This article was first published in and we republish here with kind permission.


During the Coronavirus crisis in the EU, any pretence of cohesive action and obedience to EU rules went out of the window. The weakest, like Italy, had to fend for themselves and the strongest like Germany broke all the rules – in particular State Aid rules – to cause a massive imbalance of power in the “Single Market”.

Germany accounts for more than half of the state aid that has been approved by the European Commission since the pandemic began (even though it accounts for only 20% of EU GDP)  and Thierry Breton, the French EU industry commissioner noted that Germany was spending €100bn to help its companies through the Covid-19 lockdown while France is spending €20bn. France would find it impossible to compete on that basis – so we can imagine how damaging it is to other EU countries. As Ambrose Evans Pritchard wrote in the Telegraph:

“Germany is drawing on its AAA-rating and deep fiscal pockets to bail out Deutschland Inc with €1trillion of credits, guarantees, and emergency spending. Those of us who covered the eurozone austerity crisis from 2010-16 note with weary cynicism how rigidly EU budget law was enforced during that episode (when it suited the northern creditor bloc) and how quickly state aid law is being waived this time because it suits Berlin.”

When the Euro devastated the economies of Greece, Spain and Italy and the EU’s officials forced Greece to privatise State assets, German firms were in the forefront of the purchasers of those assets. But today, as German firms’ share prices (like everyone else’s) have fallen dramatically Germany changed its foreign investment law on Wednesday 8 April to protect their companies from hostile foreign takeovers during the coronavirus pandemic.

Ursula Von der Leyen, the German EU President complained of the “unlevelling of the playing field in our Single market” “What we start to observe now is an unlevelling of the playing field in our single market.”


As Germany milks the EU of funds, it threatens the means of the EU to help other member states. In a major judgement of the German Constitutional Court the European Central Bank’s purchases of EU member states’ debt (bonds now totalling Euros 2.189 trillion) has been rejected and the German Court warned that what they were doing was against German Law and that Germany could withdraw from such transactions. This has led to a threat from the European Commission to sue Germany for failure to obey European Law – having found in its own favour on this matter in 2018!

The German court was withering in its 7 to 1 judgement saying that the European Court’s approval was “incomprehensible” and “ultra vires”. As (the always excellent) Ambrose Evans Pritchard in the Telegraph summarised:

“The German view is that ECB policies have been designed to benefit weaker southern European countries at Germany’s expense”

Of course! otherwise the political and economic collapse of the EU would have come sooner. If Germany:

  • refuses to form a fiscal union with EU member states,
  • refuses a social welfare union which would shift vast sums to the areas of the Eurozone with the highest deprivation and unemployment (as London does to Sunderland or South Wales or Scotland)
  • refuses to form a banking union to support poor countries’ banks and their industries – as any normal country would do
  • then the ECB had no choice but to use monetary policy (“printing money”) to support the economies of Italy, Greece and Spain.

According to the EU oligarchy “EU law is supreme”. To which the German constitutional court replies “only if the right to subsidise poor countries through direct fiscal payments were in the treaties” – which it is not. Of course Germany has always found ways (at least to its own satisfaction) of exempting itself from EU measures claiming that they contradicted the rights of Germans as laid down in the GERMAN constitution. This was always rubbish – for those EU competences that they had signed up to. But like all Courts given supreme power the ECJ has gradually expanded its power by degrees over decades until its judgements and EU practice has formed an effective “constitution” of its own.

For over 60 years the EU system suited Germany economically and politically. But then the crises began to mount. The EU lost its democratic support, the Euro destroyed its members’ finances and its crises demanded (especially after the 2008 financial crisis) more inventive forms of monetary creation in order to “save the Euro”.

The Bundesverfassungsgericht (BVG) judgement has enormous implications now because the years of ECB money printing and purchase of member states’ debt (bonds) and decades of German trade surpluses (which have accrued unpaid credits against other member states – called “target 2” – of some one trillion Euros) mean German liabilities (ie what they are owed by others) have mounted to unsustainable levels and funds are being transferred to the poorer countries in defiance of German public opinion and the letter of the law – even though it is German Euro-policies which have brought this about!

In 2001 I wrote a book (“Fascist Europe Rising”)

which even then, two years after the foundation of the Euro, showed strong divergence between the economies within the Euro and I predicted what has happened since.


The COVID19 crisis and its appalling effects in Italy (which was cruelly ignored by EU states in its medical hour of need) have led to the EU raising 750 bn Euros of “pandemic bonds” of which 40% has been spent on buying Italian debt. This was not so much generosity towards Italy (no more than refinancing Greek bonds was to help Greece) but to stop a massive financial crisis starting in Italy which would destroy the German controlled EURO!

COVID19 means in the poorest EU countries the same as elsewhere – enormous public debt issuance. The ECB’s purchase of Italian bonds was designed to make this possible. Without that support Italy would go bankrupt – or rather openly bankrupt! – bringing down the entire EU edifice.

German constitutional law forbids foreign powers raising general funds from Germany for spending elsewhere. And indeed – outside the specific competences set out in EU treaties – they are right.

But the combination of the financial crisis of 2008 and the continuing vast (novel) money printing of the age of Central Bank “quantitative easing” combined with the COVID19 crisis (which is prompting the EU to consider the raising of another Euros 500m) we can no longer easily distinguish between “fiscal” support for EU states (which Germany rejects totally) and “monetary” support (which has been going on for years).


So the crunch has come. Germany has reached the “Gorbachev Point” and – like Russia in 1989 – must decide whether it really wants to bear the full cost of its new EU empire or see it collapse with unrecoverable debts, a return to a high valued Deutschmark and much lower trade surplus and deem the entire EU political edifice a “sunk cost”.

It is like Boris Johnson and the HS2 train project. Can Merkel dump what has cost so much and spend time and money on more profitable pursuits (like domestic democracy!) or decide to pour more hard earned money down the drain, frustrating constitutional democracy at home and kowtowing to the corporatist “grand projet” of a European Superstate?

To the British democratic sovereigntist (for years a rare species) it was always evident that the EU and the Eurozone were, respectively, democratic and economic impossibilities. Are the Germans now waking up to the same realisation? They might be:

Professor Heinrich August Winkler, 81, Professor Emeritus of modern history at Berlin’s Humboldt University, in an interview about Germany’s future in Europe said:

HAW: “In the so-called refugee crisis of 2015 and 2016 one could hear several times that we Germans are now something like the world champions of helpfulness and philanthropy. The feeling of being able to show others the way by adopting an emphatically moral attitude was not free of traces of national arrogance.”

Interviewer: Because the Germans have had such bad experiences with their nation state, do they think today that other peoples should also overcome their nation state?

HAW: The Germans ruined their first nation state, Bismarck’s Reich of 1871. There is nothing to interpret about that. But that does not yet give them the right to deny others the right to a nation and a national identity. More self-critical distance to their own history and less moral claims to leadership over others, that would be the right conclusion to draw from this.


Germany has for a long time given up all pretence that what the EU created was a European Germany. It has long been – as Margaret Thatcher warned – an overt German Europe with Germany now the deciding factor in all economic, foreign and economic policy. This was indeed the well expressed fear of British and American Allies after the Second World War (see for example James Stewart Martin “All Honourable Men”)

Ironically someone has just sent me a comment from the German “Frankfurter Zeitung” of the 18th May 1930 responding to France’s proposal for a “European Union”! While saying that Germany must not ignore such a proposal:

“…any proposal for the betterment of the world can only have a chance of success if a power of the first order brings it forward and any such power will think first of its own interests”

France was then more powerful than the financially weakened and politically chaotic Germany of the Weimar Republic so Germany found itself facing a “French Europe” and in the same position as other European countries are today in the face of a “German Europe”. And in the above quotation from the FZ we see neatly summarised the whole flaw in a supranational European State. Any power credible enough to create a European State cannot be trusted to control it.

The shape of the EU today, the removal of democratic sovereignty from the nation states, the destruction of 28 democratic constitutions, the rule by a centralised technocracy in Brussels (but largely controlled from Berlin), the break up of Czechoslovakia and Yugoslavia (restoring the same petty states which were so loyal to Nazism in the 1940s) the attack on Ukraine (where openly Nazi gangs removed an elected Government) – all these elements demonstrate a return to the European structure of the economic and imperial Nazism of the 1930s and 1940s – whether intended or not.

While a large minority of Germans are unhappy with this situation their Government pursues the power grab – daily leading Europe to its democratic and financial destruction.


The most obvious equivalent regime in the world today is the extreme nationalist and socialist regime of the People’s Republic of China – an atheistic, anti democratic, State manipulated corporatist totalitarian dictatorship, stealing western technology, expanding its power throughout the world, preying on poor countries (like Italy and Greece) through debt dependency and flouting international law in the South China Sea as it takes over other countries’ territorial waters. The threat to invade Taiwan is ever present.

Not surprisingly a Germany which is expansionist in Europe – and sees corporatist capitalism (not unlike the Chinese Communist Party) as preferable to democracy – increasingly sees this kind of China (its major export market) as a friend!

A German Opinion poll reported in The Times (20th May) shows that the German public increasingly see China as an ally, with 36% saying it’s more important to have warm relations with China than the US, while 37% said the opposite. Only one in ten Germans saw the USA as Germany’s principal ally.

Not a pretty picture – but one which has been building for decades. It has been a process described on this website and in my books over the last 30 years – but censored and ignored by the British political and journalist Establishments. They did the same in the 1930s.

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