I am not being facetious or sarcastic here. The European debt crisis is a crisis of monumental, historic proportion. But not in the way it is generally perceived. Whatever happens tomorrow, whatever deal is struck (if there is a deal), we can be bet on of going one of two ways: Either the EUnion will come up with something (economically) sufficient, or it will not.
If the latter the crisis of solvency will in Europe will descend into series of ‘unstructured’ defaults. Possibly including a break up of the euro-zone as member states like Germany, Holland and Finland take leave of the single currency. If the former, the can will have been kicked down the road, without solving the core problem that ails Europe at the moment. But we will have lost any chance of reconquering sovereignty, and indeed any meaningful form of democracy. As we wrote earlier, the choice is now between being poorer, but free, or being a serf that is very much poorer.
On this side of the aisle there is a measure of optimism, in the sense that whatever is decided, political difference between Germany and France (most notably) will ensure an outcome that is a lame duck, will not convince the markets, will be the equivalent of pouring blood into the coastal waters of South Africa, where the jumping-jack Great Whites roam. Additionally, there is the ever more persistent rumour that Germany is secretly printing Deutsch Marks in preparation of a pull out of the euro.
I’d like to, but I don’t share that optimism. The debate in the Bundestag today, and especially the contribution of Frau ‘the goal is a stability union’ Merkel doesn’t even begin to hint at Germans planning mischief, alas. Rather, it is witness to an ideologically blinkered faith, an article of faith, that the euro is sine qua non for a functioning continent. That without the euro, Europe will descend into a chaotic mess of war, poverty and deprivation it never knew in its history.
Having followed the EUnions ascension to a fully fledged one-party state over the last five years, what I fear most is this: The gravity of the situation is hyped up to such an extent that national politicians (longs since having take leave of being national leaders) will think they can get away with accepting any solution to this crisis. Up to and including a new palace coup that will cement the EUnion and plunge us into a fiscal and political union (I mean, what else do we understand to be a ‘stability union’?). If anything, the EUnion is brilliant at conjuring up a ‘solution’, like a rabbit from a magicians top hat, that will somehow or other further increase the power of the unelected and unelectable cabal making up the EUnions leadership. It may well be that we will wake up tomorrow, to find we have been given over, by our national political elites, to the whims of Barosso, Van Rompuy and whoever the super-commissioner for budgetary affairs (as proposed by our very own PM, Mark Rutte, the Dutch definition of a europlastic) is going to be.
Maybe I am overly pessimistic. Dr. North seems to think so, tracking the ‘decline and fall’ of the European project. In all likelihood Dr. North is more right then I am. But even then, I fear the damage that our so-called leaders will do to us, our savings and our livelihoods before they concede defeat. This is not a happy story. This really is a crisis.
Below I’ve put some links that shed a little light on the feasibility (or not) of ‘leveraging’ the EFSF, as is being talked about in Brussels as I write this. It is now a little past midnight. What will the morrow bring?
[UPDATE001] Ambrose Evans-Pritchard gives us the verdict:
So, EMU break-up is Verboten, fiscal union is Verboten, full mobilization of the ECB – either to lift the South off the reefs through reflation, or to back-stop the system as a lender-of-last resort – is Verboten. Germany will have none of it.
Instead we have the summit conclusions – EUCO 116/11 of October 27 2011 – and a great deal of coercion. Please tell me what exactly has been solved.
The Slog and his Bankfurt Mole are even more succinct: The deal heralded throughout the European press today can now be revealed as a content-free sham cobbled together at the last moment
Makes you wonder what the heads of state said for goodbyes. “See you in a week or two”?