There has been a historic shift in the balance of power in Europe this week that will have profound repercussions for us all.
After years of subordinating themselves to the European project, not least because of guilt at causing World War II and their abominable conduct during it, the Germans have said enough is enough.
Cyprus must beggar itself to stay in the euro because Germany — which until now has bankrolled delinquent members of the eurozone — has refused to write any more blank cheques.
It has contributed to the island’s bail-out, but the insistence that bank depositors be forced to find the rest sends an ominous signal to other EU nations.
Enough is enough: Cyprus must beggar itself to stay in the euro because Germany - which until now has bankrolled delinquent members of the eurozone - has refused to write any more blank chequesThe message is this: if the euro survives, it must be because individual nations choose to find the means to remain in it. The Germans have done their bit — now they are determined that countries which are in the euro are there because of their own economic efforts, and not just because of Germany’s.
Since Angela Merkel has a crucial election to fight in September, this tough stewardship of German taxpayers’ money is no surprise. Also, as I mentioned here a fortnight ago, a new anti-euro party, Alternative fur Deutschland, is gathering momentum and credibility with a frightening speed.
Mrs Merkel has been able to act in this way because of the shattering of her country’s decades-long partnership with France. In the days of Nicolas Sarkozy and Jacques Chirac, the French persuaded the Germans to act in Europe’s interests in times of crisis, rather than in Germany’s — and Germany usually agreed.
More... Is the Cyprus crisis spreading across Europe? Fears Slovenia will be the next country needing a bailout as cost of borrowing trebles Shattered British expat family's dream of building a home crushed after £135,000 savings raided in Cyprus bailout crisis Cyprus holiday prices could fall as a result of country's economic turmoil Cyprus says it has 'no intention' of leaving the euro as banks reopen for first time since March 15 but cash controls will stay in place for at least a monthHowever, since Francois Hollande became French president last May, the intimate Franco-German axis has broken down. Merkel despises Hollande’s refusal to cut public spending in France, and his insistence on trying to raise taxes, and has little but contempt for him as a politician.
For his part, Mr Hollande wants a devalued euro which would be cheaper on the foreign exchanges and thus encourage exports — something the Germans simply will not countenance.
There can be no meeting of minds, and so Germany is now going its own way.
However, there can be just one result from this truly historic shift in policy: the end of the euro as we know it. It will not only be Cyprus, over the next year or so that finds it impossible to afford to stay in the club on Germany’s terms (even though the island’s president this week said that it would not leave the euro).
In the days of Nicolas Sarkozy and Jacques Chirac (pictured), the French persuaded the Germans to act in Europe's interests in times of crisis, rather than in Germany's - and Germany usually agreed Since Francois Hollande became French president last May, the intimate Franco-German axis has broken down Difference of opinion: Angela Merkel despises Hollande's refusal to cut public spending in France, and his insistence on trying to raise taxes, and has little but contempt for him as a politicianAs with so many other false dawns — how often have we been told by Brussels’ propagandists that the euro crisis is over? — what has happened in Cyprus is just a sticking-plaster, for them and for the single currency.
Indeed, yesterday it emerged that contagion from this week’s crisis is now threatening to engulf Slovenia, said by analysts to be ‘inevitably heading for a bailout’.
It is widely predicted that Cyprus’s gross domestic product could shrink by 20 per cent over the next year. As it does, jobs will vanish and businesses will collapse.
Despite controls on the movement of money abroad imposed by the bailout deal, funds will leak out of Cypriot banks over the coming weeks and months and be spirited away.
More from Simon Heffer... Why Drummer Rigby's killers should be charged with treason 24/05/13 The ugly truth is a smug Tory elite has sneered at the party faithful for decades 21/05/13 SIMON HEFFER: A serious contender? The grey man who could be David Cameron's nemesis 17/05/13 SIMON HEFFER: Think they can't axe David Cameron? Don't bet on it 10/05/13 The gentle giant of British cinema: If he'd been a Yank, he'd have won Oscars galore. If he'd been a Leftie, he'd have been knighted. Why Bryan Forbes was a cruelly unsung genius 10/05/13 SIMON HEFFER: There's only one way for Dave to stub out Farage 03/05/13 Could he trigger a snap general election? 26/04/13 Vote Red Ed, get Red Len as the Labour dinosaurs roar back to life 25/04/13 SIMON HEFFER: The week he woke up to the folly of the modernisers 19/04/13 VIEW FULL ARCHIVEAnd because, with its typical disregard for democracy, the EU forced Cyprus to agree not to vote on these measures, the chances of avoiding civil unrest on the island are slim. The euro is fast making Europe ungovernable, not least because increasingly the currency can only be secured by anti-democratic means, against the will of the people.
Five weeks after its elections, Italy still has no government. Greece is braced for a summer of discontent, as is Spain.
Brussels views these potential flashpoints with horror. A crisis in a bigger economy such as Italy could bring to a head the whole question of the future of the euro.
Italy is too big to bail out. And anyone who thinks France could not subside into full-blown economic crisis is not looking at the fundamentals: this week it registered its highest unemployment figure since 1997, at nearly 3.2 million. Given that 40 per cent of British trade is with Europe, the continued instability of the eurozone is of deep concern to us.
The best thing for Britain is that those countries which can’t hack it admit the problem quickly, and get on with the painful business of defaulting on their debts and restoring their old currencies.
A year ago, few would have said such an outcome was possible — Germany wouldn’t let it happen.
Now, though, Germany is making it clear that if it happens, it happens — and if a smaller, leaner, more efficient eurozone is the outcome, so be it.
History shows it is, always, only a matter of time before Germany ends up dominating Europe. After years of refusing to assert itself, Germany’s time has come again.
The Fourth Reich is here without a shot being fired: and the rest of Europe, and the world, had better get used to it.
Being nasty's no bar to No10, Boris. Being incompetent isHaving worked with Boris Johnson, I understood Eddie Mair’s assertion during a BBC interview that the Mayor of London is a ‘nasty piece of work’. Mr Johnson is selfish, two-faced, a proven liar and has a private life too baroque for one who aspires to the highest office. His friend, ex-convict Darius Guppy, says that as a ‘student of history’, he believes that being a ‘nasty piece of work’ is no disqualification for leadership. It isn’t. However, what Guppy (and how delighted Mr Johnson must be to have such a man defending him) ignores is that the other nasty pieces of work who succeeded were also competent. Boris Johnson is a proven liar and has a private life too baroque for one who aspires to the highest officeThis week a report said only MPs in English seats should be allowed to vote in the Commons on matters solely affecting England. When one or two of us suggested this at the time of devolution in 1997, we were howled down, so it was good to see the general acceptance now of the righting of this profoundly anti-democratic wrong. Why should Scots or Welsh MPs influence matters that do not affect their constituents? It means a Labour government would have terrible trouble getting some legislation through — but since they invented devolution, that would serve them right.
Miliband's a loss, but only for Labour of BritainThe world appeared to have ended on Wednesday morning, when we heard David Miliband was emigrating to America to earn a large amount of money. Why is he such a loss? One of the reasons he didn’t win the Labour leadership was that he had bottled out of taking on Gordon Brown, whom most of the party wanted to see out. I struggle to think of any of his great achievements as Foreign Secretary, or in any other post. I suspect the sense of loss is because those who remain are even less talented than he is. Good luck to him. Some have criticised Mr Miliband for deserting his South Shields constituents in the middle of a parliament and for using the Commons as a springboard to a better job Some have criticised Mr Miliband for deserting his South Shields constituents in the middle of a parliament and for using the Commons as a springboard to a better job. They have a point. But when it comes to the sense of duty parliamentarians owe to parliament and the country, I was more shocked that peers had to be shown a James Bond film to ‘bribe’ them into voting on vital legislation about secret courts. I know many of them regard the Lords as a club and a source of income, but they should remember that membership has duties, too. Now give him his job back!It is reported that ten police officers could be implicated in a conspiracy that led to the ‘Plebgate’ scandal that cost the then Tory Chief Whip Andrew Mitchell, below, his job last autumn.
Because Mr Mitchell was not wildly popular, and could be famously high-handed, too many of his colleagues found it easier to believe the police than to believe him.
I always thought those fellow Tories were wrong. He’s now suing the paper that published the allegations, which he would surely not do if he didn’t think he was going to win.
When will Mr Cameron do the right thing and give him his job back?
But for taxpayers’ help, two banks would have failed in 2008 because they were running out of money. The Governor of the Bank of England, Sir Mervyn King, points to the white-knuckle ride banks on the Continent are having, identifies the risk of contagion, and warns our banks to find another £25 billion of capital to avoid another crisis. He has been attacked for this, because it will restrict the amount of money banks have to lend. But have we learned nothing from the events of five years ago? Sir Mervyn is right — our banks must salt more away, for their sake, and for ours, too.
