Germany Attacks The European Central Bank For Purchasing The Debt Of Poorer EU Countries, Thus Sparking More Divisions In The European Union Which Is Only Going To Help Lead To Another German Reich

By Theodore Shoebat

Recently the German Constitutional Court — the highest court in Germany — did a decision that shocked both financial markets and policymakers in Europe, and which has induced questions on the survival of the euro zone: it declared that the European Central Bank’s purchasing of government bonds (quantitate easing, or purchasing debt) did not respect “the principle of proportionality” and that the German central bank and government should have resisted the ECB’s actions. The situation shows a clash between Germany and the EU bank, indicating a further polarization of the European Bloc.

The ECB’s response was that it simply follows decisions taken by the European Court of Justice and not national courts (in this case, the German court), denoting how the Germans are really working to undermine the cohesiveness of the EU (an observation which has been making for years now).

According to Suddeutsche Zeitung, there are fears that the German court’s decision “will jeopardize the independence of the central bank and the primacy of the European Court of Justice”. The statement coming out of the German court has caused discussion about the survival of the euro zone.  “People will ask: ‘Will this increase the risk of a (euro zone) breakup?’” Marchel Alexandrovich, senior European economist at Jefferies, told CNBC Monday during a phone call.

A major German official, Wolfgang Schauble, who is president of the German parliament (Bundestag), observed that the reason for the euro’s existence was being questioned by numerous EU countries. As Schauble said:

“It may well be that the existence of the euro is now being questioned in other EU member states – because every national constitutional court can judge for itself”

Moreover, this is a matter of the independence of the European Central Bank from national banks — especially the German banks. There is talk of how what the Germans did could be a violation of Article 130 of EU law which forbids the European Central Bank from taking orders from member states: “neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body.” But the Germans are referencing the Maastricht Treaty, which states that there will be no commingling of debts. Thus, it could be argued, purchasing bonds means shouldering the debts of poorer countries like Italy. However, the head of the EU Commission, Ursula von der Leyen, affirmed that EU law holds precedence over national regulations.

But, the Germans are arguing that the European Central Bank is acting ultra vires or beyond its power by purchasing such a tremendous amount of debt. Thus, since the ECB is acting beyond its capacity, the Germans would have an argument to object to the ECB’s debt purchasing. Hence why the German court accused the ECB of breaching EU treaty law. The Germans can then object to both the ECB and the Court of Justice of the European Union (CJEU), as we read in a report from EuroIntelligence:

“The German court said it accepts that it is bound by CJEU rulings, but only those that occur within the EU’s agreed competences. All bets are off it the CJEU goes ultra vires. And, crucially, the German court decides if and when that happens.”

But lets look at some of the details of the ECB’s bond buying and see what effects Germany’s intervention could have geopolitically on Europe. The ECB was purchasing bonds from the governments of countries that are in debt enslavement to the German banks, particularly Italy. If the ECB is impeded from purchasing the debt of Italy, then it would make borrowing costs higher for the Italians. As Silvia Amaro has written, this type of restriction “would become particularly problematic for countries such as Italy, which has very high levels of government debt. Their borrowing costs would rise if the ECB was prevented from buying Italian bonds, as investors would assign a greater risk to the the possibility of the Italian government defaulting on its debt.”  Now there is something of a conflict between the European Central Bank and the German establishment. The president of the ECB, Christine Lagarde, has said that she will continue on with the 2.7 trillion-euro program of asset-purchasing in order to maintain the stability of the euro zone.

This indicates a boosting up of the 750 billion-euro pandemic purchase program which was established in March specifically to mitigate the economic devastation from the coronavirus crises. According to Carolynn Look: “The ECB could decide to increase that program, extend it into 2021, or promise to reinvest the proceeds of bonds as they mature. The only question is when.”  Isabel Schnabel, an Executive Board member of the ECB, affirmed that the program of buying debt will continue on in order to keep the euro zone afloat: “We are using this flexibility to make sure that our monetary policy is transmitted to all euro area countries … And we stand ready to adjust the size and duration of the programme if needed.”

But if Germany persists in trying to coerce the European Central Bank, then it would do three things: (1) It would demonstrate Germany working to consolidate her power over the EU establishment; (2) it would also further intensify anti-EU sentiment in deficit countries like Italy where hatred has definitely been flaring against the Euro Bloc. According to Luigi Scazzieri of the Center for European Reform, a “recent survey by the European Parliament revealed that only 49% of Italians—the lowest proportion in the EU – consider EU membership to have benefited Italy, while only 49% said they would vote to stay in the EU in a referendum.”  Euroscepticism has been growing intensely in these last years. In 2013, the anti-establishment party, Five Star Movement, presented itself as the party of Euroscepticism and won 25.5% of the vote in the general election.

The animosity towards the European Union has been growing and these feelings have continued to be exacerbated through different crises: the 2009 European economic crisis; the 2015 migrant crisis, and now the Corona-crisis of 2020. With each catastrophe comes a new stage in the phenomena of nationalist outpouring. If Euroscepticism intensifies to a serious rate, what could take place is the rise of populism to the point that anti-EU movements will become popular enough in poorer countries to where the Germans would use such a situation to justify mistrust of their neighbors and thereby to then justify militarism. We saw a taste of this very thing when Merkel declared that Europe could no longer trust America and Britain and thus it had to lead its own destiny. This type of rhetoric has been coming out of the German government in the midst of a major move by Germany to advance her military capacity. What this tension between Germany and the ECB could also lead to is a further fragmentation of the European Union. If the ECB does not shoulder the debt of deficit countries, this will convince the Eurosceptics of countries like Italy that the EU does not care about the people and does not deserve their allegiance.      

The third possible effect of Germany’s attack on the ECB is that the situation will empower other countries to also attack the European Union, causing more polarization. Countries such as Hungary and Poland (which are both under investigation by the EU), could use Germany’s example to justify undermining the Euro Bloc. Holger Schmieding, European economist at Berenberg, said in an email to CNBC: “The risk that this sets a precedent looms large. It may even be more relevant in political than in economic and financial terms — think Hungary and Poland, for example, whose leaders have their own disputes with European institutions”. As EuroIntelligence explains:

“The German court’s interpretation will have important consequences if other national courts follow suit, which we think is very likely. Poland’s deputy justice minister already declared that member states have regained their position as the masters of the EU treaties. We expect the ruling to strengthen the determination by the Polish government to press ahead with judicial reform, and to resist interference by the EU into what they consider domestic legal affairs.”

If an atmosphere of division intensifies, and its clouds grow darker, the Germans will capitalize on the situation to consolidate their power and make herself more independent of the bloc. In other words, the Germans will start speaking of themselves as Germany as opposed to Europe. With Germany acting more independently, the current system of the EU will be warped into a German leviathan, with Germany working more for German interests while pursuing power over her neighbors. While so many Conservatives are talking about a “one world government,” what we are currently seeing is a storm of division between nations growing. Nations will join the warpath, with allegiances being made and animosities being declared, with innocent blood being shed, and the merchants of war soaking in their avarice. “For nation will rise against nation, and kingdom against kingdom.” (Mark 13:8) 

The fragmentation of the euro zone is something that not all EU elites are averse to. In fact, Giscard d’Estaing, the one who brought Greece into the European Union in 1981, demanded that Greece be severed from the euro zone in 2015. “Greece must be put on hold from the euro,” said Giscard, because, as he argued, Greek voters “abandoned economic union, and therefore indirectly monetary union.” German finance minister Wolfgang Schäuble also wanted Greece to leave the euro zone in 2015, stating:

“We haven’t said we are going to force that on anyone, we couldn’t we don’t want to, no one has suggested that … but perhaps that would be the better way. And that’s something increasing numbers of people are saying in Greece.”

While the German high court is attacking the one institution that is uniting Europe through money — the European Central Bank —, let us remember that it was also a German court that protected one of the most divisive figures within Europe today, Carles Puigdemont, the leader of the Catalonian separatist movement. After leading an illegal referendum to get Catalonia independent from Madrid, Puigdemont fled to Brussels since he was, at that point, a fugitive who the Spanish wanted to lock up behind bars for a long time. On his way back from Denmark he stopped in Germany where he was arrested. The Spaniards wanted to bring him to justice, but a German court declared that Spain could not arrest him for sedition. Or as one report put it: a “higher regional court of Schleswig-Holstein has revoked the extradition warrant against Catalan president Carles Puigdemont, following Spain dropping its request. German prosecutors this morning received the official confirmation from Spanish judge Pablo Llarena that he had revoked the European Arrest Warrant against Puigdemont.” 

If the Germans really cared about keeping the integrity of the EU Bloc, why would they protect one of the biggest pushers for the divide of Europe? And why are they now attacking the financial institution that, through its money, is keeping the euro zone from dying?

What we are currently witnessing is the build up towards the rise of German power and the eventual implosion of war.


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