British Prime Minister Theresa May looks to passing by heads of government after the family photo at the informal EU summit in Salzburg, Austria, Thursday, Sept. 20, 2018.
The member states of the European Union seem unaware of the clouds that are gathering above their heads. They have identified the most serious problems of the EU, but are treating them with nonchalance, and fail to understand what the British secession (Brexit) implies. They are slowly sinking into a crisis which may only be resolved by violence.
The origin of the problem
During the dissolution of the Soviet Union, the members of the European Community accepted to bow to the decisions of the United States and to integrate the states of Central Europe, even though these states did not correspond in any way to the logical criteria of adhesion. With this momentum, they adopted the Maastricht Treaty, which transformed the European project of economic coordination between European States into that of a supra-national State. The idea was to create a vast political bloc which, under the military protection of the United States, was intended to engage with the USA on the road to prosperity. Continue reading →
The Euro has been around for almost 20 years. The Russian transfer ruble survived 25 years. As GEFIRA explains, the two currencies have something in common: they were and are not a success story…
The introduction of the transfer ruble was intended to enable free trade between the countries of the Eastern bloc. The creation of the common clearing system led to the exchange rates for the East German mark, zloty, forint, lev, and even the Mongolian tugrik being arbitrarily fixed by the Soviet Union, regardless of the purchasing power of the national currencies. In the 1960s, the Bulgarian lev was 20% undervalued and the Polish zloty about 45% overvalued. Since the transfer ruble was not yet convertible into Western currencies, it remained an illusion and a means by which the Soviet Union could enrich itself and save its budget at the expense of its satellite states: the Russians bought raw materials, goods, food for convertible currencies in the West and sold them to their “socialist friends” for transfer rubels. The international bank for economic cooperation, which sat in Moscow and handled all transactions in the transfer ruble, swept the real trade surpluses and deficits under the carpet. With the political change the common settlement currency came to to an end, and it turned out that the Soviet Union owed huge sums to its “brothers”. Continue reading →
PARIS/BERLIN (Own report) – Germany is participating in a new European military formation that was launched yesterday. Originally a French proposal, the European Intervention Initiative (EII) will be open to EU and Non-EU member countries to join. Expanding the existing EU military cooperation (“PESCO”) with a new operational component, the EII should facilitate rapid decisions on joint military interventions. A first meeting of military commanders from the hitherto nine participant states is set for September. The EII includes Great Britain, which plans to continue its military cooperation with the continent, even after Brexit, as well as Denmark. Since the coordination of military interventions is now officially set outside of the EU framework, Denmark can sidestep the opt-out from EU military policy, it had once granted its population. Referred to by experts as a European “coalition of the willing,” it goes hand in hand with the EU Commission’s militarization plans worth billions and the high-cost German-French arms projects.
The rise to government of Eurosceptic parties is the consequence of austerity policies made in the name of cleaner public finances and of the euro convergence criteria.
Two Eurosceptic forces are now governing Italy. On one hand the 5-Star Movement, the anti-system party of Luigi de Maio founded by the humorist Beppe Grillo. On the other, far-right xenophobic Liga led by Matteo Salvini. How could this have happened? How did one of the European Union’s six founding members, host of Treaty of Rome in 1957, and for a long time the EU’s most Europhile country, give a parliamentary majority to groups so hostile to European integration? Continue reading →
The alliance’s elites have come down with a case of civilizational cluelessness
On January 17, Petr Pavel, a Czech army general and NATO’s military committee chairman, led meetings with his counterparts from Ukraine and Georgia, which he tweeted were “Sessions dedicated to Projecting Stability.” Yet while NATO’s collaboration with nations historically intertwined with Russia could lead to a number of possible outcomes, “stability” seems the least likely one. Like so much of what the alliance does, the purpose of these meetings is to push the alliance ever eastward.
That raises a question. Why should Americans participate in an alliance in which a general—from a minuscule military power that spends 1 percent of its GDP on defense—hosts a meeting that is more likely to provoke a catastrophic U.S.-Russia war than to prevent one? As Ted Galen Carpenter recently explained here at TAC, this is the dangerous calculus that results from interlocking the United States with so many NATO nations, including some that Moscow regards as within its sphere of influence.
European leaders, spearheaded by Chancellor Helmut Kohl, yesterday hailed the results of the Maastricht summit as a great leap forward in an irreversible process of integration and played down concessions granted to John Major.
French and German politicians closed ranks to present Britain as the great loser of the 31 hours of intense negotiations on economic/monetary and political union while underlining to a sceptical public opinion that Britain would be forced to join in fully sooner or later.
But Dr Kohl’s euphoria about his success in imposing the German model of currency union was punctuated by open expressions of disappointment, not least within his own Christian Democratic Union, about the relatively meagre progress in establishing political union.
Quick reminder: “Bail-out” means the government bails the banks out, whereas “bail-in” means the citizens pick up the tab. Germany’s Fourth Reich is once again forcing its will upon the EU.
‘If I were a politician in Italy, I’d want my own currency as fast as possible: that is the only way to avoid going bankrupt,’ said German ‘Wise Man’
A new German plan to impose “haircuts” on holders of eurozone sovereign debt risks igniting an unstoppable European bond crisis and could force Italy and Spain to restore their own currencies, a top adviser to the German government has warned.
All signs point to an EU crumbling, however, do not take into account further integration among nations who are willing to stay in. For Europe, because of its own national security and the not-so-dependable NATO, it must and will remain together in some form or another due to the Russian threat next door. Perhaps in the future, to mitigate this threat, Russia might even join the EU bloc in one form or another. One thing is clear: The EU will burn down, but another state will rise out of its ashes: The United States of Europe.
COPENHAGEN/HELSINKI/LONDON/THE HAGUE (Own report) – Demands to halt EU expansion and even begin to scale it back are being raised in several northern and northwestern European countries. In last Thursday’s referendum, the Danish population rejected the proposal for Denmark to adopt EU domestic and judicial policies. Denmark will therefore retain its “opt-out,” obtained following its “No”-majority in a referendum on the Maastricht Treaty, in 1992. There is also little chance that Denmark will join a common EU foreign and military policy, in the near future, as favored by Berlin and Brussels. Because the single currency is perceived as the reason for Finland’s economic crisis, that country’s parliament will soon debate whether to hold a referendum on leaving the Euro zone. Great Britain will hold a referendum on exiting the EU by 2017, at the latest, with already a majority in favor, according to recent polls. In the Netherlands, demands are being raised to reduce the Schengen Zone to a “mini-Schengen.” Following the convulsions in Southern Europe, the EU project – the foundation of German global policy – is also beginning to crumble in the North. Continue reading →