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Walker's World: Turning out EU's lights

By MARTIN WALKER, UPI Editor

WASHINGTON, Jan. 27 (UPI) -- While the stunning election victory of Hamas in Palestine has dominated the world's attention, another important bombshell has exploded in Berlin, where it now seems that a majority of Germans now see the European Union as the problem, rather than as any kind of solution.

The Berliner Zeitung newspaper has obtained a leak of the latest Eurobarometer opinion poll, organized by the EU's own Commission, that shows a large majority of the 1,534 Germans polled blaming the EU for economic and social problems. And 84 percent of Germans polled fear that German jobs are likely to be lost to EU countries where labor costs are lower.

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The poll also showed that one in two Germans feared that further European integration, for example the inclusion of Turkey and/or Ukraine into the 25-member EU, could result in an economic crisis. As a result, 59 percent of those polls said that no further enlargement should take place in the foreseeable future.

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Almost two-thirds of those polled, 64 percent, said declining social standards and welfare and pension benefits were a serious problem for Germany, and while they did not blame the EU specifically, they said that EU membership was "part of the negative development" making German life less agreeable.

Germany, with the largest economy and biggest population in the EU, has traditionally been the political and commercial locomotive of European integration, the country that usually bankrolled the complex deals reached to resolve the EU's internal crises. But Germany's sluggish economic growth and high unemployment over the past decade as the country has grappled with the challenge of integrating the former East Germany have tested this unique German role.

Many of the EU's current difficulties can be attributed to this German weakness, and the vacuum of European leadership in policy and planning that resulted. And while Germany's new Chancellor, Angela Merkel, seems ready to resume that role of German leadership and is currently winning high approval ratings from German voters, the broader unpopularity of the EU among Germans and their doubts about further enlargement will limit her room to maneuver on the EU stage.

This leak of the Eurobarometer poll was echoed by two further unhappy developments for the EU. First, a survey of members of the Association of German Chambers of Industry and Commerce published by Die Welt newspaper found 76 percent of the members said that the EU "interferes too much into business."

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German businessmen are not against the EU in principle. Indeed, the poll showed that a majority of 58 percent wanted harmonized environmental rules across Europe and also preferred a single Europe-wide tax system - a development that key nation states like Britain adamantly oppose. But the image of the EU as bureaucratic and over-interfering in business is damaging for the EU, an organization whose prime boast is that its single market has helped build European prosperity.

Another damaging development was the claim this week by Frits Bolkestein, the former EU Commissioner for the internal market, that the EU's new single currency, the euro, may not survive in the long term. In a speech to Dutch businessmen in London Wednesday Bolkestein warned that the euro would face a dramatic test in about ten years time when the pension crisis hits Europe "ruthlessly," with a swelling number of baby-boomers reaching retirement while too few young workers are available to pay the taxes needed to service the pensions.

Important states like Italy, the third largest economy in the Eurozone, are wholly unprepared for this crisis, Bolkestein warned.

These states "will be forced by political pressure to borrow more and increase their budget deficit, with consequences for interest rates and inflation," he said. And all other countries using the euro would be affected by the consequent deficits and pressure on the currency, he added.

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"The real test for the euro is not now, but in ten years time," Bolkestein went on. "Therefore, in my view the long-term chances of survival of the euro should be questioned."

This looming pensions crisis is one of the arguments used by opponents of the euro in Britain, Sweden and Denmark against their countries joining the single currency. They claim that the choice would be between bailing out high deficit states like Italy, or cutting Italy loose from the rest of the eurozone in order to stave off a currency crisis.

A further blow for the EU came this week when another former Commissioner, Austria's Franz Fischler, warned that the EU risked becoming "the first empire in history to go down before it was founded."

Fischler, the veteran Agriculture Commissioner throughout the 1990s, was launching his new book, 'Europe: The Unwanted State," on the margins of a conference convened in Salzburg by the Austrian government to launch "a new political and cultural debate" to rethink what the EU is and what it should become. Austria, the current holder of the rotating Presidency of the EU, launched the conference to coincide with the 250th anniversary of Mozart's birth, and to tackle the crisis of confidence that has gripped the EU since Dutch and French voters rejected the draft new EU constitution their referendums last year.

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Any restoration of confidence in the EU will depend heavily on German economic recovery, and there are strong indications that this may be coming. Germany's business confidence index reached a 6-year high this week, with signs of increasing productivity, good profits and renewed investment.

But against the good economic news came a further blow this week to German self-confidence: new demographic figures showed that Germany had the world's highest proportion of childless women. This underlines the coming pension problem that Bolkestein had stressed. The statistics, collected by the EU in 2005, found that thirty per cent of German women have not had children, and women graduates were even less likely to breed, with 40 percent of them having no children.

Unless the birth rate recovered and began to grow again, as it is doing in Britain, Sweden and France, Germany would have to "turn out the lights," commented the country's Minister for Families, Ursula von der Leyen.

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