Do nothing and die

Much has been made about the outcome of the EUnion ‘summit’ (EU council) last Wednesday and Thursday. The cheers in the MSM notwithstanding things may not be as happy as they seem. In his Sunday column Christopher Booker sees something entirely different: The EU has opted to do nothing and die.

And so, in two pages of impenetrable Euro-speak issued in Brussels in the small hours of Friday morning, we saw the great European dream visibly dying. The mountains heaved, to paraphrase Horace, and gave birth to a ridiculous mouse.

Bookers main thesis is that the only thing that could conceivably save the euro at this late stage is full political integration, something the euro was designed to help along.

Full political integration requires a new treaty, one to replace the Turnip Lisbon Treaty. This would trigger a number of referenda around the EUnion, for it would mean amendments to national constitutions enshrining the supreme character of a EUnion government. But faced with increasing resistance and distrust to the EUnion back home, the ‘colleagues’ at the last minute shied away from this risky leap into the dark. And thus, by doing nothing they’ve squandered the only viable opportunity to save the euro and consigned it to its death.

Much of what Booker writes is based on the invaluable analysis done by Dr. North, who summarizes it all in one handy post here. As early as Thursday, when the MSM were collectively cheering the fortunes of the euro and the ‘defeat’ of Germany by the PIIGS, Dr. North noted:

As to the history books, my guess is that when historians look for an event and dates to mark the beginning of the final collapse of the European Union, it will be the European Council of 28-29 June. Then, the “colleagues” failed to do the one thing that had a chance, albeit slender, of saving their precious project – committing to a new treaty. And they blew it.

The rest is noise.

Come Monday, the markets will undoubtedly have figured this out as well, in all likelihood wiping away the spectacular gains made just before the weekend.

And beyond Monday? Booker writes: Gazing into the bottomless pit of debt, the EU’s leaders can neither move forward into the future nor escape from the prison they have made for themselves by their errors of the past. They must hang there in the wind, until the inexorable logic of the markets brings them to a real crunch point, more fateful for all our futures than anything they have yet dared imagine.

Thus endeth the dream…

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5 Responses to Do nothing and die

  1. DP111 says:

    Its not over till it is over.

    This is going to drag on till the markets themselves sort it out for the EU. Will it be the end of the EU or the Euro? I doubt it. There is too much at stake, not just the money, but political interests. I doubt very much that the US, Russia or China want to see the EU unravel, and neithr do any of the EU countries.

    If the EU or the Euro is allowed to collapse, the wreckage will affect everyone – WTO, UN, GATT, and numerous other international agencies. The whole world trade system will fall into chaos. The political fallout will be such that no one can see or plan for the next decade. If a bank can be regarded as too big to fail, then the EU or Euro is far far too big to let fail.

    What I foresee is that the financial world, with help of major countries, will come to some accommodation regarding Spanish/Italian/Greek debt. I’m sure there are creative accountants who can see to that. There will be devaluations or something, but slowly and in a planned manner. The markets will go along, as they will have no choice, for they all sink or swim together.

    So why all the meetings ad nauseum. There is no plan other then to muddle along and keep kicking the ball into the future. It is the best strategy in the circumstances.

  2. DP111 says:

    Why do I get the feeling that we are being had. The politicians are playing games. Whether it is Merkel, Hollande, all the EU big whigs, Rompuy,Barroso, Mario, etal.

    They are having a grand time basking in the media spotlight. What more could a politician ask, as the media hang on their words day in and day out. This is paradise for a politician. Its not every day that faceless unelected EU commissioners, presidents of institutions we never heard of till recently such as the ESM or ECB, get a chance to play big time.

    Will anything come of all this? I doubt it. Will the Euro or the EU fall? I doubt it. There is too much at stake in Europe and internationally. I dont think America, China, Japan, Russia, or anyone else would like to see the EU/Euro collapse.

    All this will die down, and the markets will adjust to it.

    • DP111 says:

      PS

      The fall of the EU will come from some unexpected quarter, not the crisis that we have now. It will be sudden, therefore there will be no contingency plans to manage the fall.

  3. DP111 says:

    And the EU music continues.

    The EU is not going to fold. Well not in the near future.

    It will fold eventually, but then all things come to an end eventually.

  4. Klein Verzet says:

    Hi DP,

    Sorry to get back to you so late. It’s been (and still is) very busy earning a living🙂

    The EUnion *will* fall, and I agree that the economic ramifications will be massive. However, the economy will fail at some point anyway (if it’s not already doing so) because the current economic system of deficit spending has grown beyond its support limits.

    The economy won’t tank because the EUnion will fail. It is, I think, rather the other way around: The EUnion will fall because the economy is tanking. The EUnion construct is more or less sustainable only in fair economic weather. The current depression is exposing the fatal flaws in both the EUnion and its love baby, the common currency. If it finally fails, the end of the EUnion will be (quite fortunate) collateral damage of the depression.

    But you are right: We don’t really know what is happening, what is being concocted in the couloirs of Brussels. What we see on the nightly news is a play for the peanut gallery. The truth is kept closely guarded behind massive doors, armoured window pains and gaggles of security guards. Which is all the more reason to to get rid of the EUnion. That is no way to be governed.

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