Why the Germans won’t save Europe... but might redraw their borders.

Why can’t the Germans just fix everything? was the cry last week – from Paris to London to Washington. If only the ECB was more liberal with its monetary policy, if only we had Eurobonds – then we’d be able to put this whole sorry business to bed.

After all, the Germans have had more experience than most with transfer unions, having taken in communist East Germany. Even now, billions of euros are being transferred eastwards every year. The practice is controversial – money is being transferred on a purely geographical basis, with poor western regions sending money east, despite suffering high unemployment and decades of underinvestment.

So, if the Germans were willing to pay eye-watering sums thorough this scheme for reunification, why not a diet version for their other pet project, Europe? I asked this question to David McAllister, CDU Prime Minister of Lower Saxony* as he visited Edinburgh a couple of days ago.

His answer was surprisingly straightforward: There is simply no support for that from the German electorate.

The exact same reason that the UK isn’t clamouring to send money.

Europe is certainly dear to Germany’s heart – but he said that the EU is a system of ‘give and take’. Add to that a country embittered by the behaviour of the Greeks – McAllister cited the example of Germany’s retirement age still being higher than Greece – and you don’t have the recipe for an unconditional transfer of funds.

He also noted that various Eastern European Baltic states had gone through much hardship reforming their economies after the collapse of the Soviet Union without much support. While he didn’t confront the issue directly, the implied question was: Why should the Greeks be bailed out for their own mistakes, when the Baltic states barely got any help for a disaster that wasn’t their fault?

He then spoke about the current arrangements within Germany, the ‘Solidarity Pact II’ that will expire in 2019. He suggested that while Germany is a proud federal nation, the number of states is by no means fixed. A new financial settlement post 2019 may mean that borders will be re-drawn...

He didn’t want Bremen (a highly indebted city state enclave within Lower Saxony), though: “We can’t afford them”.

* And with that, I present the second in my multi-part series: Photos of me posing with mid-level regional German politicians. McAllister is hardly mid-level, but there’s an election coming in January. We’ll see what happens...

That’s me and David McAllister (CDU), Prime Minister of Lower Saxony.