Jens Weidmann, President of Deutsche Bundesbank speaks on Rebalancing Europe, 2012. Wikicommons/Magnus Manske. Some rights reserved.In a recent paper, Guido Montani – professor of international political economy at the University of Pavia and former secretary general and president of the European Federalist Movement – takes a look at the recent clash between Greece and its creditors, and what this means for the future of European integration and of the monetary union (EMU) in particular.
Exportnationalismus
In the first part of the paper Montani analyses the current state of play in Europe. He does so without attempting to downplay the seriousness of the situation or to sugarcoat the facts. On the contrary, he states in no unclear terms that ‘the dramatic Eurosummit of 12-13 July 2015 marked a turning point in the history of European integration’: by threatening to expel Greece from the monetary union, ‘core Europe’ – essentially Germany and its economic satellites, led by German finance minister Wolfgang Schäuble – broke the original pact for the EMU. ‘Monetary union is no longer seen as irreversible, and neither is the EU’, Montani correctly assesses. ‘If Greece, and other overspenders, can be pushed out of the euro area, monetary union becomes similar to a system of fixed exchanged rates: the only difference is that it is more difficult and expensive to get out’.
Moreover, Montani seems to share Yanis Varoufakis’ view that Grexit was part of a wider strategy, aimed at radically restructuring the EMU into a smaller union of fiscally-tight, export-led core economies – Kerneuropa – by forcibly ejecting those countries deemed structurally unfit (such as Greece), in turn disciplining those governments that might be tempted to challenge the existing/new rules (such as in Italy or France).
