Europe in Crisis: World in Danger?
America’s banking crisis tore into Europe last week with shocking ferocity. Governments from London to Berlin are assessing the carnage and scrambling to prop up collapsing banks. With more failures expected, and unemployment rising, Europe may be facing its gravest crisis since the 1930s. And when Europe is faced with crisis, history says you had better beware: Earthshaking events often soon follow!
The global depression of the 1930s was not just an economic crisis; it was a political and social one too. That disaster sowed the seeds for the rise of radical nationalistic and totalitarian movements around the world. In Russia and elsewhere it emboldened communism. In Japan it led to the Cult of the Emperor. In Britain, it provided fertile ground for the Union of Fascists. In France, it was the Croix-de-Feu.
In Germany, it was the Nazis.
People were desperate, and leaders with radical solutions gained power.
The current global banking crisis is creating desperation in Europe again! We need to take notice: The last worldwide financial catastrophe left more than dead banks. The Great Depression only ended when the world went to war. That economic crisis ended in a global bloodbath!
Right now Europe is shaken. Shortly after Lehman fell in America, dominoes across the Continent began cascading. UK mortgage lender Bradford & Bingley came crashing down; so did Iceland’s third-largest bank, Blitnir Bank. In Germany, Hypo Real Estate Holdings, the largest commercial property domino in the nation, had to be propped up by the government in order to keep it from falling and taking a whole lot of people with it.
Then, the biggest shock to that date hit Europe. Fortis, the 300-year-old bastion of Flemish finance, narrowly avoided tumbling into oblivion by a Dutch and Belgian nationalization. But it didn’t stop there. The next day, Dexia, a financial company whose roots stretch back to 1860, was felled and hurriedly propped back up again by the French, Belgians and Luxembourgers. In Switzerland, banking giant ubs is teetering on the edge, and it is unclear whether even the Swiss government possesses the resources it would take to save it from falling. In Denmark, a whole host of smaller banks are ready to tip over, according to the Financial Times.
But European disasters and emergency rescues were all trumped by Ireland. The Telegraph called the Dublin government’s blanket guarantee of its largest lenders the “most radical bank bailout” in years. Irish taxpayers are now responsible for $400 billion, twice the gross domestic product of the country. On Sunday, Germany went one step more radical and announced it has followed suit, federally guaranteeing all private savings accounts.
The European banking sector is starting to resemble the carnage in America. The Telegraphclaims the European Central Bank (ecb) may be losing control. “The ecb is no longer able to inject liquidity because the money is just coming back to them again,” says Hans Redeker, currency chief at France’s bnp Paribas. The central bank can lend money to endangered financial institutions, but if these banks are unwilling or unable to lend it out to others, then everything remains jammed up. “[T]here is no expectation that loaning money will be profitable and not loss-making,” says UK economist Barry Gills. The banks are instead taking the emergency money and hoarding it back at the ecb.
The European economy is faltering too. The eurozone economy shrank during the second quarter of this year. France is already in recession, and the European Commission expects Germany, Britain and Spain to enter recession soon too. Meanwhile, eurozone unemployment hit 7.5 percent in August, and Germany is now expected to join France, Italy and Spain in the ranks of those with growing numbers of unemployed.
Historically, a Europe, especially a Germany, facing an economic crisis is not a good sign.
The rise of the Nazis and Hitler’s grab for power following the hyperinflationary years of the Weimar Republic may be the most infamous case of a radical leader vaulting to power to save the people from economic problems, but it was hardly without precedent. Comparisons to this time period are already being made—and by German leaders. Germany’s interior minister just warned that an economic depression could turn many of his own people to extremism. “We learned from the worldwide economic crisis of the 1920s (1930s) that an economic crisis can result in an incredible threat for all of society,” said Wolfgang Schäuble in an interview with Spiegel. “The consequences of that depression was Adolf Hitler and, indirectly, World War ii and Auschwitz.” Schäuble indicated that a similar scenario could happen again if the current economic crisis is not properly managed.
Time after time, it has been the pretext of a “crisis”—economic, religious, social, military or otherwise—that opened the door for Europe’s most notorious leaders—Napoleon, Charles the Great, Louis the xiv, Bismarck—to rush through and grab power, then unite nations and start bloodbaths.
The history of Germany, for example, is filled with leaders who effectively capitalized on a crisis to impose their solutions at the expense of the rest of the world.
Otto von Bismarck (1866-1890) was a master of using “crisis” to further Germany’s advantage. In Chancellor Bismarck’s day, Germany was booming, and consequently had the most modern and most powerful army in Europe. To further his pan-Germania goals, and to break the political deadlock between his royalist party and the liberals who were trying to divest the authority of the king, he decided he needed a crisis that would allow him to cement power.
“If there is to be revolution, we would rather make it than suffer it,” he infamously said. So he created a crisis with Austria. Through belligerence and malicious international alliances, Bismarck forced his chosen enemy, Austria, into action—action he could exploit. Because its outdated, slow and cumbersome military would take many weeks to marshal, Austria, when it saw the looming threat from Germany, began mobilizing for defense. Bismarck pounced on this as the opportunity to claim that Austria was about to attack. The resulting “Seven Weeks War” was an astounding and rapid victory for Germany and its modernized army.
“By defeating Austria … and consolidating all of Germany north of the Main River, [Bismarck] was able to offer the parliamentarians something that was even more precious to them than their parliamentarianism: a united national state. It was an offer they could not refuse” (Theodore S. Hamerow, Otto von Bismarck and Imperial Germany).
The results were startling. The war ended the political conflict. Elections returned a massive royalist victory, and even the liberals now supported Bismarck. As German prime minister, foreign minister, and chancellor of the new German Confederation, Bismarck was conveniently able to rewrite the Prussian (German) Constitution without opposition. Thanks to homemade “crisis,” Germany had conquered Austria, and Bismarck had conquered Germany.
It didn’t stop there for the Iron Chancellor. To expand Germany’s reach, and his own influence, Bismarck became a master at instigating crises, which, in turn, swayed opposing public opinion to his side and allowed Germany to pursue militaristic goals and become the dominant power in Europe, crushing France, Denmark and other countries in the process.
When crisis looms in Europe, especially in Germany, the world should take notice.
European leaders have been waiting for years for just such an economic crisis. A crisis of this magnitude allows them to sweep away national sovereignties and consolidate power “for the greater good.”
The European Commission’s top economists warned politicians back when the euro was created that it might not survive a crisis. Analysts have long envisioned that because it has “no EU treasury or debt union to back it up” and a “one-size-fits-all regime of interest rates [that] caters badly to the different needs of Club Med and the German bloc,” the day would come that economic crisis would threaten the EU, reports the Telegraph (emphasis mine throughout).
The fathers of the euro did not dispute this. They knew the European economic union was risky, but they saw it as an acceptable risk—Bismarck might even call it a desirable one—as a last-ditch option to force the pace of political union. As the Telegraph said, “They welcomed the idea of a ‘beneficial crisis.’” And as “ex-Commission chief Romano Prodi remarked, it would allow Brussels to break taboos and accelerate the move to a full-fledged EU economic government.”
Europe’s founders now have their “beneficial crisis.” But it will not be Brussels that will come out on top of the federalist European superstructure.
We can expect that it will be the European nation with the best economy, strongest banking sector, and the largest gold reserves in Europe and maybe the world. It will be the nation that dominates the European Central Bank: Germany.
German banking officials have been awaiting the opportunity to assert control over the European economic union. UK author and political economist Rodney Atkinson wrote in the Salisbury Review earlier this year that a member of the German Bundesbank once commented after being warned that the one-size-fits-all euro could cause serious economic problems, “Good, that means we can use the crisis to acquire the kind of power which otherwise might not be given to us” (April 2008).
Watch: The European crisis will not only act as a catalyst to unite Europe, but it will also cement the status of its leader, Germany.
A crisis-responsive, German-dominated, united Europe is around the corner—and that is not a good thing.
Former British Prime Minister Margaret Thatcher summed it up best back in 1995 when she warned, “You have not anchored Germany to Europe; you have anchored Europe to a newly dominant, unified Germany. … In the end, my friends, you’ll find it will not work.”
Continental European leaders are again blaring warnings of threats to Europe’s safety and security. Europe is in “crisis.” A new superpower is about to rise. Europe’s war-filled history in such circumstances is about to come to life once again, just as the late Herbert W. Armstrong predicted for decades it would.
To get a far more detailed picture of where this European crisis is heading, read Germany and the Holy Roman Empire.