September 23, 2011

Exposed: the myth that there is such a thing as European union

Eurofacts Vol 17 No 1
Date: Fri, 23 Sep 2011

Please find attached the latest copy of eurofacts Vol 17 No 1

dated 23rd September 2011 in Pdf format.


Exposed: the myth that there is such a thing as European union

Eighteen months into the debt crisis that has paralysed the European Union and, in the words of German Chancellor Angela Merkel could bring down not only the euro but the EU itself where exactly is the great beacon of peace, hope and prosperity for Europe?

The answer is, in a worse state than it was a year and a half ago.

After the bailouts for Ireland and Greece, the buying of government bonds by the European Central Bank, the proposal of a second bailout for Greece and the prospects of further cash being flung at Portugal and Italy, the EU is in an even deeper hole economically. Growth has stalled, markets have collapsed and the very things that the EU was supposed to bring, stability and cooperation, seem like a bad joke.

Finland says that if it is to contribute to a further rescue fund for Greece, it wants collateral. Germany says this is unacceptable, but Austria and the Netherlands argue that whats good for Finland should apply to them, too.

The European Commission says greater fiscal integration and supervision is the solution and that can be achieved without changes to the Lisbon treaty to end all treaties. The Germans say that is nonsense because the required tools are not available under Lisbon, so there will have to be renegotiation, no matter how difficult that would be. They and other countries have even suggested a whole new treaty. Ireland is dismayed: after what happened over Lisbon, the chances of getting any new agreement through a referendum are vanishingly small.

A row has broken out over whether it is legally possible for a country such as Greece actually to leave the single currency and there are differing views about the financial turmoil that would follow any such exit. Some say that a Greek departure will bring down the euro, others that Greeces remaining in the single currency will have exactly the same effect.

France and Germany, the countries that have most to lose from a euro collapse, have come up with proposal after proposal to paper over the cracks, but none has stuck.

The latest for coordinated economic and financial policies in the eurozone, binding balanced-budget provisions, budgetary supervision by the Commission and a tax on financial transactions have been rubbished as not only inadequate but unworkable.

As the Frankfurter Allgemeine Zeitung commented: It is unclear whether and how much the other member states will follow the wishes of the German-French directorate and the fetish of budgetary discipline (as one French paper put it). The harmonisation of economic, tax and social policies requires Europeans to yield sovereigntyAnd politicians need to finally open the books and take a look and see if the assets and liabilities of the eurozone compute e.g. can they afford it?

The fact is that the idea of union in Europe is and always has been a pipedream, a dewy-eyed myth that was bound to be exposed in a real crisis of the sort into which the EU has now landed itself. The time has come to admit it, to dismantle the EU and to start again with a simple free-trade area shorn of the naive and damaging, socialistic political aspirations that have been attached to it.

Earlier this month, we saw a blast from the hubristic past of the godfather of European federalism, Jacques Delors, who said the EU was on the edge of a precipice. To avoid falling, the choice looks straightforward to me: either member states accept the robust economic partnership I always demanded, or they transfer more powers to the Union.

To which we say exactly what The Sun said in its classic splash headline of November 1990: UP YOURS, DELORS

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