European Union – A bureaucratic fantasy doomed from inception
“European Union – A lopsided bureaucratic fantasy doomed from inception, thus the demise of Euro is inevitable”
I have two analyses to support the above premise: one is based on political history of Europe and EU, in the context of the history of human civilisation; and the other is based on pure economic realities. Unfortunately, both analyses indicate inevitable demise of both EU and Euro.
1. Analysis based on history
EU concept was conceived and implemented lopsided. History tells us that successful economic unions only follow political and fiscal unions, and in that order; and successful political unions were invariably driven by conquerors (not bureaucrats), and were sustained by their political skills with support of military might.
This is particularly relevant for Europe, which was politically very fractious all along its history, compared to other parts of the world. In recent time only Napoleon and Hitler had attempted political union of Europe, which we know, were very short lived and failed miserably. Lenin and Stalin’s Soviet Union was a more successful political union and lasted much longer, but invariably its demise came with the decline of political power of the Soviet Communist Party (irrespective of whatever socio/economic and global factors may have caused that).
Now, from that premise, to save the ill conceived EU, it has to have an effective political union like the USA. And like the USA, a sustainable political union is likely to involve internal civil wars (more than one is likely in Europe). And, under the current situation, all these have to happen very quickly.
Does anyone still think or hope that European leaders will come together and capable of doing whatever it takes to save the single currency? OR
Does anyone know of any European political leader (politically/militarily like Napoleon, Hitler, Lenin or Stalin) or political force (Nazi party, Communist Party) in present day Europe who are capable of bringing about an effective political union?
2. Analysis based on economic realities
Most media and commentators still appear to see the EU crisis as a mere debt crisis or second stage of the global financial crisis, which were apparently caused by unsound expenditures beyond one’s means. It is all focussed on the past.
However, I think while debt and past is part of the problem, real problem lies in the lack of confidence about the prospect of EU’s future economic growth. If there were viable growth prospect for most of the EU countries, with growing tax revenues and expenditure austerity measures, the debt crisis may have been manageable. But, instead EU is facing a long economic decline; almost in a situation of an unemployed person with a huge debt burden and ever increasing expenditures. It is this bleak prospect, which will eventually force the better performing EU economies to opt for bailing themselves out: either they will force the defaulting countries to leave EU or they themselves will choose to leave EU.
Link: https://www.economist.com/users/moin-ahsan/comments
Moin Ahsan
Sydney, Australia
6 January 2012
