Monday, May 24, 2010

Crisis in Europe: Chaos or Centralized Power?

Christopher Booker offers good insight into the meaning of the economic crisis in Europe in an article in the Daily Telegraph entitled: "The euro crisis is a judgment on the great lie of 'Europe'" He writes:

Easily the most telling statement by any politician last week was that from an anguished Angela Merkel, in pronouncing that "the current crisis facing the euro is the biggest test Europe has faced for decades, even since the Treaty of Rome was signed in 1957". "If the euro fails," she went on, "Europe fails," warning that the consequences for the whole of Europe would be "incalculable".

We have still scarcely begun to wake up to the gravity of the crisis now upon us, not just for the eurozone but also for us here in Britain and for the entire global economy. The measures so far taken to prop up the collapsing euro, such as that famous "$1 trillion package", are no more than gestures.

Greece was just the antipasto: Italy, Spain, Portugal and others are now hanging over an abyss of debt which scarcely all the money in Europe could fill – created by countries living way beyond their means, thanks not least to the euro's low interest rates. The only possible consequence of the collapse of one of the world's leading currencies, leaving Europe with no money to trade in, would be utter chaos. What we are witnessing here is a judgment on the entire deceitful and self-deceiving way in which the "European project" has been assembled over the past 53 years. One of the most important things to understand about that project is that it has only ever had one real agenda. Everything it has done has been directed to one ultimate goal, full political and economic integration.

. . . snip . . .

As was advised by Sir Donald MacDougall's report to Brussels in 1978, it could only work if, following the US model, between 20 and 25 per cent of Europe's GDP was available to such a government, to enable a huge transfer of wealth from richer countries such as Germany to the poorer, more backward countries of southern Europe – and how ironically has that come about!

. . . snip . . .

f the euro does disintegrate, as Mrs Merkel warns, the consequences would be incalculable. Replacing all the national currencies was a gargantuan task, by far the most ambitious ever attempted in the name of European integration, and there is no Plan B. Without a currency, trade would collapse – leaving Britain, dependent on Europe for 50 per cent of its trade, just as seriously affected as everyone else. A system failure on this scale would make the 1930s pale into insignficance.

Inevitably, cries went up last week for the EU to be transformed into a proper economic government with control over national budgets and the power to raise taxes – exactly
what MacDougall and others were talking about in the 1970s. But it is too late, and all that remains are desperate gestures.

Read the rest here.

To say that Booker is pessimistic is an understatement and that is bad news for everyone. The crisis (whether it has been manufactured or is genuinely spontaneous) is pushing people toward fear of chaos. Eventually the idea of a highly-centralized government largely insulated from the voters will become "thinkable" and then "necessary." We may be witnessing history.

Aldous Huxley looks more prescient all the time. If you haven't read Brave New World, you might want to check it out. It is like reading the newspapers from 2020.

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