Mr Delors told colleagues that any crisis would be a “beneficial crisis”, allowing the EU to break down resistance to fiscal federalism, and to accumulate fresh power. The purpose of EMU was political, not economic, so the objections of economists could happily be disregarded. Once the currency was in existence, EU states would have give up national sovereignty to make it work over time. It would lead ineluctably to the Monnet dream of a fully-fledged EU state. Bring the crisis on.
But then, somebody forgot to let the crisis in on the secret:
Behind this gamble, of course, was the assumption that any crisis could be contained at a tolerable cost once the imbalances of EMU’s one-size-fits-none monetary system had already reached catastrophic levels, and once the credit bubbles of Club Med and Ireland had collapsed. It assumed too that Germany, The Netherlands, and Finland would ultimately – under much protest – agree to foot the bill for a ‘Transferunion’.Posted by Cjunk at November 17, 2010 7:16 PM
Economies will always fluctuate; but it takes government " help " to transform a downturn into a truly horrific, hope-destroying, set-us-all-back 10 years abyss.
Posted by: small c conservative at November 17, 2010 8:08 PMWell i have no idea what is going on in europe these day's
I was wondering if there is someone who could explain this article to me?
Are they saying the E.U. could literally dissolve?
Would that not be a wonderful thing ?
Anyway any insight would be appreciated.
Posted by: paul in calgary at November 17, 2010 8:34 PMWhat the EU needs is an infusion of fresh blood. Can we donate to them the state of California to help out? The state employees support this and look forward to adding Euro style vacation allotments to their benefits.
Posted by: GP at November 17, 2010 8:44 PMi can remember barbara amiel predicting this very thing 5 yrs ago...in macleans...
as though one needed baba to make the potential result legit...
Posted by: john begley at November 17, 2010 9:22 PMpaul in calgary;
"Are they saying the E.U. could literally dissolve?"
That pretty much sums it up I'd say. Given what Germany, the biggest economy over there, has been saying in the last year or so, I think it doubtful that they'll step up to the plate to bail out a neighbour that craters economicly. German people were none too pleased earlier this year when Greece needed help. Germans were asking, understandably, why should we who have to work to age 65 before retirement have to float Greeks who retire at age 60. A very good question.
Beyond whether Germany would be of a mind to help, it's questionable to me that they'd even be able to if things get as bad in Europe as I think they will. They're in serious @ss sh*t over there.
Posted by: bob c at November 17, 2010 9:27 PMAs I understand it the article is about how a crisis - like the current financial crisis - would as predicted cause member states to become even more dependent on, and hence cede more of their sovereignty to, the EU central government in Brussels. That is, if the stronger economies like Germany don't mind paying the debt of the irresponsible ones, and if weeker ones like Greece don't mind taking orders from their creditors.
This was a political gamble that ignored economics. Rather than help strengthen the super-state, the crisis may cause it instead to break apart. That's what I get from it, and it seems reasonable.
Posted by: JDN at November 17, 2010 9:31 PMOne world government is a failed concept in Europe. It won't be long before Angela Merkel goes back to the Deutschmark.
Posted by: Aizlynne at November 17, 2010 9:41 PMYou mean this scenario didn't come up when when the Eurozone regulators were determining the proper number of pickles in a liter jar and the acceptable curvature of bananas?If you can't trust them with the entire economy do you think they got the number of pickles right?
Posted by: Arty at November 17, 2010 10:01 PMAizlynne
[.........One world government is a failed concept in Europe. It won't be long before Angela Merkel goes back to the Deutschmark.........]
Yeah it's sorta like Spain's "Green Economy" being a model.....a wonderful way to experiment with the concepts without putting our eggs in the basket....we have enough problems with the US economy run by Obozo, Pelosi, Reid and Frank....advised by the idiots at the NYT.
Posted by: sasquatch at November 18, 2010 12:01 AM