Enten in einer Reihe

The German Chancellor is--and I know that I keep writing this--the most intelligent of Europe's leaders. She's formidable, in the Hoods-respect-her type of way that some able women can be.

Just recently, and not that much noticed by the English-speaking press, Angie (late of this blog) has been demonstrating what real maneouvres look like to a largely stupid foreign press.

Here's the dilemma; Germany, because it is successful, peaceful, and not inclined to waste a tonne of money on nonsense via usurious credit, has built up a massive surplus on its balance of payments, which is impressive every month given the circumstances. The Balance of Payments is the measure of all money in and out of the economy.

Normally, a state that had accumulated such a large amount would face a rising currency, which would, in the natural course of things, choke off the surplus and run it down, provided that it traded with people whose currency floated.

Germany, however, is in the euro, and its client states in eastern Europe are not. So Germany can take advantage of a euro that is relatively high against eastern currencies, and its own productivity lead, to buy resources from the east. It can then sell them in euros that are relatively low compared to dollars and pounds, and not strengthening that much thanks to the recent crisis to the west. It can sell surplus products at a rate locked in when it was relatively weak and just recovering from unity to the south. It does not face being taxed to support the south, and is constitutionally barred from letting southern states take its money surpluses

Germany has also used the recession to re-tool industry, and to share out jobs in an innovative and consensual part-time-work share scheme.

There are clouds, however. Some of Germany's otherwise stable banks got involved with coke-driven Anglo-Saxon banksterism a few years back, and are restricting credit to the German small businesses known as the Mittelstand. Germany's trading partners are getting restless, and its lawyers, businessmen, and voters are not happy with the abuse they are getting from the Greeks and others, who nevertheless want Germany to bail them out.

Some Germans are even beginning to think of a 'kleindeutschland' solution for a 'neuro', or northern euro bloc that would get rid of the troublesome south in much the way that Konnigratz left an earlier Germany free to lead its own states north of Austria.

Angie, however, seems to be playing a fairly sophisticated game, as usual. She's raised the spectre of an IMF bailout for Greece, which frightens the Greek government and reminds France that the United States is the majority shareholder in the International Monetary Fund. That's possibly a poison pill for the IMF in Europe. She's also floated an idea for a European Monetary Fund, or rather, she has floated her finance minister's idea.

That means that, if it works, Germany gets to own a set of arms-length legbreakers to keep the wastrels in line, and if it doesn't she gets to say 'I tried'. She's also let debate simmer on whether Greece may eventually be asked to leave the euro club, without joining in herself.

So; if the crisis returns, Germany is poised and prepared to go with its own bloc. If it calms down, Germany might get an EMF to play with without further constitutional change in the European Institutions. If China exports commodity inflation, Germany still has its export surplus; and if any big credit squeeze really takes hold, Angie can distribute cash. Should an eastern european state look like it is going to collapse, Germany can now turn the EMF idea around and use it as a sort of corral for her suppliers, and a future workforce, and they'll be grateful for it. Meantime, the Poles, Czechs, Austrians, Hungarians, French, Croats, Belgians and Dutch slip ever more snugly into Germany's slipstream.

She's also set the federal intelligence people on traders betting against Germany and threatened the hedge funds in that sweet, elephant killer way of hers.

It's not all her. But Germany is being managed even better than Korea, with France more or less running the interference and the Italians and Spanish having the sense to keep schtum. Nobody's noticed, either, that Germany's debt and borrowing figures are worse than Britain's, and in financial politics, perception is all.

What can you say? Some States are run by masters and mistresses of the dark arts, like Russia and Germany. In fact, the one man who has ever wound Merkel up and survived, as far as I can tell, is currently running Russia from some broom cupboard in the Kremlin. Remember when Putin--'Tenement Archie' in this blog's subculture--got that dog in to a summit when he found out she didn't like them?

Some countries, on the other hand, are run by the competent but beleaguered. Some are run by 'big ignorant feckers from Offaly'. Some are represented by muppets.

Ah, Angie. Well, it has...hmmm...what video should I lose for this one?

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