Germany paying heavy economic price

In early 1989 I attended a seminar at the Insead Institute in Paris.

A visiting professor of international economics, who had lectured in Beijing and Moscow, gave a reason for the panic in the headlong drive to integrate the German and French currencies and the formulation of an integrated European state — it was what the Soviet Union had secretly put on the table to Germany.

Massive gas and oil reserves lay dormant in bankrupt Russia. They needed money and the engineering technology to get this priceless energy to market. Germany had the money and the technology and were desperately seeking an independent energy source — Russia would provide it, together with closer economic ties with Germany. As an extra emotive incentive the Russians would not object to an united Germany.

The offer was tempting — a gift horse, in fact. When the French got hold of the offer they panicked and charged headlong for the implementation of an integrated European state with a single currency. As it turned out, later that year the Soviet Union collapsed, but the Germans did provide the money and the technology to Russia.

The French got the single currency implemented without thought or consequence, enslaving peripheral European countries. Today the Germans must rue the day that they didn’t listen to the economic generals on the Russian front.

Dan Costello

Blarney

Co Cork