Europe Union? -Germany and Russia Union?

The theory in the EU was everyone would abide by the rules and in acting responsibly the weaker states would put in place the necessary conditions to allow for sustained economic growth to take root. The expansion to 27 states was based on this assumption and of course the EU was not doubt encouraged by the USA to undertake the expansions to contain the Russian influence.   Greece which has almost never run budget surpluses  has seemingly not made structural changes to meet EU rules( Portugal, Italy and Spain are similar) and has continued to increase benefits and numbers in the public services and allowed by omission the nonpayment of taxes( corruption) to continue making this become embedded in society as a cultural value.  Greece’s  GDP is estimated to be close to a third bigger than the offical data shows because of this hidden economy.  Italy is the same with a large hidden untaxed and for offical purposes non existent sector of the economy.

They along with other EU countries have assumed the richer states( and more responsible)  would simply just keep supporting them. With one currency these countries cannot devalue their currencies to engineer a re adjustment in the economy,  the mechanism that is open to independent states with their own currencies.

Germany is now thinking aloud it does not wish to continue to fund the irresponsible weaker states and that maybe such states should leave the EU.  As well, most countries have consistently not met the fiscal  rules of the EU and so in this atmosphere of corroding compromise the political drivers for european integration are being forgotten. With the end of the cold war even these noble political drivers( to prevent wars) may no longer be seen as necessary.

The Germans and Russians have since Chancellor Schroder’s time been moving closer to each other.  His appointment to Gasprom was a harbinger of this re approachment between these two powerful states. Germany’s reliance on Russia for most of its energy makes such an alliance necessary for strategic and national interest objectives. One scenario that is now being played out is a union between Germany and Russia. This has significant geopolitical and economic  consequences for the world. It has potentially terminal consequences for the European union and the euro. Germany and Russia both face demographic changes that  unless government action is taken like immigration, very unlikely rise in birth rates or location of manufacturing( investment) in each others countries, will see a long term decline in economic growth and pressure on the welfare benefits that are a major feature of not just Germany but EU states generally.  Russia benefits in work being provided for its working population and transfer of technology including the German management and work ethic. Russia’s workforce will expand for another generation ( as population falls in absolute terms)  as Germany’s working population declines.

Both Germany and Russia want to get away from under the USA’s influence and who knows what will happen to NATO and  smaller EU states ( like Poland and the Baltic states)  in this scenario.