The larger it gets the more bureaucrats and taxpayer money it needs! So it is that despite a protracted Europe wide financial revolution that comes in the form of an unprecedented sovereign debt crisis affecting not only those so easily drawn into joining the single currency but in its wake, sweeping up the rest of the European Union as well we once again hear renewed talk of reviving the dream of full EU political union.
Like a disease that will just not go away it seems that proponents of full political union would have all five hundred million inhabitants within the current twenty-seven member states – the rich and the poor, the weak and the strong all living under similar rules and one political roof. Will these guys never learn that Rome took over a century to build? Why is it that those that favour full EU political union cannot understand that while Maastrict might have marked the peak of EU ambitions the subsequent Treaty of Lisbon marked the beginnings of a protracted fall from grace! Why is that they fail to see that the views of many of the EU’s great institutions such as The European Commission, the European Parliament, the European Court of Justice and other appear to out of touch with the wider electorate. The same may well be true of many diehard EU Commissioners too! I wonder, what does one need to do to persuade political union protagonists that one stop policies on agriculture, fisheries, security, foreign policy and defence may no longer be either advisable or affordable.
Neither with no less than seventeen individual EU member states having joined the Euro and with each having many national problems to face let alone often having different economic cycles can it make any sense to be constrained on the basis of a single interest rate. Can these blinkered people not open their eyes and see the real devastation that their ill thought rushed out laws and ideals have done? Are they completely blind to the knowledge that the European Union is already not only too large and too cumbersome in terms of administration but also increasingly in the minds of the younger generation past its sell by date? Do they not understand that the one stop serves all currency that they persuaded so many to embrace a dozen or so years ago may in its present form already be living on borrowed time? The answer to all these points is apparently not! Indeed, like lambs to the slaughter it seems that no matter whatever lessons might be learned from the over zealous expansion of the EU there are those that believe EU wide regulatory control over national budgets, EU wide taxation policy and strategy, EU wide rules governing all public services and of most forms of welfare not only are still urgently required but that these should be pushed through with haste. Forgive them for they know not what damage they do!
Left to their own devices those that hold sway in the EU still appear to believe that no matter what mistakes have been made in the past political union can and still will be achieved within ten years. How sad – why on earth the hurry one may quite reasonably ask? In fact the answer if you really do want one can probably be found looking at the very deep-seated problems that now face the single currency. It is one that says without the promise of eventual political union it is increasingly probable that the Euro as single tier currency could well be doomed. Not yet mind you and there remains some scope for further experiment such as to try a two tier system with different rates.
For now though unless China really does come riding to the rescue of the troubled Euro based nations such as Spain and that might just provide a ‘get out of jail free card’ for some of those troubled by rising yields, higher borrowing costs and that are seeing the value of bonds sharply decline we are left to conclude that chances of the Euro surviving beyond the next three years in its present form are thin. No matter what, even if the Euro can manage to survive the crisis of confidence beyond three years in probably less than five years from now we should see a currency that might have a few less members not to mention by then this being a two-tier currency that carries with it two very different interest rate spreads and all the complications that would provide.
Greece, Ireland and Spain are but three EU member states that joined the single currency experiment right from the very start. Each of them benefited from vast financial resources that all of a sudden were made available. None it seems understood the pitfalls or even the simplest rules of supply and demand. Sadly they could see only expansion and growth and worse, while Greek and Irish governments spent far too much of the national cake Spain and Ireland failed to see that there economies were being governed by speculators. Each of these economies failed to a greater or lesser extent because quite simply they knew no better. Each had through too many previous decades lived with both economic and sometimes political pain. Can we really blame them that when the Euro injection finally came there should have been such universal relief ? No but we can blame those in authority of the Euro meaning EU lawmakers and those charged with running the European Central Bank that allowed so much cheap money to be printed. The golden rule is that for every boom there will at some point always be a bust. Having allowed themselves to be swept away on a something for nothing magic carpet that said sustainable economic growth was around the corner all three nations are today saddled with vast national debt and oversized government deficit. Each of these nations and other EU member states too such as Portugal, Italy and even the UK find themselves in various states of economic misery and disarray. Who knows who might be next knocking the door for even more of all that newly printed money made available through the European Stability Fund and whose very existence affects each and every one of us as taxpayers?
If all this sounds harsh it is I suppose only because with all the benefit of hindsight one recognises now that had the EU better overseen the single currency that it had so menacingly rushed to conceive, had it laid down more secure foundations and disciplined rules that must at all cost be observed and had it more effectively and properly policed rules on the size of national deficit as opposed to turning a blind eye to the one stop ‘do as I say not as I do’ nationalistic ideals of some then perhaps we may not be staring at the sovereign debt crisis mayhem that we are now. But we are staring at the problem and it is one that clearly is not easily about to go away! Indeed, had the EU observed history, had it recognised that with so many diverse cultures involved that to secure real free trade even amongst a group of like minded states combined with maybe some partial economic union would take maybe one hundred years to achieve as opposed to just a third of that number perhaps things might look very different today. Indeed, perhaps if those that believed they had the right to be the true lawmakers of the EU had stopped to think and maybe understand what over-fast expansion of the EU might do and had seen the light then we just might have been able to look at Brussels today in a completely different light. But we cannot do that and even worse is that we already know that a vast and fast increasing number of voters spread across many EU member states now believe that its lawmakers have failed.
