Spiegel
August 1, 2011
The euro zone looks set to evolve into a transfer union as it struggles to overcome the debt crisis. There are a number of options for the institutionalized shift of resources from richer to poorer member states -- and Germany would end up as the biggest net contributor in every scenario.
As a practicing Catholic, Philipp Rösler knows that remaining true to your beliefs sometimes requires you to resist reality. The head of Germany's business-friendly Free Democratic Party (FDP) and the country's economics minister provided a hint of his unshakable conviction two weeks ago when the heads of state and government of euro-zone countries met in Brussels for an emergency summit to hammer out a second bailout package for Greece. "The summit showed that we are not headed toward becoming a transfer union," Rösler claimed.
In reality, the summit actually did push the European Union a good bit closer to becoming a transfer union -- with the forceful assistance of Rösler's boss, German Chancellor Angela Merkel.
Already decades ago, the European Union started providing financial assistance for building roads, setting up telecommunications systems and assisting underdeveloped regions. In 2009, Germany transferred €6.4 billion ($9.22 billion) more to Brussels than it received from it. France and Italy are net contributors as well, as opposed to Poland, Portugal and Hungary (see graphic). But whereas these sums are limited and earmarked for specific purposes, the measures tied to the euro bailout involve unprecedented payments -- especially after the meeting in Brussels.
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