for it. Okay, so the idea is to force an economic union for the greater good of the political union. Except does he really believe that once Germany forms an economic union they would let France have much say in the political union? He whose economy drives Europe calls the tune, in this case it will be Merkel, a woman who will rule over France. It won’t take five years for Macron’s government to fall.
The Paymaster rules or doesnt remain Paymaster for longer than absolutely necessary.
Most people would rather work for the paymaster rather than themselves because they want the “sure thing”. The paymaster will rule long after the money’s gone because of the common individual’s faith in him and because that same individual may have nowhere else of go to find another paymaster. Don’t confuse inertia with necessity.
Let’s remember which country runs the EU, and it isn’t France.
Due to the mass migration of Muslims who dont wish to assimilate and their piss poor finances, the French are done. Darwinism and mathematics are not your friends.
Wishful thinking from the fact-free hate-filled US right wing.
The Germans and the French have always hated one another.
Just a matter of time before Merkel lobs a few scuds over the border. It’s going to take a war to pull them out of the upcoming depression. One war is just as good as the other. It doesn’t really matter who’s fighting whom. As long as money is spent and weapons inventories need constant replenishment. It’s getting a little noisy on the Western Front.
Waste of pixels. The comments here are unbearably stupid.
You made me cry.
You German or French?
Why bother reading them then. Who is more stupid?
Zumutung is the demand and expectation of something from someone who considers the demand offensive. This is how I understand the term.
“O Come, O Come Emmanuel”
Okay, I’ll play along :
~ ” …and ransom captive Israel”
perfect
Mish you have attracted a cesspool of idiot commentards only superseded by the blatant racists over at zero hedge. Congratulations are in order, or something.
Mish you have attracted a cesspool of idiot commentards only superseded by the blatant racists over at zero hedge. Congratulations are in order, or something.
Thanks
(I think)
LOL.
“Mish you have attracted a cesspool of idiot commentards”
Phil, you are leading the pack.
“The paper makes the point that François Hollande also favoured the same kinds of reforms, but let go when he realized that there was no support from Berlin.”
In all likelihood so will Macron. Looks like it all comes down to Merkel.
It is clear to everyone that the EU is a Master (Germany) and Slaves (all other EU countries) Show. The slaves have the right to a few crumbs if the master is happy as the Greeks repeatedly find out. Over the years through sheer practice of pleasing their German Masters the Greeks have become “Master Slaves”. That the people of various countries are happy at having a German master just goes to show how much they trust politicians of their own country.
Hollande was a socialist President. What does that tell you about what he wanted and why?
Socialise, on a European scale, bad economic decisions made by member countries. It also has the result of giving over hard decisions to someone else that can then be blamed. Give a socialist responsibility for his decisions and he usually tries to hide behind someone else.
Macron has known nothing but the EU since he was born. How can he possibly imagine anything else? That is what happens as generations change. They forget what went before them and how it felt to be free and independent.
A generation of French politicians will be in the wings knowing nothing but leaving another entity to really govern.
There are always nintended consequences in every decision.
“eurozone fiscal union” = fish or cut German nuts off.
It’s looking like Macron was a shoe in.
Merkel has a problem. She might rule the EU now, thinking she has acquired the Germans the European Empire they always craved. Thing is with the UK leaving she might have made German taxpayers hostage to Eastern and Southern Europeans.