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What went wrong with the EU & turned into a Nightmare?

 I wrote this morning that I am done with the European Union.  Not with the idea as such but with the club-management and its statutes. I don’t like the way it’s run, I don’t like to be looked from above with a snobbish hulled nose.  Something went wrong with this club that used to be my favorite.  I have been a EU supporter for the last 30 years. But recently this relation has started to break. I feel like appearing to a party I have not been invited yet I have to come up for the drinks. And that some of the hosts would love to kick me in the ass and out of the door. However they don’t do it. In fact, once I am in, they don’t let me go out.  There is not membership <unsubscribe>. It’s not  foreseen in the club. So I stay there and bear all these hostile eyes watching at me. How come? How did this club that lured me as a European ‘promised land’ turned into a cage and nightmare?

Gideon Rachman, columnist in Financial Times seems to have an answer to my question. It is a very sober approach, and you should read it.

The article is published here in KTG-Blog with courtesy of its author Gideon Rachman

Political union cannot fix the euro

By Gideon Rachman

Published: June 20 2011 20:26

“As the Greek crisis worsens, so voices are being raised demanding new and more radical approaches. Forget the

sticking plaster bail-outs and slice-by-slice austerity packages. The ultimate solution to the eurozone debt crisis is

“political union”.

Last week Nout Wellink, the Dutch central bank governor, became the latest senior figure to float this idea, when

he argued that the eurozone needs “an institutional set-up that has characteristics of a political union”. According

to Mr Wellink, “a European finance ministry would be an important step in the right direction”. Jean-Claude Trichet,

the head of the European Central Bank, has also backed the creation of a European finance ministry – which in

turn implies a much larger central budget and more decisions on spending and taxation taken in Brussels, rather

than in national capitals.

Those who argue that “political union” is the solution to the current crisis seem to believe that Europe’s problem

is institutional. Unlike the US, the eurozone does not have the political institutions to back up a common currency.

But if Europe was just equipped with a finance ministry or the facility to issue eurozone bonds or to tax citizens

directly, everything could be fixed.

This is a profound misdiagnosis of the crisis. The real problem is political and cultural. There is not a strong

enough common political identity in Europe to support the single currency. That is why German, Dutch and

Finnish voters are revolting against the idea of bailing out Greece again – while Greeks riot against what they see

as a new colonialism imposed from Brussels and Frankfurt.

To argue that even deeper political integration is the solution to this mess, is like recommending that a man with

alcohol poisoning should treat himself with a more powerful brand of vodka.

It is important to understand that the origins of the current crisis lie precisely in the dream of political union in

Europe. For the true believers, currency union was always just a means to that greater end. It was a way of

“building Europe”. If bits of the construction were missing – such as a European finance ministry – they could be

added later. Helmut Kohl, the chancellor of Germany in the early 1990s, was so convinced of the need to bind a

united Germany into the European Union that he was prepared to press ahead with the euro, in the face of 80 per

cent opposition from the German public.

At a seminar in London last week, Joschka Fischer, a former German foreign minister, who is one of the boldest

advocates of deeper European unity, was unrepentant in defending this elitist model of politics. He insisted that

most important foreign policy decisions in postwar Germany had been made in the teeth of public opposition. “It’s

called leadership,” he explained.

Such leadership is all very well, if it is vindicated by events. However, if elite decisions go wrong, they create a

backlash – which is exactly what is happening in Europe now. German voters were told repeatedly that the euro

would be a stable currency and that they would not have to bail out southern Europe. They now feel betrayed and

angry. Greek, Irish, Spanish and Portuguese voters were told repeatedly that the euro was the route to wealth on a

par with that of northern Europe. They now associate the single currency with lost jobs, falling wages and slashed

pensions. They too feel betrayed and angry.

As a result, the space for political manoeuvre is narrowing on either side of Europe’s creditor-debtor divide. The

Financial OP-ED COLUMNISTS

COMMENT

FT.com print article http://www.ft.com/intl/cms/s/7944de54-9b69-11e0-bbc6-001…

1 von 2 21.06.11 09:45

Greek government can barely muster a majority to force through its latest austerity package. The German

government of Angela Merkel is losing support and is facing an increasingly Eurosceptic public. Meanwhile,

radical anti-European parties are on the rise in other creditor nations, such as Finland and the Netherlands. Most

European leaders still blithely assert that they will do whatever it takes to save the euro. But these leaders operate

in democracies. If they take decisions that voters simply cannot accept, they will lose their jobs.

The relations between the peoples of the EU are cracking under the strain of the euro crisis. In Athens,

demonstrators wave EU flags with the swastika imposed upon it. In Germany, the euro crisis has made it

permissible to denounce profligate and corrupt southern Europeans. A single currency that was meant to bring

Europeans together is instead driving them apart.

The politics of fiscal transfer are tricky, even in long-established nation states. Think of the strains between

northern and southern Italy; or between Flanders and Wallonia in Belgium. But the tensions are far worse in a

newly created eurozone of 17 nations with different histories, cultures and levels of economic development. Simply

ignoring this – and trying to press ahead with a deeper political union – would invite an even more dangerous

backlash in the future.

But if political union is not the answer to Europe’s problems, what is? There are two possible solutions. The

eurozone leaders might somehow patch the current system up. Or the weaker members of the currency union –

above all, Greece – could leave. That process would be chaotic and dangerous. But Greece, as it stands, is a

demoralised country that has lost the sense that it controls its own government. Leaving the euro might just be

the beginning of a national regeneration.”

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4 comments

  1. Were Greeks ever in control of their own government? I doubt it. And this crisis has one good thing for it: it made that abundantly clear.

    As for Germany: If an “elitist” decision goes wrong the people should vote out those who are responsable. As for Spain, Portugal and Greece: When they were lied to they should vote the lyers out the next time they get the chance.
    Over the years, all these people did not do that. Why? That’s to diverse to write here. But as much as I do share your notions about the EU-leadership and it’s institutions, I don’t agree with Mr. Rachmans’ analyses because it is another elitist few and gives no answer to why those voters keep on voting the crooks in.

  2. Eurogroup President Juncker (Luxembourg) is the protector of the EU banksters. Luxembourg is the smallest country in the EU and has the biggest banking industry, with 202 large-sized banks.
    And the EU is not more than a undemocratic bureaucratic monster with 50.000 well paid accomplice most of them are lobbyists.
    They do not help or protect the people, wether in Greece nor in other countries.
    With the 110 10bn EU/IMF bailout the do not help Greece or the people of the country, they only make sure the banksters got their big profits without having any risks. French banks and second german banks of course also greek banks are the winner. And as everywhere in Europe, also in Greece the poor working class man is the looser.
    The EU fanatics are the helping hand of the financial mafia and the big players to to accumulate more and more money. And anon they help the EU to get more political power. That is the game.
    Money makes the EUdssr go round.
    Greece keep strong fight against the EUdssr austerity terrorisem
    The people of Europe are with you and count on you in the fight against the financial terror of the corrupt EU and IMF. Destroy the financial bank mafia and their apologets in the EUdssr and IWF.
    For free Greece and free Europe.
    I dont want wake up once mornig and the 4 Reich of the EUDSSR is knocking at my door.
    The more political power the EU gets the more their behavior becomes undemocratic. That is a fact.
    The EU Junta will take over the unconditional / absolute political power over the free countries of europe, step by step, successively. political power and financial power are going hand in hand in this process.
    The EU bank lobbyists are the same kind of people like the WorldBank / IMF blood suckers.
    The World Bank – IMF is owned and controlled by NM Rothschild and 30 to 40 of the wealthiest people in the world. For over 150 years they have planned to take the world over through money. The former chief economist of the World Bank, Joe Stiglitz, was fired recently. He pointed out to top executives that every country the IMF/World Bank got involved in ended up with a crashed economy, a destroyed government, and sometimes in flames with riots. Jim Wolfensen, the president of the World Bank would not comment on his dismissal.
    Look how the World Bank, IMF and WTO destroyed African agriculture!!

  3. “But Greece, as it stands, is a demoralised country that has lost the sense that it controls its own government. Leaving the euro might just be the beginning of a national regeneration.”

    Yes I agree, they can and will start over, but if the Constitution isn’t changed to provide for law enforcement, and prosecution of the law, provide for transparency, and most important, moderation and control of these wicked special protected interests “UNIONS” – the country will never change. It will be back to featherbedding, protectionism, special treatment – this has to change or the change to the drachma will not help the situation.

    I propose you get rid of the Parliament and go to the Presidential system that Turkey is considering. That was you get to vote for your president instead of having him imposed on you. You get to vote for your representatives and if he doesn’t perform – you throw the bum out. Not years and more years of the same old fakelo system. Time to change Greece

  4. For Jake: The presidential system will resolve nothinkg. Look at USA and it’s debt and corruption.