Sunday, December 4, 2011

Europe - Political Union ? or Killing Democracy to limit Bank Losses ?

Below are some important & interesting reads assessing the situation:

Jacques Delors - father of the Euro ...

Lowry Excerpt

There is a European Parliament, but not one with the powers or role of a proper democratic parliament. It can’t initiate legislation. It has no governing or opposition party. It can’t topple the government with a vote of no confidence. It is the unelected European Commission that initiates legislation and issues regulations. By some estimates, about half the new laws in EU states are drafted in Brussels.

This diminution in national sovereignty has been accomplished without worrying over-much what the peoples of EU countries want. Referenda on big further steps toward integration have generally been avoided. As Teddy Roosevelt shot back when an aide recommended he inform the Senate of a secret agreement with Japan, “Why invite the expression of views with which we may not agree?” Although there are elections to the European Parliament, no one pays attention to them, and their results reflect the standing of national political parties that fight on the basis of national, not EU, issues.

The recent cashiering of the prime ministers of Greece and Italy, who were replaced by a former vice president of the European Central Bank and a former EU commissioner, respectively, captured the undemocratic thrust of the European project. It was a technocratic coup forecasting how the laggards of the EU will come to be governed by Brussels — and essentially Germany and France — in a new fiscal union.

If Germany is paying the bills, shouldn’t it call the shots? But it shouldn’t be paying the bills for the follies of foreign countries or calling the shots. Greeks should be governed by Athens, no matter how dreary and dysfunctional this time-tested arrangement might strike Berlin.

The European elite claims that a reinvigoration of the nation-state will again risk war. Nonsense. Democratic nation-states didn’t precipitate World War II, the totalitarian ideology of Nazi Germany did. Are we supposed to believe that without the glue of the euro, Angela Merkel’s Germany would again roll Panzers across Nicolas Sarkozy’s France? Even without the EU, Europe would still be bound by trade, NATO and a mutual commitment to international norms.

DeLors excerpt:

Mr Delors claims that the current crisis stems from “a fault in execution” by the political leaders who oversaw the euro in its early days. Leaders chose to turn a blind eye to the fundamental weaknesses and imbalances of member states’ economies, he says.

“The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he says.

The euro came into existence without strong central powers to stop members running up unsustainable debts, an omission that led to the current crisis. Now that the excessive borrowing of countries such as Greece and Italy has brought the eurozone to the brink of disaster, Mr Delors insists that all European countries must share the blame for the crisis. “Everyone must examine their consciences,” he says.

However, he singles out Germany for its strict insistence that the European Central Bank must not support debt-stricken members for fear of fuelling inflation. The euro’s troubles spring from “a combination of the stubbornness of the Germanic idea of monetary control and the absence of a clear vision from all the other countries”.

Famous in Britain for his public clashes with Baroness Thatcher in the 1980s over closer European integration, Mr Delors says that he shares some of the concerns that were expressed by British politicians and economists about the euro before its creation.

When “Anglo-Saxons” said that a single central bank and currency without a single state would be inherently unstable, “they had a point”, he admits.

Because Britain is not in the euro, it is not “sharing the burden”, Mr Delors says. However, he claims that the UK is “just as embarrassed as the Europeans by the financial crisis”, not least because some of the measures put in place to deal with the crisis pose a threat to British interests.

For example, he says, the creation of a common “Eurobond” underwritten by all eurozone governments and traded in Paris and Frankfurt would be a “big worry” for the City of London. “I can see Mr Cameron’s worries,” he says.

Such is the scale of the crisis, he warns, that “even Germany” will struggle to find a solution. “Markets are markets. They are now bedevilled by uncertainty.”

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