Friday, 18 May 2012
Let the euro die.
Last night, Robert Preston presenting ‘The Great Euro Crash‘ seemed about to deliver a surprise for the BBC [who are usually in favour of our EU membership], until the last 10 minutes. Based on the content of the program, the expectation was that he would end by giving a very strong recommendation that we should leave of the EU. However, this was not to be – instead he insisted that we should remain members.
What he did do, however, was to endorse Peter Oborne’s view, in an article in theTelegraph earlier in the week, that the primary purpose of the euro was political. In his words ‘the over-riding purpose was, beyond question, political. The founding fathers of the eurozone were determined to use the single currency to promote political union. By doing this, they hoped to domesticate Germany, which had caused such chaos and devastation across the continent during the first half of the 20th century’.
Preston went to some lengths to demonstrate that this political union was not only the purpose of the euro, but also of the EU itself. The founding fathers believed that the union would prevent Germany starting another war in Europe, if there were political union, and this was the intention from the start – the introduction of the euro was simply another step on this path.
It was also a highly speculative venture insofar as never before had a currency been introduced without political union and a central bank that together exercised financial controls over the entire economy using the currency. Germany now is of course trying to fulfil that role, but it cannot do so directly, it has to instead, as we are seeing now, use every threat available to crush any resistance to the financial controls it has put in place.
Although it is understandable that, following WW2, politicians were very eager to avoid another war, but what has happened since, with regard to the development of weaponry, seems to have been overlooked.
The US and the Soviet Union reached a point where they realised that each side could wipe out the other many times over, which gave birth to the concept of MAD – mutually assured destruction. As a result the two nations came to an agreement to limit the number of weapons each had – to avoid a continuing stockpiling and the consequential drain on their economies.
Both Britain and the France had developed a nuclear arsenal by 1960, if the concern was that Germany might start a third war in Europe, this could have been achieved by using the nuclear deterrent as has been done so effectively with other counties in the meantime.
It can only be assumed that the political class, within the EU nations, wanted this project for another reason, as Preston explained – they wanted to remain a world power, something none of them could do alone, but might do together. Also, in the process, they have removed virtually all traces of democracy which allows them to pass any laws they wish, without fear of the people removing them from office.
Based on this desire the EU leaders have led their nations on a reckless path that has ended up in the ‘Euro Crisis’. Fear of the break up of the EU has been ratcheted up to, initially, terrify the Greeks – so that they will fall in line with the negotiated austerity program, but also to terrify the people of the other EU nations, particularly those of the states whose people are rebelling against the cuts they are having to endure.
No doubt the belief is that, if the Greeks can be brought to heel, there is little likelihood that any of the other nations will step out of line in the future and the project can be completed. As a result the EU will, in time, become a single entity, run by Germany and based on German efficiency.
Arguably this is a better way to reach a Europe dominated by Germany – than through war. However, it can hardly be argued that Germany has been ‘domesticated’!
The major hurdle to this outcome is that if the Greeks will not agree to continue with the austerity despite all of the pressure put on them. If the Greeks succeed in obtaining a far more agreeable package, this will lead to austerity being challenged in most of the other eurozone nations.
If the Greeks will not back down and there is no alternative but to expel them from the eurozone, this is an even greater threat to completing the EU project of ever closer union and to the political class. For if they do succeed in recovering economically, without too much suffering, it will lead to most of the eurozone nations, who are experiencing great difficulty in living with austerity, to follow the Greek’s example and leave the eurozone.
Great care is being taken by Angela Merkel to make sure that neither of these are the outcome. For either would mean that the planned european super-state will not be achieved – at least in the foreseeable future.