Saturday, December 10, 2011

Fiscal mess in the EU

I am going to write a few comments about a bit of history of the slow-motion train wreck going on in Europe, going backward.

What are we to make of the latest development - Cameron's veto of new EU rules? You can read about the reaction of the Germans here.

The bottom line is that Mercozy (that's Merkel + Sarkozy, hence, plural) need to maintain the appearance of progress, and the best way to do that is to promise structural changes that would accompany a new set of laws for EU. Cameron tried to obtain guarantees of special privileges for the financial hub of London - over a million well-paying jobs in finance could be at stake.

Understandably, the French and Germans balked at this special treatment. Now, they are threatening to go forward alone.

One Brussels insider warned: "This is going to cost the UK dearly. They have antagonized everyone."
Mrs. Merkel complained: "I really don't believe Mr. Cameron was ever really with us at the table."
Others said, "It was a mistake to admit the British into the European Union."

There were even reports that the fuming Frenchman had to be "restrained" at one point. Mr. Sarkozy likened Mr. Cameron to "a man who wants to go to a wife-swapping party without taking his own wife", a strange analogy that would probably only occur to a Frenchman, perhaps it explains his hot-headedness.
"We are going to be a satellite on the edge of what is going to be an economic superpower. We need a different relationship", fretted the Liberal MPs. Deputy PM, Nick Clegg, warned Britain could end up marginalized in a two-speed Europe, where approximately half of the population is sceptical of the EU:
Foreign minister, William Hague, dismissed concerns about two-speed Europe: "No one should assume the Eurozone moves at a faster speed than the United Kingdom."

David Cameron's veto is completely consistent with the covetous nature of the European Union. It was initially founded on the assumption that unification will automatically bring prosperity. The events of the last couple of years belie this naive hope. The actions of the British reveal their motivation and attitude towards the EU - count us in, if there's a financial incentive, guaranteed by special privileges. This is why a senior Eurosceptic David Davis can describe the demand for special treatment as "utterly reasonable." The goal of making more money through unification has not changed, but the belief the unification per se can bring prosperity is clearly undermined; it seems all EU is capable of doing is averaging growth by massive transfers of wealth.

The patchwork assembly that impedes EU will be fatally exacerbated by introduction of multiple layers of treaties, because it will undermine egalitarianism, which is the sole justification capable of legitimizing any union, to replace it with a covetous oligarchy, where each nation grabs food from the common bowl according to its ability.

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