Will Germany finally rule Europe?

TRANSCRIPT
Germany fought and lost two wars in its attempt to rule Europe. But they may soon win with their economy what they failed to win with their military.

In the 1990’s European nations formed an economic union and adopted a common currency, the euro. This allowed the less economically competitive countries, like Greece, Portugal, Spain, Italy – the new Club Med – to borrow money at the same rate as Germany.

And they went hog wild. Instead of investing in business to make their workers more competitive and create broad, sustainable economic growth, they kept labor prices high, expanded social programs, and increased imports, mostly from Germany. And racked up huge deficits and debt loads, borrowing again, mostly from Germany.
Germany did just the opposite, keeping labor prices low, increasing efficiency and productivity, and ramped up exports. They used those profits to lend to Greece, Spain and Italy.

And then the merry-go-round stopped. The debt load of Greece now exceeds their annual GNP. Their economy is on the verge of collapse. They can’t do what banana republics traditionally do to get themselves out of this mess – inflate their currencies – since Greece doesn’t have its own currency anymore. They might default on their loans, but they’d likely be kicked out of the European Union and left in a severe recession. They could drastically cut back social programs, but it could trigger a social revolution.

OR….they could get bailed out….by the one strong, thriving economy in Europe – Germany. So far Germany has refused. If they do they’re likely to redraw the rules for the European Union along lines they prefer.
The Club Med countries will soon have a choice – face potential economic disaster and social revolution – or accede to Germany’s terms.

Does this sound familiar? Isn’t the United States borrowing too much money (mostly from China) to purchase imported goods (mostly from China) because our workers cannot compete on price (mostly because of China)?