Saturday, December 10, 2011

What the European Union is really about

The economic situation in Europe appears complicated. Just when you think you know what's going on, you may be surprised. Reading about the events in Europe I have been despairing, but have not been surprised. EU struggles was what originally gave me the idea of 'Suicide Pact'.

I submit to you that the test for any basic assumption or premise lies in its explanatory and predictive power. That is to say, only principles which are consistent with the past experience, and continually bear themselves out going forward, are sound. Here are a few such basic statements about 'Europe', by which I predominantly mean the EU. Despite this being a gross generalization, here are my three assumptions. Europe is:

1. Covetous of power
2. Willing to lie/is based on lies
3. Failing/dysfunctional

A brief elaboration:
1. POWER. The EU project was initiated shortly after the war as a way to keep peace, but only gained traction in the 80's and finally gained steam in the '90's from the desire to be an economic and political equal (read counterweight) of the US. The EU project is about power, and the elites were willing to subject their people to the trouble of ratification of EU treaties 'until they get it right'. Of course, everyone was assured it would not infringe on national sovereignty. Really, how could it not? The reality bears this point out, but need to surrender national sovereignty for unification was entirely ignored. The real question is did the geniuses who came up with the EU project not think it through at all, or did they simply not mention the risks to the masses? Are those in charge of this project utterly incompetent or deceitful? Generally, people in charge are low on scruples, not brains.

2. LIES. The first point contains the germs of the second. The treaty was built upon deception. And it was maintained through deception. The attempted rescue of Greece, occurring for mover 18 months has not succeeded in resolving the fundamental issues, merely buying time for Greeks to implement austerity. The gains are ephemeral, but the loss of sovereignty of both Greece and Germany is apparent. Furthermore, the solution is based on a great lie. The fundamental problem is not merely the overspending of cheating Greek officials. This is not uniformly the case in Ireland, Portugal, Spain and Italy. The larger issue is difference is exports, which previously were accounted for by adjustments of infidel currencies, with correspondingly lower cost of living in Greece than in Germany. Equalizing the costs of living, such as the price of a cup of coffee across EU in absence of equality of trade, inevitably leads to imbalances, which were initially financed by borrowing and covered up by lies.

The idea that austerity alone, or in combination with stricter rules, as Angela Merker wishes to do, could solve EU's problems, stemming from trade imbalances, is a lie. It is a convenient lie for the stronger, and an inevitable lie for the weaker partners. Greece is facing bankruptcy in weeks to days, if it fails to please its EU masters, so it had little choice. George Papandreou, the Greek PM, gallantly fell on his sword after his proposal to send the EU deal for ratification by the people frightened the EU and he resigned on November 9th. Technocratic government is unlikely to do much better, however, and austerity is proving very harsh, and very unpopular in Greece, so PM's sacrifice is unlikely to have lasting benefit. The Greeks receive their assistance with reluctance, and have already threatened to renege on the deal, which many people feel is unfair and unjust. In a Western society that emphasizes fairness of outcomes, rather than the process, this charge may get plenty of traction and prove hard to dispel. Germany of course, is being made to foot the bill, and seeing its own borrowing costs rise as a result, that's bad for Germans and bad for business. The elites, however, are increasing their power, which has been so marginalized after WWII.

3. FAILURE. Unfortunately, however appealing massive transfers of wealth may be to the leaders of Greece and Germany (for separate selfish reasons), it is a strategy which leads to less economic opportunity for both countries, because of joblessness and taxation, respectively, as well as loss of sovereignty.

This is where I see a big bang coming. Europe is already imploding economically and they still have to face two additional crises related to demographics - aging of the native population, and poorly assimilated and costly foreigners. Combine the abject failure with the lies, and you have a potential for great strife. The true culprits and multiculturalists, and moral relativists and their ilk, liberals have besmirched that good name and now like to call themselves progressives. Despite both Merkel's and Sarkozy’s pronouncements that multiculturalism has failed and is dead, it is still the dominant philosophy in Europe. A few speeches even by important people merely express common-sense skepticism, but do not provide an alternative.

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