The recent difficulties facing the German political parties after the last election to form a viable government have sent shock waves across Europe.

In my opinion the grounds for the fears caused by the impasse are dual. One has to do with the internal affairs and stability of the German economy, society and self-confidence. As the economic motor of the continent for the past 60 years and as the main bank and contributor with cash to every country across Europe, damage to this economy would affect everybody.

The guilt complex that Anglo-Saxon movies and constant reminders of the horrendous two world wars that Germany caused are forgotten with great difficulty.

Unable to compete with the precision and effectiveness of German companies and the enormous capacity for savings rather than spending by German households have led to Germany having a favourable balance of payments with all countries of the world. This in spite of paying over 10 per cent of its GDP every year to support the economies of the other 27 countries of the EU. Loss of stability within Germany and the subsequent rise of the nationalistic right wing extremists, unwilling to keep on paying, is a cause of worry.

However there is a second reason for the jitters that Angela Merkel’s difficulties to form a coalition have brought about. These latter concern the future of the EU and its re-foundation, as French President Emm-anuel Macron likes to call the renewal of the inner core of the EU.

Without a stable Germany and a creative France, the long-needed weeding out of the European Union of all scrounger Member States, like some of the new eastern members like Hungary, or the thieving south countries like Cyprus and Malta, and the island State of tax evasion, Ireland, would be further delayed.

After 25 years of seeing the great benefits of globalisation, led by the previous US governments and the EU, being diverted by the large multinationals away from the tax coffers of both the US and the EU through subterfuges and collusions with countries like the UK with its offshore havens, Ireland Luxembourg, Malta and Cyprus, European taxpayers are fed up.

If we want to join the inner circle, which I believe we should and in which we inherently belong, we shall have to change our present business model

Citizens of the hard-working countries of the EU have seen job losses to China and the Far East and very few social improvements, job retraining or new jobs at home, because the governments of Italy, France, Sweden, Spain, Germany, Belgium, Denmark, Finland, Poland, the Czech Republic and others suffered losses of tax revenues. This loss amounts to several trillions of euros over the past years.

Another cause for the EU malaise has been the constant blocking by the UK, because of its fear of a German-dominated continent, of all attempts for more integration in financial services, banking, free movement of people, single currency, etc.

Ever since it joined the EU, the UK has strived to turn the EU into a loose collection of independent countries tied only by trade and business. While the founder members always had the objective of deeper integration and finally, even, and why not, the creation of a federal or confederal state of Europe.

Having reached many areas of deeper integration among a core of eurozone and Schengen zone countries, it was time to move to financial, budgetary and fiscal union. This was the straw that broke the English camel’s back. Thank heaven for David Cameron, who called the referendum that has freed the EU from the blocking powers of the UK.

Macron saw this opportunity to fight the growing right and to present a blueprint for a Europe of concentric circles.

The inner circle will surge ahead with fiscal unity, self-funding, common social policies for renewal of manufacturing and services base in the EU, innovation and research, and common rules on migration.

The outer circles would only benefit from these common rules if they joined the inner circle and followed all the rules without exception.

These rules would include the euro, banking union, common budgetary and fiscal union with an EU finance minister and a minimum tax level for all activities, whether sales of goods or services, within this zone. Transfers of profits towards the outside would be stopped in the name of solidarity and taxed where the buyers and not the sellers are located.

Malta would certainly suffer as a result and has to scramble to change its foul business model of today that is based upon robbing Peter in Europe to pay Paul in the multinationals and wealthy individuals’ pockets, earning enough crumbs from this illegal trade to keep its economy growing.

Instead, if we want to join the inner circle, which I believe we should and in which we inherently belong, we shall have to change our present business model.

Thus let us all pray and hope that the German socialists, who have always been firm believers in the European dream, from Willy Brandt to Gerhard Schroeder and Sigmar Gabriel and now former president of the EU Parliament Martin Schultz, see the light and do their duty towards their country, our beloved EU and indirectly the rule-of-law-loving Maltese.

John Vassallo is former senior counsel and director for EU affairsat General Electric, former vice-president EU Affairs and associate general counsel Microsoft and former ambassador of Malta to the EU.