This weekend the European Union (EU)Leader's Summit will take place. News is emerging that Germany will push for a change to the Lisbon Treaty and create a permanent rescue fund for the euro zone rather than the European Financial Stability Facility (EFSF) which expires in 2013.
German success is not guaranteed-all 27 EU members have to approve it. It will the first step in the German plan to redesign the EU in a more rational fashion. Their goal is the creation of a structure which will allow member states whose currency is the euro may establish amongst themselves a stability mechanism to safeguard the stability of the euro area as a whole. The granting of financial assistance under said the mechanism will be made subject to strict conditions.
To succeed will require some compromise on the part of the Germans-they have already withdrawn their requirement that any states which fail to follow EU fiscal rules will be "automatically" subject to penalty fines and there will be others.
The real goal is evolve to a fiscal union which would also include synchronization of tax, labor law and budget policies-under German control.
It would appear that Germany's willingness to push the idea of a fiscal union despite the fact it would undoubtedly involve some level of fiscal transfers from Germany to the poorer states is predicated on the immediate creation of the permanent fund, which, like the EFSF would be an institution independent of the EU bureaucracy and actually therefore under German control.
I am not troubled by this. I have lived in Germany, and the UK. I have travelled extensively in Western Europe and more recently to former East Germany and Poland. "Germany works" is the best description I can think of.
Many people will see the spectre of Germany's past in this "power grab". I do not. Europe has evolved and will continue to so. It is a functioning democracy, which cannot necessarily be said for all of the EU's members, and certainly not Russia and many of the members of the CIS.
And, in comparison to the opinion of my courtly Baptist lawyer friend the honorable Spencer Bachus, you won't find any German politicians suggesting that the role of the Federal Government is to "serve the banks".
Strangely the German idea of a Social/Market Economy means they still think they are there to serve the people!
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