By Francis Lee for the Saker Blog
From its inception the European Union was an ambitious strategy to build an economic bloc which would serve as a counter-weight to the US’s global economic dominance. (1) One of the primary conditions of this overall construction involved the creation of a single strong currency, the euro, that could become the rival to the US$. This was not just a political question, it also involved financial, economic and possibly even geopolitical dimensions. The Germans in particular were involved in the EU blueprint ever since the initial Treaty of Rome or EEC Treaty, as it was called, brought about the creation of the European Economic Community (the EEC). The treaty was signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands and (West) Germany, and it came into force on 1 January 1958. At the outset Germany was on board the launch and prepared to give up her much beloved Deutschmark (DM) in order to eventually adopt the euro. A European super-state was envisioned complete with its own currency and act as a counterweight to the US Leviathan.
EXORBITANT PRIVILEGE
Since the end of the Bretton Woods system in 1971 the US dollar had become the global currency – a pure fiat currency without any gold backing – and had been used widely and routinely by other states as international reserves; as monies circulating in the dollarized countries; and as a means of payment in international trade. Ever since the US had allowed its currency to float freely the US trade balance has been negative. Surplus European countries, but which also included Japan, had earned US dollars which at one time had only been redeemable in gold payments by the US. But this arrangement ended when Nixon took the dollar off the gold standard in August 1971. From this time on the surplus countries could only swap their dollars for US Treasury Bills, that is to say, American debt.
In this way the US has appropriated real goods and services from the surplus countries and exported debt back to those same countries.
In the trade this is called seigniorage.
‘’This term was used to describe the right of the medieval lord, or seigneur, to coin money and keep for himself some of the precious metals from which it was made. About $500 billion of US currency circulated outside of the United States, for which foreigners have had to provide the United States with $500 billion for real goods and services.’’ (2) This was an exchange of real value as embodied in goods and services, for fictitious value contained in little green paper substitutes. Nice little racket. Who says you can’t get something for nothing! This didn’t go down at all well in the European mainland and was described by the French politician Valery Giscard D’Estaing as being an ‘exorbitant privilege’. Monsieur D’Estaing certainly had a point.
The evolution of the euro has emerged as the only real challenger to the US$’s seigniorage. The preconditions to any such challenge rested on a dual criteria: The euro had to represent a real currency on the same scale as that of the United States, and, in addition, it had to be a strong currency, it needed to be strong even at its design stage. The birth-pangs of the euro underwent a long pregnancy, and it was not until 1999 that the EU monetary authorities announced the birth of the new currency. It should be pointed out that not every country in the European Union was/is a member of this currency union; some countries kept their own national currencies – e.g. the UK, Sweden, Denmark, and most of Eastern Europe, and that remains the case even today.
Germany was of course the key player in this process. The euro was to be a hard Teutonic currency which mirrored Germany’s powerful position as a globally competitive manufacturing base. It was envisioned that the euro currency would be extended to other parts of the eurozone. (3) However, the euro was unwisely broadened to include peripheral countries which were far from the levels of productivity – and thus of international competitiveness – needed to contribute to making the euro a strong currency. This was particularly the case in Europe’s southern periphery. These nations simply could not compete with Germany since their unit costs were too high and productivity levels were lower than Germany’s (and for the rest of the northern European bloc). Moreover, the get-out-of-jail ‘solution’ by Greece, Spain, Ireland, Portugal, and the Baltics, of a currency devaluation was closed since these states were all members of the Eurozone who had abandoned their old currencies and now used the euro.
In passing it could be argued that devaluation is not necessarily an optimal economic policy. Certainly, devaluation makes exports cheaper, and provides a breathing space for indebted states; but the obverse side of this practise is that it also makes imports more expensive. Imports which include strategic commodities such as oil, foodstuffs, drinks and tobacco, motor vehicles, chemicals, machinery and transport equipment, mineral fuels, and lubricants. The rise in prices in these imported goods and services may well lead to imported cost-push inflation.
Thus Europe’s southern periphery attempted to skirt around the devaluation problem with what became known as a policy of internal devaluation. This involved engineered austerity, whereby a country seeks to regain competitiveness through lowering wage costs and increasing productivity and not reducing the external value of the exchange rate. This enforced policy has resulted in what can only be described as a disaster as country after country in the southern bloc clocked up larger and larger trade deficits whilst the North European bloc including both members and non-members of the euro, e.g., Sweden and Denmark, clocked up big trade surpluses with the Eurozone in the southern periphery. In any case Germany had pre-empted this internal depreciation by its own earlier competitive devaluation as contained in the Hartz reforms.(4)
TRANSITION STATES
Things were not much better on the Eastern periphery. Present current growth figures for Czech Republic 0% Poland -0.1% Croatia N/A Hungary 0-1% Bulgaria -1.6% and Romania -4.4% all struggle with trade deficits.
At some stage during the 1990s, it became common to refer to these Eastern European countries as “transition states” or the ‘New Europe’ an interesting description by Donald Rumsfeld (See below).This implied an optimistic future, a linear progression, a transformation from a failed communist past to a stable western European future. Surely one of the most obvious lessons from the financial crisis and recession of recent years, however, is that the idea of such a transition is misplaced. If the societies of central-eastern Europe are indeed in transition, the mode of transit is that of the covered trailer, haphazardly attached to a juggernaut, driven by remote political and economic forces. And it is very unclear what the destination will be, given the continued economic upheavals and displacement across the whole of Europe.
The result of the transition so far seems to have been the creation of a low-wage hinterland, a border economy on the fringes of the highly developed European core, and this has had wider political and social ramifications for the entire European project – in effect shifting the goalposts of what it means to be European.
It is worth pointing out that, as is always the case, not everyone lost out. Shock therapy had its domestic supporters, people entranced by the ideas of neoclassical and Hayekian economics. Sometimes this was based on genuine intellectual engagement, as neoliberal western economists gained fervent followers in the universities and colleges of Warsaw, Prague, Bucharest, and Budapest. More often, however, the new disciples of neoliberalism were cynical converts from communism, the prospectors of a new capitalist order. Through incorporation into western institutions, such as NATO/EU, some of the new capitalists hoped to entrench their situations as the primary political arbitrators, a new elite of western-influenced reformers. All very reminiscent of the Yeltsin years. (5)
THE US INTERVENTION
US Defence Secretary Donald Rumsfeld’s ‘New Europe’ involved a geopolitical incorporation whereby the ex-soviet republics, and Warsaw Bloc allies were enrolled into the EU and more importantly were brought into NATO. Membership of the NATO was mandatory for all new EU entrants. Rumsfeld opined that “You’re thinking of Europe as Germany and France. I don’t. I think that’s ‘old Europe … If you look at the entire NATO Europe today, the centre of gravity is shifting to the East. And there are a lot of new members. And if you just take the list of all the members of NATO and all of those who have been invited in recently — what is it, 26, something like that? [But] you’re right. Germany has been a problem, and France has been a problem.”
If this was not a blatant intrusion into European affairs I stand to be corrected. This was the creation of a geopolitical beach-head militarily primed and ready to go; its purpose was to prevent any modus vivendi crystallising between Europe as a whole, and, in particular Russia. Central to this strategy …
‘’There was an overarching strategic concept of sorts in the double enlargement – strategic and economic – it was a strategy for Americanising the social structures of Europe within the NATO security perimeter whilst Americanising the hinterland beyond the perimeter. Firstly the Central European and Eastern Countries (CEECs) have become and will continue to be a significant middle-class market for western multinationals grabbing market share there at will, using the Single Market Rules embodied in the European Agreements to legitimise their market domination. Secondly, the CEECs will offer a limitless supply of cheap labour for western multinationals to use for the labour-intensive parts of the production circuits. Thirdly these attractions will be used by big capital in Western Europe to threaten to exit eastwards unless Western Europe Americanises its labour markets and turns the welfare state into minimal safety nets and allows British and American levels of social inequality, poverty, urban decay, and prison populations. Western Europe will then be distinguishable from the USA only by the virulence of its internal racist, neo-fascist, and xenophobic movements. (6)
WITHER GERMANY?
At the present time and at the beginning of a new and even bigger crisis in the global economy the future of the EU depends on the interests of the different factions of the German ruling elite. This is nowhere better instanced than in the Nordstream-2 episode. One faction, German big business, which has extensive investment in Russia together with other financially strong countries wants to reorientate its long-term strategies seeking an expansion of Germany toward China and Russia. There are several reasons for this;
‘’Firstly Both Russia and China have immense resources and reserves of raw materials. Secondly, the level of China’s economic growth and the size of its market are way above those of the EU. Thirdly, Germany’s technological superiority is the ideal condition for intra-trade appropriation of Chinese surplus value. Fourthly, if bi-lateral trade relations were to continue at the current pace Beijing will become Germany’s main trading partner by 2021. Fifthly, for China, Germany is the European state with the most optimal investment opportunities; China is the second largest non-European investor in Germany after the United States. Finally, China’s ultimately likely goal is to lessen US influence in Europe by forging its own close ties to the EU – and Germany is China’s strategic foothold in Europe. These are ideal conditions for German expansionism to scale down its interests in Europe and redirecting its attention to the East.’’(7)
The other faction in Germany are the geriatric Atlanticists, political, security (BND) and military elites, with the Greens in tow of course, who are apparently still fixedly stuck in an Americo-centric NATO bloc not knowing which way the wind is blowing and on which side their bread is buttered. The Nordstream-2 issue is crystallising these fault-lines among the German ruling elites with Frau Merkel being pulled hither and yon between Germany’s reactionaries and its more forward-looking business class which is enamoured of the pro-China-Russia siren songs. Moreover, given the centrifugal drift within the Eurozone there seems sufficient reason to believe that a new bloc of northern European states, grouped around Germany, Holland, Scandinavia, and possibly including the Tax Havens of Switzerland, Luxembourg, and Liechtenstein, could coalesce around the establishment of a new Northern Euro. This delinking from the ‘weak’ euro by the Northern bloc could well be the strategy that Germany, that is to say, its business elite, pushes – or at least does not oppose – the default of the weaker countries in the south and the east so that they leave the Eurozone.
At the present time this is conjecture, but the slow but inexorable economic and geopolitical underground shifts make change inevitable.
NOTES
(1) It should be noted in passing that this was never intended to take on the contours of a European geopolitical alternative to the American continental hegemon. That came later. At the time there was a school of thought that held the creation of a European alliance to act as a third force based upon social-democratic and unaligned neutrality which would act as a buffer between US imperialism and Russian communism, and as an alternative to the two heavily armed super-states. Alas that was not to be. The collapse of the Soviet Union was regarded in Anglo-American right-wing circles and their euro proxies – the UK, Poland, and the Baltics – as a wonderful opportunity to punish and over-run the prostrate and weakened Russian state. It almost succeeded as an enlarged NATO gobbled up ex-soviet republics pushing right up to Russia’s western borders.
(2) Barry Eichengreen – Exorbitant Privilege 2018 – pps3/4
(3) The Eurozone is composed of 19 out of 27 European States. The following use the euro as their currency: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Portugal, Slovakia, Slovenia, Spain
(4) The Hartz Reforms. These reforms involved the restructuring of Germany’s internal labour markets involving a lowering of labour costs and introducing ‘mini’ jobs wage and welfare cuts. So the reduced share of unemployed in the German work-force was achieved at the expense of the real incomes as those in work. Fear of low benefits if you became unemployed, along with the threat of moving businesses abroad into the rest of the Eurozone or Eastern Europe, combined to force German workers to accept exceptionally low wage increases whilst capitalists reaped an excessively big profit expansion. Real wages in Germany have fallen during the Eurozone era and are now below the level of 1999. This whilst real GDP per capita has risen nearly 30%.
(5) The accession states of Eastern Europe are simply an entrenched euro version of a US/Mexico periphery grouping on the border of the US southern states. These maquiladoras have certain tax advantages which make them attractive to US businesses. These US businesses can capitalize on a cheaper labor force in Mexico and also receive the benefits of doing business in the U.S. The presence of maquiladoras contributed significantly to the industrialization of the Mexican-American border.
(6) Peter Gowan – The Global Gamble – p.317.
(7) Guglielmo Carchadi – From Crisis of Surplus Value to Crisis of the Euro – A Global Analysis of Marx’s Law of Profitability. – p.419
“From its inception the European Union was an ambitious strategy to build an economic bloc which would serve as a counter-weight to the US’s global economic dominance”. This is absolute nonsense. The EU was created by Anglo-American bankers, where the aim was to curtail the sovereign status of sovereign European states. The EU is in fact a copy of the American Federation, where both entities have central banks run by private bankers.
In 1989 Germany was on the road to reunification. Both the US and UK try to prevent this. They fail. After that they present Germany with a covert ultimatum: they will recognize German reunification on condition Germany accept the euro. Once the news became known, a heap of German university professors started protesting, knowing what the game was, namely Germany agreeing to losing it’s sovereign financial status. Germany agrees to the Anglo-American demand.
And today, what do we have ? Analysts are split in their opinions. Some claim that Germany wants a full split with both NATO and the EU, while others claim that Germany wants a full split with NATO only, while at the same time reorganizing the EU, which would only include northern countries, free of southern members.
About eight years ago analysts divulged the fact that Germany was covertly reprinting the German Mark, secretly stockpiling it. Obviously preparations are being made for something.
And the future ? On the one hand we have Anglo-American Atlantic powers, while on the other hand we have continental powers. Both London and Washington are anti-Russian, supporting NATO and wishing to see Russia broken up and plundered. The last thing both want is a German-Russian economic alliance, or Germany joining the Euro-Asian Economic Union. Neocon Joe Biden will see to that, or try to see to it.
On the other hand we have Germany, the chief economic power on the continent. Time will tell if it will go it alone, leaving the EU, or if it will reform the EU by expelling it’s southern members. There is one thing it cannot discard, and that is Russia. Yes, it would just love if it’s “Drag Nacht Osten” policy, in it’s traditional form, could succeed. However, it knows perfectly well that this policy belongs to the history books, as Russia has returned to its natural status of a world power. It will have no choice but to accept Russia as an equal partner. We shall then see how the Anglo-American powers will respond.
Agreed to all of your comment especially
“From its inception the European Union was an ambitious strategy to build an economic bloc which would serve as a counter-weight to the US’s global economic dominance”
Yes, this is really laughable how can he write such a nonsense here in this blog where 99 % of the readers understand why the EU was really created
I also choked a bit on that first sentence. After all, there were several articles at UK’s Telegraph on how the EU was a project initiated by US’ invisible establishment.
https://www.telegraph.co.uk/business/2016/04/27/the-european-union-always-was-a-cia-project-as-brexiteers-discov/
Is it possible, however, that both statements are true? Many players were involved in the project, and it is conceivable that each could have had different – even contradictory – motives (hoping to outwit or outlast the other?).
The rest of the article rings true. In that context, I want to highlight the plight of a small country, Slovakia, which is currently in the middle of an opaque power struggle (with not a word in the western press). A prime minister, suspected of leaning east a bit too much, was removed in 2018, on the heels of a color revolution, started right after two as-yet unsolved murders – a young journalist and his GF. Like on cue, protests of young (deluded) people started, with signs in English, calling for PM’s removal.
Last year, an election brought to power a coalition of most incompetent, amateurish bozos. Not even a year in power, a referendum is being prepared to call early elections – that is how bad they are. And yet… they act with impunity that suggests to me someone very strong is behind them.
There have been arrests of prominent people (even the richest person in the country), judges, entrepreneurs… the former chief of police (who not that long ago had been promoted to a general by prez Kiska (lived in the US in 1990s)), was arrested for “corruption,” based on testimony of three people, who themselves are being investigated for corruption (and who would receive lower sentences as a result of this testimony).
Lo and behold, the general gets an eye injury within a few days of incarceration (why was he even in prison, and far away from family?) – “attempted suicide,” they said. Three weeks later, he’s found dead (lots of murky details in between). “Suicide” is the verdict before any investigation started (the way it supposedly happened reminds of the epstein case).
There was then an “attempted suicide” by an imprisoned politician, and yesterday, another successful “suicide” – of one of the three people who originally accused the police chief of “corruption” (I put it in quot. marks, because the chief is well known for having defeated – often risking his life – mafia in Central Slovakia in the 1990s and then another horrendous mafioso in 2000s).
Very dark times have descended on this tiny country. The subsequent political chaos clearly suits someone. And yet, not a peep in the W. press – nothing to see here, move along.
Of all the eastern states, Slovaks are “notorious” for being favorably inclined toward Russia (at least many are) – so it would not be surprising to find that they must be destroyed (or something like that).
Economically, with four large, foreign car manufacturers, Slovakia is steered by Germany, and is the epitome of a post-colonial colony – providing cheap labor and an export market (the once highly developed and 100% self-sufficient agri/food production sector had been destroyed in early 1990s, and now has to import 60-70% of its food, mainly from Germany).
The foreign-funded press stokes anti-Russia and China propaganda, and continues to hound the previous PM (he’s now in the parliament). They are trying to get him, no doubt about it.
In the meantime, the new govt. is pursuing a very strange reform of the justice/legal system, buying arms from the US and Israel, as the economy collapses bec of endless lock-downs (and no help from govt.). (Protests in Dec. were met with water cannons.)
In other words, a primer on how to destroy a country, society…
Wow! If the southern Euro zone detaches, it will fall right into China’s arms.
germany in a world of hurt
the low (or negative) ROI on south & east europe
(helped by brexit – one less contributor to the joined EU budget)
makes it a necessity to cut those countries loose
main headache for germany is how to keep them as a market
and not loose them to oceania(usa+uk+canada) or euroasia(china+russia+iran+turkey)
and i dont think they will succeed, german products will have to compete
with products from oceania and euroasia
politically those countries will be lost to germany – core EU
what interests me most is what will germany – core EU have to offer as exports
to China – that already isnt made under licence in german factories in china
Oceania products? Like financial instruments and complex and not that reliable weaponry, expensive to no ends.
The Ocenia is demonstrably not economically competitive.
“The Ocenia is demonstrably not economically competitive.”
…..and Western Europe is?
Excellent article. However, I would like to address devaluation which was touched on in this article. The big money bankers (Wall Street, London, Frankfort etc) and their bureaucratic lapdogs always tell us devaluation is so, so good for us. If supposedly helps exports and other such propaganda. But we never hear about the tremendous downsides, number one being that every working man and woman is given a pay cut. Also retirees who worked hard all their lives and had to pay into government pension schemes are also suddenly given a pension cut.
The price of everything goes up and the government bureaucrats give pension recipients a few crumbs not equal to even 10% of what the devaluation cost them. Poor working people who tried to save a little for a rainy day suddenly find that the government cost them most of their savings. If a poor working slob is lucky enough to have a few investments that kept up with the devaluation caused inflation, he finds that the increase in value due to inflation is now taxable. So the government gets more and the people at the bottom get screwed again.
Then there are the bankers, mostly Jewish, who get tremendous bail outs that cover any negative effects of devaluation. And not only cover the bank losses, but also give a ten fold increase over and above the losses. Then the banks give their top executives billion dollar bonuses. And the executives say they deserve the bonuses, because after all, it was their lobbying efforts that got the government to give them the tremendous bail outs. And the beat goes on, and on, and on, and on some more.
I don’t understand the obsession with GDP growth numbers. Wealth is a relative measure, an ability to purchase products of other people’s labour. When developing countries are getting rich, developed countries are getting poorer, there is no way to reverse this trend, attempts to do so are the main cause of western aggressive policies. What can be fixed, is internal inequality in developed countries.
BF So American Bankers created the EU. I beg to differ. I think that the European Iron and Steel Community (EISC) is seen by many as the start of the process that ultimately led to the European Union. The European Iron and Steel Community was proposed by Robert Schuman and Jean Monet and came into being in 1951. By 1950, many parts of war torn Western Europe had many a good recovery from the devastating impact of World War Two. The primary reason for this recovery was the money provided to Western Europe by the Marshall Plan. Marshall believed that a financially and economically secure Western Europe would not fall to communism and that the region would become a major trading partner with America. Marshall’s optimism for Western Europe was not fully shared by many in France. There was a general feeling in France that the region would still once again be dominated by West Germany if the right opportunities occurred. Therefore, there was a chance of West Germany threatening France once more in the future.
Schuman and Monet set about to find a way of tying France and West Germany closer together so that the very thought of one threatening the other receded into the past. They proposed that the iron and steel industries of Western Europe should be linked under a “Common High Authority in an organisation open to all other countries.”
There had been some economic co-operation between Germany and France before World War Two and there was a desire to restore this after the war.
France had a very good economic reason for putting her weight behind the project as West Germany’s coal and steel production was rapidly expanding. What was to become the EISC gave France a lever into this growth. The political climate of the time did not allow West Germany to dominate any new organisation and the only country that could fill this role was France. The French rightly gauged that the United Kingdom would not join an organisation that required any member to effectively hand over control of their iron and steel industry to an external body.
While the UK wanted to maintain its own grip on its iron and steel industries, this was not so in mainland Western Europe. Italy, the Netherlands, Belgium and Luxemburg all saw the value of greater European integration if future conflict was to be eradicated. These nations joined the discussions and in 1951 the Treaty of Paris was signed.
If you want to drill deeper into the history of the formation of the EU, I suggest you read Joseph P. Farrell’s ‘The Third Way, The Nazi International, European Union and Corporate Fascism.”
In it he traces what he asserts is the influence of the “Madrid Circular,” a document circulated in 1950 by the German Geopolitical Center in Madrid which outlines a plan to create what looks remarkably like what was actually created in the following decades: a cartelized EU industrial sector ruled by an unelected bureaucracy accompanied by an elected parliament with no actual power. The legal structures were anticipated by Germans in the 1940s who continued to hold high office after the war and sat at the table drafting the structure underpinning the EU.
The whole EEC / EU idea has been flawed from the outset because Europe is a bunch of tribes who have over the centuries have at war with each other – and the UK would never, particularly in monetary terms, get involved by abandoning the pound. The cultural divide also exists too with different mindsets in each country.
It was a in effect another Nazis type idea.
And squabbles over this or that issue, plus the fact most voters and member Govts in EU resent bureaucrats in Brussels and the EU Parliament and leaders determining things, renders it destined to fail.
They defrauded the Dutch into joining when they voted against it.
The reason it never will work because unlike the US, which a melting pot into one uniform mold, you wont ever get that in the EU.
If the EU is to remain in some form some changes need to take place including a series of EU Euro currencies – Euro 1, Euro 2, Euro 3 & Euro 4 – with each being worth 5% less that the previous – so as to enable struggling EU countries like Greece to have some competitive advantage with a devalued currency (ir would use Euro 4.
Unification of Europe has been around since the Napoleonic era
Unification of Europe has been around since the Roman era! And the elites still think it will work? It’s no error that the founding treaty of the EU is called “The Treaty of Rome”. Every time an attempt is made to unify Europe, the Roman Empire is dragged back up, as if that was successful!
How could Germany have been ready to give up its “beloved“ D-Mark from outset since it had only become convertible in 1957 the year the Rome Treaty was signed ?
The Werner Plan for a Single Currency was 1972 which was near time USA forced Germany to revalue the vastly undervalued D-Mark
Germans only gave up D-Mark in 1991 in order to preserve trade surpluses by setting an undervalued D-Mark/Euro exchange rate of 1.95 to stop Italy devaluing for advantage
The UK, France, and Russia were opposed to German reunification, but the US under Reagan wasn’t. In fact, Reagan brokered the deal the let them accept reunification. This included no NATO in the former Warsaw bloc, but that was quickly ditched.
I forget the source, but some economist has argued that a country with an international reserve currency must run deficits in order to provide liquidity for international trade. Were the country attempt to run a trade surplus, it would collapse world trade. China and Germany strongly depend on American deficits, so their currencies cannot be reserve currencies.
Germany will not abandon her historical allies, Austria, Hungary, Slovenia and Croatia and perhaps the Czech Republic.
The US favored the EU initially as a project to unite the European countries against the Soviet Union. However, the logic still applies. It is the logic of layered democracy. For most Europeans Brussels is far away, they know very little about it, their press hardly reports about it and they have no idea how they could influence it. And that opens the door widely for all kinds of lobbying – including by the US.
Sure, for some time the EU had dreams of becoming an industrial power. Remember the G3 mobile phone standard – a triumph for EU industrial policy. But that is the past. Nowadays the EU leaders have drunk the neoliberal kool-aid. There are still some European industrial projects but they are almost invisible. The present-day crown jewel of EU politics is the Erasmus student exchange program. Nice, but without ambition.
For uniting countries you need a dream/goal. “Alle menschen werden Brüder” is not enough. And that ideal has always been economic power. And we hear about a market of 450 million inhabitants and how – if we just remove all remaining protectionist barriers – our big companies will become world powers and we all will profit. And of course the US – the world’s main economic power – is in that context often mentioned as competitor.
With industrial policy becoming a taboo the accent has shifted to social engineering. The Erasmus program is one example. The euro currency another. It is part of many policies that aim to reduce the power of the national governments. The dream of many eurocrats still is the “ever closer union” – what reminds me always of a noose.
Social engineering is tricky. And grabbing power when you have no clue what you want to do with it is a recipe for stagnation. And so we have now a union that is kept alive by a central bank creating money. Splitting the eurozone would be both a risky enterprise and a defeat for the europhiles. And so the EU keeps crawling forward – hoping that time will be bring a solution and fearing that the longer it waits the bigger the problem can become.