Europe on the brink of catastrophe 0

Germany and France drove the creation of the European Union (EU). Both wanted to be part of a vaster, more powerful political entity: Germany in order, forlornly, to dissolve its national guilt in it; and France, pathetically, to rival the power of the United States with it. Neither hope has been fulfilled. The EU is a failure.

What is the EU? It’s a conglomerate of disparate nations, run by unelected bureaucrats. It has a parliament with no power worth having.

How could it have been expected to succeed? It doesn’t even have a common language. Every document “of major public importance or interest” has to be translated into every one of its 23 official languages.

Imagine the cost of that alone. Bill Bryson wrote (in his book Mother Tongue) that way back in 1987, when the inchoate union was called the European Economic Community (EEC) –

An internal survey found that it was costing $25 a word, $500 dollars a page, to translate all its documents. One in every three employees of the European Community is engaged in translating papers and speeches. A third of all administrative costs – $700 million in 1987 – was taken up with paying for translators and interpreters. Every time a member is added [to the original 6], as most recently with Greece, Spain, and Portugal, the translation problems multiply exponentially.

There are now 27 member states, prices have risen steeply, and in any case no one knows how much the EU pays for anything. Its costs are never accurately calculated.

Because it is irredeemably corrupt, its accounts cannot be cleared. Despairing auditors who turned whistle-blower have been sacked and abused. Officials riding the  gravy-train grow rich on fraud.

Now its nemesis has caught up with it. The 16 member states that adopted the euro as their currency  are not at ease with one another. Their socialist policies are bankrupting them as they were bound to do. Greece has been temporarily saved from economic death by the rest of the EU (and also by the IMF, to which American tax-payers contribute the most). But the peoples, especially the Germans who’ve been made to fork out the bulk of the EU contribution, resent having to do it. (Recent elections in Germany’s most populous state of North Rhine-Westphalia indicate that voters are angry with the federal government’s decision to help Greece and “defend the Euro”.)

The dream of a United States of Europe was always an impossible one. The attempt to realize it is a nightmare.

George Will writes:

The EU has a flag no one salutes, an anthem no one sings, a president no one can name, a parliament (in Strasbourg) no one other than its members wants to have power (which must subtract from the powers of national legislatures), a capital (Brussels) of coagulated bureaucracy no one admires or controls, a currency that presupposes what neither does nor should nor soon will exist (a European central government), and rules of fiscal behavior that no member has been penalized for ignoring. The euro currency both presupposes and promotes a fiction — that “Europe” has somehow become, against the wishes of most Europeans, a political rather than a merely geographic expression.

The designs of the paper euros, introduced in 2002, proclaim a utopian aspiration… The bills depict nonexistent windows, gateways and bridges. They are from … nowhere, which is what “utopia” means… [The euro] is an attempt to erase nationalities and subsume politics in economics in order to escape from European history.

The euro pleases dispirited people for whom European history is not Chartres and Shakespeare but the Holocaust and the Somme. The euro expresses cultural despair.

It also presupposes something else nonexistent. The word “democracy” incorporates the Greek demos — people. As the recent rampages of Greece’s demos, and the reciprocated disdain of Germany’s demos, demonstrate, Europe remains a continent of distinct and unaffectionate peoples. There is no “European people” united by common mores.

Even the Financial Times – which is pink in color politically as well as literally – warned on May 14 that “displays of anger” in the member states may “become more widespread”,  and that “a Europe hounded [sic] by market forces has acted too late” with sudden desperate programs of austerity to save itself from economic catastrophe.

The Euro will fall further. The EU itself may fall apart. That at least, to our mind, is an eventuality devoutly to be wished.

The end of the welfare state? 0

Most west European governments have known for the last thirty years at least that it is impossible to maintain the welfare state. None has had the courage to start dismantling it. No matter what party was in power, whether outrightly socialist or nominally conservative, each successive government tried only to postpone the day of reckoning.

It seems that day has now arrived.

Vasko Kohlmayer writes at Front Page about the eurozone’s ‘skyrocketing debt’ and its likely consequences:

The European Monetary Union lays down strict regulations … The so-called Stability and Growth Pact requires each country’s to hold down its annual budget deficit below 3 percent of gross domestic product (GDP). The Pact also stipulates that any member’s public debt is not to exceed 60 percent of GDP.

This year only one eurozone country is expected to have a budget deficit that falls within the three percent limit. The rest will go over, most by a large margin. Germany, which was the country that lobbied most rigorously for the strict fiscal requirements, was among the first to break them. Greece is currently the leading offender with a deficit that equals 12.7 percent of its GDP. But the figures are generally abysmal throughout the monetary union. Ireland’s deficit, for example, is 11.5 percent, Spain’s 11.4 percent, Portugal’s 9.3 percent.

As far as public debt is concerned the average European ratio is 88% of GDP, nearly 50 percent above the “allowable” limit. The worst offender is Italy whose public debt stands at an astounding 127 percent GDP. Greece’s debt is 113 percent, Belgium’s 105 percent, Germany’s nearly 80 percent. High as these figures are, the reality is probably worse as EU countries routinely use an assortment of accounting tricks to understate their deficits and obligations.

It is becoming increasingly obvious that if the euro is to continue as a viable currency, eurozone states must take decisive measures bring their finances under control. This, however, appears to be a nearly impossible task. Greece shows us why. Shortly after the government announced a package of budget cuts and tax increases the country’s civil servants took part in a nation-wide strike. Plans are afoot for another one next month. At the same time, Greece’s umbrella private sector union is planning an extensive walk-out for the last week of February. The Associated Press observed that the Greek government “may find that unions and voters push back against cutbacks that will take years to show results. With a potential public backlash, their chance to win approval for such measures remains unclear.”

Memories are still fresh of the protests that took place early last year. Angry at cuts in their subsidies, Greek farmers blocked major roads and paralyzed the country. Parts of the nation were thrown into chaos as lines of vehicles stretched for 12 miles or more. Unable to restore order, the prime minister was forced to beg the farmers to remove the roadblocks. “There is an urgent need to free up the roads. A whole society cannot be held hostage,” he pleaded.

This time around far more substantial steps must be taken in order to put Greece’s fiscal house in order. This is certainly not going to sit well with the Greek public and there is fear that things could deteriorate in dramatic fashion. …

The Eurozone … faces a seemingly unsolvable conundrum. Even though it is steeped deeply in debt, almost every serious effort to curtail spending meets with popular rage. The problem is that they cannot have it both ways. It is impossible to have a large welfare state and a sound fiscal house at the same time. It is either one or the other.

Until recently the euro was considered a possible alternative to the dollar as the world’s reserve currency. It was thought that the Monetary Union’s strict guidelines would safeguard its debasement. But it turns out that the Union’s respect for its founding documents is only paper deep. It is now becoming apparent that the disregard will have dire consequences. It may even bring about the break up of the eurozone and the demise of what once seemed like a solid currency.

Given that the United States is taking the same path of unrestrained spending, we would do well to take heed and learn from Europe’s painful lessons.

*NOTE: The eurozone is not the same as the European Union (EU). The European Union has twenty seven members as of this year. The eurozone is made up of those countries within the European Union that use the euro as their sole currency. The eurozone currently has sixteen member states.

The crisis may cause the break-up of the eurozone. Undesirable as this may be for economic reasons, one highly desirable political consequence could be the end of the welfare state as such, with the proof of its unsustainability so incontrovertible that no one – not even Barack Obama – would attempt to resurrect it.

The welfare state pays people not to work, not to produce, not to innovate, not to marry, not to have children – or if they do, not to take care of them themselves.

It may be that the peoples of Europe are dwindling away (which they are) because they have no incentive to beget children and strive to raise them. Or to put it another way, they may be dying out because they have nothing to go on living for.

Posted under Commentary, Europe, Socialism, United States by Jillian Becker on Friday, February 19, 2010

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