Business Spectator

Admittedly, judgements by the German constitutional court can sometimes be hard to understand. Last week’s ruling to pass on the matter of the European Central Bank’s bond purchases to the European Court of Justice is no exception. It is certainly a decision that is easy to misinterpret.

At the same time that London needs to praise the advantages of EU membership to the Scots, it downplays the importance of being an EU member to everybody else. What sounds totally illogical makes perfect sense when seen through the prism of political necessity.

The Bundesbank has put forward its own proposal on how to deal with acute debt crises in the future. On closer inspection, it is plain to see that the Germans are as orthodox as ever.

The illusions of Germany’s alleged role as a strong, prudent and efficient anchor of the eurozone will be harder to maintain in the future. The country is no economic superman, and there are numerous economic problems boiling under the surface.

For the past forty-odd years, since the US’ final departure from the Bretton Woods system and the last remnants of the link between the US dollar and gold, we have indulged in the idea that the old definition of money no longer mattered. We thought we could just declare what ought to count as money. The signs that this system of monetary ruthlessness and lawlessness has run its course are overwhelming. A world that cannot bear the thought of a return to normal is a case in point.

World War I cannot and should not be used as a justification for a European integration agenda that is visibly failing. Least of all should it be used in any discussion relating to Europe’s monetary problems. These are economic questions – and fortunately not questions of war and peace.

It is the tragedy of monetary union that it has pitted whole countries, their economies and their peoples against each other. What should have been a win-win situation has become a zero sum game. The periphery cannot win if Germany does not lose out and vice versa.

It is a strange world. Even the most ardent defenders of the European Central Bank’s interest rate cut last week do not claim it will have any effect. All they say is that it underlines ECB President Mario Draghi’s commitment to save the euro “whatever it takes”. It was a psychological signal to markets rather than a meaningful change of policy, so they argue.