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Just a short while ago Germany underwent a strong debate and was resistant to setting up the European Financial Stability Facility and European Stability Mechanism. Cost was not the issue, sovereignty was. So it may seem a bit surprising that Chancellor Merkel of Germany has pushed so hard for the new treaty that will be effective in March. It appears to give away even more of the German's parliament right to self regulate. But Germany doesn't see it that way. It feels superior to the rest of the Eurozone because of an amendment to the German constitution that limits structural deficits to 0.35 percent of national output. As long as the Germans comply with their own constitution they are in compliance with the debt limits of the proposed EU treaty. (Which Britain will not be party to). While this may come at no cost to Germany, the cost to other countries in the EU could be high, especially for the smaller countries in the EU. Without the UK along for the ride the influence of the Eurozone countries and the entire EU could be diminished in both regulatory and foreign affairs. Also, smaller countries have had their voices effectively stifled the voice of EU countries with smaller economies leaving them distrustful of the EU. While the Germans view the treaty as extending a unified fiscal entity, the joint fiscal union will now share in public debt for members as well as taxation and spending to fight economic adversity. This makes a bit of sense as the current Eurozone crisis was caused only partly by governments and more by the imbalances found in the Eurozone periphery. However, the proposed structure does not address the causes of these imbalances and will not prevent them from occurring again. Since the fundamental problems of the Eurozone are not resolved the coming years of austerity may actually worsen them. The employment outlook also looks very bleak in the coming future. High unemployment throughout the Eurozone is likely to continue through 2012. Countries most in need of resolving employment problems are least equipped to do so. Spain for example has a two tier employment system comprised of permanent employees who by law can never be fired and temporary employees who can be let go at will. Spain's regulations are counter-productive. Permanent employees are not motivated to be very productive. On the other hand, temporary employees work hard in the hopes of obtaining permanent status. Of course few do, as soon as their is the slightest upset in the economy they are the first to be sacked and contribute to high unemployment rates. Other countries have equally destructive but different rules and regulations. government mandates are changing too. Lower pension benefits, longer times to retirement, less vacations and benefits are all being implemented throughout the Eurozone. There is no single HRIS—otherwise known as a human resource management system--that can centrally administer a company with locations throughout the EU. Human resource management is a nightmare for multinationals and compliance with each countries different employment laws requires at least a human resources department wherever business is done. this is a costly expense only made worse by the proposed treaty. Germany may think it has protected itself from the effects of the treaty on sovereignty, but, if contagion from countries who are not doing as well as Merkel's country invade, economic forces may trump Germany parliament forcing it to take actions it would rather avoid.
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