Friday, November 11, 2011

THE EU AND THE EUROZONE


Well, here is that bugger Simon Jenkins, once again articulating brilliantly what I think and have always thought about the EU and the euro. Emphases are mine.


I could have given you just the link but reproducing the whole article makes it easier for you to read it. And permits the emphases.


This is the way the world ends, not with a bang but a cliche. Crisis spirals out of control and Armageddon moves to the brink of abyss. "Europe" is too big to fail yet too big to succeed. Each newscast is a crash course in economics, each headline an incitement to suicide. But since we are not at war and few understand what is going on, the rest cannot believe it. As if watching the fall of Icarus, they sense the gods are angry but return quietly to the plough.
This week the European backwash of the crash of 2008 moved way beyond high finance. Economics may have pushed politics to the wall, but in Greece, Italy and, more important, Germany, politics is hitting back, hard. Yelling, spitting and choking with frustration, it has had enough of economics, and has beaten it to the ground. Yesterday it claimed its first scalp, demanding a new ruler of Greece.
There is no point in European Union acolytes loftily opining that "it was a pity" Greece was admitted to the euro. It was more than a pity, it was a crime. There is no point in bewailing the reluctance of Germans to bail out Greeks or Latins, or let their bankers print billions of cash. There is no point in hectoring or dreaming. A 50-year fiction is over. As often before in history, a new Europe must be built on the ruins of the old, and we had better get used to it.
It is a massive irony that old Europe's last gasp should be to seek the very outcome it sought in the 1950s to avoid, German supremacy. The one thing on which I agree with my colleague, Timothy Garton Ash, on Comment is free yesterday, is that "if the eurozone is saved, it will be as a fiscal union on largely German terms". Substitute the word political for fiscal, as honesty dictates, and we are back to the ghoulish first half of the 20th century. European union is always on someone's "terms", and they rarely have much to do with consent.
There is one difference today. Garton Ash may want "the kind of budget, debt and wage discipline [Germany] has practised with such impressive results over the last decade, and now seeks for the whole eurozone". It may be "precisely what Europe needs". But what Europe needs does not embrace the enforcement of what Germany would like to see.
We might have said the same of the British empire in its heyday, that British discipline was "what the peoples of India and Africa" needed. We could mow them down when they disagreed. Germany has no Panzer divisions, nor does it desire to dominate Europe politically, and without that desire there is no means of enforcement. The implied German supremacism of the EU's last-ditchers, under the euphemism of "fiscal union", is archaic, elitist, dangerous and mercifully impossible.
The paradox is that this impossibility is to the credit of the postwar European movement itself. It has achieved what it set out to do, to liberate the nations of Europe from fear of German overlord-ship. This liberation has allowed France to walk proud, Britain to enjoy semi-detachment, Scandinavia to think for itself and middle Europe to breathe free. The EU lobby may have cobbled together institutions for a united states of Europe, but it was a fool's errand, and one that could only play into the hands of German revanchism.
The tragedy is that the chosen vehicle of European union should have been a common currency. This ostensibly innocent tool is a weapon of mass economic destruction. It has imposed its clammy grip on divergent national economies, forcing hundreds of thousands of workers and their families to flee the "overvalued" countries of east and south Europe to seek work in the north. Others were kept at home only by government jobs funded by reckless foreign indebtedness. The reason was not just the fixing of the value of the euro to the Deutschmark, but the fixing of any weak currencies inflexibly to stronger ones. The resource cost of the euro over the past two decades must have been stupendous.
A common currency as a means of imposing wage or fiscal discipline on uncompetitive states is a crude economic sanction. As with all sanctions, it corrupts and distorts domestic politics and makes electorates hostile to external pressure. To Eurocrats this hostility, like democracy itself, is a little local difficulty. But sooner or later, push comes to shove. Greeks and Italians are toppling leaders who fail to listen to them, and voters in Germany are threatening likewise. European political union, the universalist dream of visionaries, has met its Waterloo.
Some confederacies have worked, such as the US, India and the United Kingdom (so far). But the EU was always a confection of elitist diplomacy, supported by Europe's peoples only for as long as they thought it would bring them money. It sought to craft a political entity from cultures whose differences have defied Hapsburgs, Bourbons, Napoleon and Hitler alike. Political union is a discredited orthodoxy and its advocates should retreat gracefully.
The sensible route forward is not underpinning the euro at some new and temporary frontier, and "kicking the can down the street". It is for those states that sincerely wish to merge their political institutions with their neighbours – there must be precious few – to find common ground within the euro.
Countries in southern Europe must recover their economic separateness and their political souls, writing off debts and devaluing their currencies, as Britain has done. Then Europe can find a new equilibrium. Metaphors of "two-speed" Europe, inner and outer clubs, and trains or planes being missed are meaningless. Nicolas Sarkozy and Angela Merkel are right, as is David Cameron. A new and more flexible constitution for Europe is blatantly needed.
This constitution will be easier to define than to engineer. It must somehow retain the (overrated) gains of free trade, but accept that there will be many unlevel playing fields. The German Reichstag or Bundesbank cannot legislate for Greek labour laws, Italian opening hours or British tax havens. The currencies of less competitive states must float. The lash of devaluation and domestic austerity is one thing when self-imposed. When edicts emanate from unaccountable foreign agencies, as now in Greece and Italy, it is not. There could be no more disastrous last chapter to this sorry saga than the crude imposition of German "discipline" on the weaker members of the EU. Who would enforce it?
Europe is a continent, not a panacea. It can no longer be seen as an ideological construct, whose adherents treat all challenge as an offence against infallibility. Historically, its strength has been its diversity, a high street not a hypermarket of nationalisms. Each time a centralised power has denied this and struggled to impose "union", the outcome has been catastrophe, followed by the need to restore and reassert the sovereignty of nations. This time round, the catastrophe has remained economic. It could yet be a near-run thing.

14 comments:

Ferrolano said...

The “massive irony that old Europe sought to avoid” is more poignant if we remember this day in 1918 was when we were determining how much to fine you and what can we take from you for starting this war. And then in 1945 it was what can we put into your economy to rebuild your country – I guess that now the boot is on the other foot and we all need fining for having spent more than we have and then how much can they put into our countries to rebuild our economies… The real irony is that in less than one hundred years, they have been totally busted twice and each time they have come right back – are we missing something?

Candide said...

Quite an anti-German bias here. Reichstag is the building, not the institution. And that's just symptomatic.

Colin said...

Candide, I don't see that. Can you expand?

Candide said...

Colin, I actually can not, because after re-reading I have to realise that I was wrong.

There is no such bias, instead there are parts I should have read more carefully.

Which makes the Reichstag a simple metonomy.

My bad, sorry.

(And as if the meigas wanted to ridicule me further, the verification word I now have to type is "intel".)

Candide said...

*metonymy* Gosh!

Colin said...

Many thanks for your integrity, Candide. But I had to look up metonomy.

Noun:
The substitution of the name of an attribute or adjunct for that of the thing meant, for example suit for business executive.

Laughed at your word verification experience!

Candide said...

Happy to brighten up your day. And you looked what up exactly?

Colin said...

Metonomy

Candide said...

Ok, now I'm baffled. So I did not have to correct "metonomy" with "metonymy"?

Colin said...

Had to look up Metonymy as well . . .

A figure of speech in which one word or phrase is substituted for another with which it is closely associated (such as "crown" for "royalty").

Metonymy is also the rhetorical strategy of describing something indirectly by referring to things around it, such as describing someone's clothing to characterize the individual. Adjective: metonymic.

Candide said...

Colin, man, metonomy is the most frequent way of misspelling metonymy.

Or not?

I'm not the native speaker here and I'm about to go insane.

(Verification word this time: "craven". I kid you not.)

Colin said...

Dunno. Both words are new to me and the respective definitions are slightly different. Nuances??? Apparently not. As you say, a common misspelling.

If you search for metonomy in Wiki, you get metonymy/metronomy . . .

But, to muddy the waters further . . . from Wiki
Metonymy or Metronomy

Candide said...

I give up! Not all doubts have to be cleared, always.

I don't want to steal any more of your time.

Have a nice evening, Colin!

Colin said...

And you, Candide. Cheers.

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