Is Europe headed for divorce? - by Timothy Garton Ash

Now that the German elections are over, Germany and France will launch a great initiative to save the European project. Marking the centennial of 1914 and World War I, this will contrast favorably with the weak and confused leadership under which Europe stumbled 100 years ago. Before the May elections to the European Union Parliament, the Franco-German duo's decisive action and inspiring oratory will drive back the anti-EU parties that are gaining ground in so many European countries.

In your dreams, Mr. and Ms. Pro-European Union. A new German government won't be formed until just before Christmas. In the German coalition negotiations, European affairs are being handled by — wait for it — a subgroup of the working group on finance. For the three participating parties — Angela Merkel's Christian Democratic Union, the Bavarian Christian Social Union and the opposition Social Democrats — the hot-button issues are all domestic: the minimum wage, energy policy, dual citizenship, a proposed road toll; these things count for more than the future of the continent.

The trouble with grand coalitions is that because mainstream, centrist parties are burdened with the responsibility of government, the field of opposition is left wide open for the protest parties. On the other hand, if the anti-parties succeed at the polls, it could at last mobilize a younger generation of Europeans to defend achievements they take for granted.

It won't be 1914, but 100 years on, Europe will again be living in interesting times.

Note EU-Digest: always great pessimism about Europe from our "Anglo-Saxon Partners" .

Read more: Is Europe headed for divorce? - latimes.com

The Netherlands: Heavily indebted stodgy Netherlands is nation that’ll blow up euro ? - by Matthew Lynn

The Netherlands - economic decline?

The Netherlands has turned into one of the most heavily indebted countries in the world. It has slumped into recession, and shows very little sign of coming out of it. The euro crisis has been dragging on for three years now, but so far has only infected the peripheral nations within the single currency. But the Netherlands is a core member of both the euro and the European Union.

If it can’t survive in the euro zone, then the game really will be up. 

Holland has always been one of the most prosperous and stable nations with Europe — and one of the most pro-EU. It was a founding member of the union, and one of the most enthusiastic supporters of the launch of the single currency. With a rich, export-oriented economy, and plenty of successful multinational companies, you might suppose it had much to gain from the creation of the single economy that was meant to come into being once the euro was successfully launched. 

But instead it has started to play out a depressingly familiar script. It is blowing up in exactly the same way that Ireland, Greece and Portugal did — except on a slightly longer fuse. 

Low interest rates, set mainly to benefit the German economy, and lots of cheap capital, lead to a property boom, and an explosion of debt. From the launch of the single currency to the peak of the market, Dutch house prices doubled, making it one of the most over-heated markets in the world.

Note EU-Digest: Is this reality or more disgruntled Anglo-Saxon Eurosceptism ?

Read more: Stodgy Netherlands is nation that’ll blow up euro - Matthew Lynn's London Eye - MarketWatch

Eurozone versus Atlantic Alliance

In looking at the Eurozone crises it is interesting to note that many reports in the corporate Anglo-Saxon press do not cover some of the real underlying reasons for the present stress within the Atlantic Alliance ( Britain, EU and the USA).

One should not underestimate that the EU has become one of the most important, if not, the most important economic powerhouse (GNP) in the world and slowly but surely also has become more assertive on the world stage . 

Consequently, what is considered a financial crises in the Eurozone is seen by some insiders as just one of the many issues in a power struggle, based on the differences of economic and political philosophy between the existing Anglo-Saxon financial/political establishment and the EU. These differences are now not only apparent in the Eurozone economic sector but also in the approach to Middle East political strategy, human rights, and world trade. 

The result of this struggle is not clear yet and could take quite a while before the EU either becomes more unified or falls back into the US sphere of influence

EU-Digest

ECB’s strength under microscope in euro zone debt crisis - by Martin Mittelstaed

As Europe’s sovereign debt crisis intensifies, financial markets are worried about the continent’s banks. But the strain is also falling in an unexpected direction – on the European Central Bank.

Like its privately owned counterparts, the euro zone’s core financial institution carries large amounts of debt on its balance sheet from Greece and other risky borrowers. It wouldn’t need much of a “haircut” – bond market jargon for a drop in the value of these debts – to seriously diminish the ECB’s capital.

Last month, Open Europe, a think tank based in London, issued an analysis suggesting that a Greek default could erase most, if not all, of the ECB’s capital. “We think that the ECB’s balance sheet is now incredibly exposed and that it’s very weak,” says Mats Persson, director of Open Europe.

Note EU-Digest: as usual the critique on the EU, EURO and the ECB once again comes from Anglo-Saxon circles.

For more: ECB’s strength under microscope in euro zone debt crisis - The Globe and Mail

Anglo Saxon Conservatives on the attack against EU: "Europe's Crisis of Ideas" - by Bret Stephens

"In continental Europe the dominant mode of conservative politics is sometimes pro-business but rarely pro-market: During his 12-year presidency of France, Jacques Chirac railed against "Anglo-Saxon ultraliberalism," a phrase that became so ubiquitous as to almost obscure its crassly xenophobic appeal. There are think tanks, but they are almost invariably funded by political parties and hew to the party line. Not a single economics faculty in Europe is remotely competitive with a Chicago or a George Mason: Since 1990, only three of the 36 winners of the Nobel Prize in Economics were then affiliated with a European university.

Then there is the media. Last week, German Foreign Minister Guido Westerwelle, who leads the country's market-friendly Free Democrats, took to the pages of Die Welt to lament that Germany's working poor make less than welfare recipients. "For too long," he wrote, "we have perfected in Germany the redistribution [of wealth], forgetting where prosperity comes from."

For his banal observations, Mr. Westerwelle was roundly accused of "[defaming] millions of welfare recipients" and urged to apologize to them. It takes a remarkably stultified intellectual climate for an op-ed to spark this kind of brouhaha: It is the empire of the Emperor's New Clothes, adapted to the 21st century welfare state."

Note EU-Digest: If the US financial system is so great why did they nearly destroyed the world-wide economic structure by their greed.Its time Europe bars organizations like Goldman Sachs from its shores, but so far they have not had the guts to do so.

For more Bret Stephens: Europe's Crisis of Ideas - WSJ.com

The Anglo-Saxon Conservative Badmouthing of Europe continues - "Europe Sees Dreams of Power Wane as 'G-2' Rises" - by Marcus Walkere

Many Europeans have long dreamt of a multipolar world, in which diplomacy and international law replace American dominance and military muscle-flexing. But EU-style soft power is turning out to be less useful than expected in dealing with China and other rising powers.

"China and Russia see the world in totally realist, zero-sum terms," says Mr. Grant, adding: "If we want China to take us seriously we have to have hard power," or the ability to twist arms through economic, military or other means. The EU is inherently unsuited to wielding hard power "because it is not a state," says Francois Heisbourg, special adviser at the Foundation for Strategic Research, a Paris think tank.

When India's foreign ministry commissioned Mr. Kumar and other scholars to identify India's strategic interests for coming decades, the experts concluded India could ignore the EU's pretensions to be a world player. The EU has one "silver bullet" that could boost its external influence, Mr. Kumar says: admitting Turkey. "That would change the EU's demography, make it seem like less of a Christian bloc, and raise its acceptance" in Asia and the Middle East, he says. However, Turkey's EU membership talks have stalled amid growing mistrust on both sides.

Note EU-Digest: It is amazing how vindictive Anglo-Saxon conservative forces will become when the EU, or for that matter also more liberal forces in their own countries, take a different course economically or politically.

For more: Europe Sees Dreams of Power Wane as 'G-2' Rises - WSJ.com