, , , , , , , ,

Fortunately, after a gruelling six months, Europe will soon be on vacation. The half-year of anguished and angry debate over the Greek financial crisis has left the 28-nation European Union bruised and battered. A deal of sorts has now been done to avert a Greek exit from the Eurozone. But, Europe’s morale is low, emotions are running high and nobody likes anyone any more.

It’s time for a break. In time-honoured fashion, EU leaders are indeed heading off for a holiday to refresh, revive and re-energise. As of July 1, tiny Luxembourg is in the EU chair. But because August is Europe’s “dead” season, the EU will only come to life in September, giving Luxembourg a relatively short time at the helm.

But, it doesn’t matter. In fact, nothing and no EU country really matters — except Germany.

If there’s one thing that has become clear over the last half-year, it’s that Germany rules Europe — even, according to some, Germany is Europe or at least wants to shape Europe in its image.

And not everyone likes it. Germany’s tough line on austerity and refusal to countenance debt relief for Greece may have won the admiration of some countries like the Netherlands, Finland and Slovakia but others are critical of Berlin’s unashamed bullying of Athens.

Importantly, a majority of European and American economists — including experts at the International Monetary Fund (IMF) — have made clear that Germany is on the wrong track, that a country which is already on its knees cannot be expected to immediately stand up tall and become even taller. In other words, Greece cannot be expected to pay its creditors and also notch up high economic growth rates.

What a mess. Much-respected author Philippe Legrain has voiced his anger at the “brutal, vindictive and short-sighted exercise of German power against Greece”.

“Let’s be clear,” warns Legrain: “What Berlin and Frankfurt [the seat of the European Central Bank] have done to Greece, they can — and they will — do to others.”

Others are equally tough. Renowned economist and Noble prize-winner Paul Krugman has been equally vocal in his criticism of the austerity that has been imposed on Greece by Germany and others.

There’s no doubt: Germany is the monetary union’s dominant economy, and its chancellor is the region’s dominant leader, with virtual veto power over Eurozone-wide decisions. That puts the spotlight squarely on Angela Merkel.

Much of the critics’ ire is in fact directed at Merkel, who is viewed by many as a symbol of all that is harsh about Germany. But in truth, the German who everyone loves to hate is the hard-nosed finance minister, Wolfgang Schauble, who once said that Greece “cannot be a bottomless pit”.

German public opinion appears to be staunchly behind Merkel and Schauble with many Germans arguing that Greece is unworthy of their aid. “NEIN”, blasted a headline in the tabloid Bild earlier this year. “No more billions for greedy Greeks!” it insisted.

What rankles for many is that Merkel and Schauble have played the unrelenting taskmasters, treating Greeks not as partners, but as spoiled children who could be set right only by the rod.

There has even been talk of a Europe divided along religious lines, with a German Protestant belief in austerity and thrift contrasted with a Catholic/Orthodox tolerance for sinners — provided they repent.

The Syriza party of Greek Prime Minister Alexis Tsipras is not alone in bridling under German diktat. Gaining popularity in Spain, where unemployment is 22.5 per cent, is the leftist political movement Podemos, which also seeks a fairer deal from the rest of Europe. In Italy, Beppe Grillo, leader of the anti-establishment Five Star Movement, has called for a referendum to decide if Italy should remain in the monetary union.

There is no doubt that months of EU acrimony since Tsipras’s election in January as Greek premier at the head of an anti-austerity coalition has tarnished the bloc in the eyes of both its own citizens and globally.

The bail-out agreed for Greece has come at a great cost to the EU’s reputation both at home and abroad. At the end Merkel tried to play the middle ground but Schauble will be seen by some critics as the true villain of this piece.

Significantly, criticism — and envy — of Greece is not limited to Berlin’s conduct during the Greek crisis. Berlin is also under fire from its European partners for being too eager to cash in on last week’s nuclear deal with Iran.

As this column underlined last week, Europeans are eager to get a piece of the economic action in Iran. Not surprisingly given Berlin’s commercial ambitions and outreach, the first EU policymaker to make his way to Tehran was Germany’s Vice Chancellor Sigmar Gabriel, ahead of the EU’s Foreign Policy Chief Federica Mogherini, French Foreign Minister Laurent Fabius and other assorted European foreign ministers.

Germany’s EU partners may slam Berlin for its economic bullying and high-handedness. But they also admire the country for its strong and effective economic diplomacy.

It appears that when it comes to Germany, Europeans face an age-old dilemma: they find it difficult to live under Germany’s thumb, but they can’t really live without Berlin either.