The European Union has proven to be a work in progress now in danger of unraveling and crashing in flames. When rats are contemplating leaving a sinking ship why would any country try to get on board?
In the aftermath of the Second World War, with the Marshall Plan just beginning to have effect, the European Coal and Steel Community was established in 1951. The goal was to harmonize the production of commodities, coal and steel, the engines of Europe’s industrial countries, and prevent trade wars which could unravel the bleak peace that prevailed at the time of the Cold War. The establishment of the European Economic Community in 1958 was a further response to the Warsaw Pact threat.
The EU grew willy-nilly, haphazardly, on an ad hoc basis, by the accretion of common institutions over time, the Court of Justice, the European Parliament, the Central Bank etc., etc., etc. ad naseum, finally culminating in the Maastricht Treaty in 1972 providing for a common currency, the Euro, debuting in 1999.
In tandem, in blind lock step, NATO morphed from a defense pact devised to protect Western Europe into a vast powerful military-industrial complex designed to ensure that Europe’s war and aerospace industries would be sustained and supported by the taxpayers of the member countries. The actual cost to Europe’s taxpayers was bearable since the United States assumed more than its fair share.
Initially the Euro sounded like a good idea, a common currency that knew no borders. But its framework had major flaws. It did not compensate for the inequality of the economies of the several member states. While it did provide for criteria that each individual member state’s economy had to meet, those requirements were ignored. In fact most countries, Greece and Italy included fudged and falsified relevant data. It lacked central control and did not address the inevitable time when a single or several economies would experience a recession or depression and would have to bail out, a sovereign default.
The Euro could well be the straw that broke the EU’s back, so why would anyone want to join the EU?
The Spanish economy, the fourth-largest in Europe, is in desperate straits and today is the EU’s biggest liability. As a result of a lack of control by the Banco de España, the central National Bank, in collusion with corrupt politicians, real estate entrepreneurs, would be airport moguls, Royals [the Duke of Palma, King Juan Carlos’ son-in-law], hucksters all out for a quick buck, were a recipe for disaster.
“It is often hard to perceive an economic crisis. Debt doesn’t look like much. It has no shape or smell. But over time, it leaves a mark. In Spain, it manifested itself, first as empty buildings, stillborn projects, and idled machines. The Country is now a museum of doomed developments – a white-elephant safari. Vacant villas and towers glut the coasts and ring cities and towns. The hundred-mile drive along the Costa del Sol, from Málaga to Tarifa, suggests a fireless apocalypse – abandoned housing estates and apartment blocks, golf-links Serengetis, acres of asphalt going to seed. New state-of-the-art airports near Valencia and Madrid are surrendering to weeds. Six hundred new houses in the village of Pioz, outside of Madrid, are empty, and the government estimates that it will take more than seven thousand years for Pioz to get out of debt. There are dozens of towns like Pioz.” Letter from Madrid: “The Hangover”, The New Yorker, February 25, 2013
In Spain it was the private sector that brought on the disaster, while in Greece and elsewhere it was profligate public spending, but the end result was the same.
When the world-wide recession hit, Spanish banks and the cajas, the regional savings and loans, failed. The money they lent to the grandiose failed private developments was money borrowed at low interest rates from foreign [European] banks. “[D]ozens of smaller banks and many bigger ones, went under, and the banking system required a huge bailout, from Madrid and then from the European Central Bank.”
The low interest policy was orchestrated by the European Central Bank to assure that Germany, Europe’s Konzertmeister, would remain “a competitive manufacturer and exporter”. Germany became the lender of cheap capital with Spain the borrower. “Germany lent to Spain so that Spain would buy German goods and services. Spain borrowed and bought; Germany lent and sold.”
When the shit hit the fan, there was no way out. Spain unable to leave because it owed too much with Germany staying in because it was owed so much, a modern day political and economic version of Jean-Paul Sartre’s “No Exit”.
I ain’t even going to write about Greece and Portugal. Too much ink has been spilled on those two, along with all the rest. It would be just variations on the same theme with different players and other venues.
Should a country, any country think about hopping aboard the sinking Euro ship, a ship where the rats can’t afford to jump off, to bail out, it should consider the consequences.
The accession process mandates that the candidate state must comply with the Copenhagen criteria, stable political institutions, the rule of law, free market economy, all those good fuzzy things that are “good as American pie”, but includes the proven failed policies of the Euro.
The accession process promises immediate, significant development funds, agricultural incentives and the like. But this is a bait and switch scam, get a little, pay a lot. By getting on board at this late date a candidate country will inherit past financial sins of omission and commission, it will have to participate in the past, present and future bailout of Europe’s largest financial institutions, of the EU itself.
Acceptance of all EU legislation, another must, will affect pensions, medical care, work place norms and standards, all of which will have to be upgraded at great cost.
Historically speaking no country has been granted admission to the EU without first having joined NATO, so join NATO and spend yourself silly. A candidate country must bring its military forces up to current NATO standards. All present weapons and weapon systems must be fully integrated and compatible. That means scuttling and junking the candidate country’s non-conforming hardware and replacing it with German, French and English made weapons at a cost in the billions of dollars.
So the question is, yet again, why would any country in its right mind want to join the European Union and be saddled with the Euro today?
Deyan Ranko Brashich, an attorney and Op-Ed columnist, resides in and writes from New York City. His contact and blog “Contrary Views” is atwww.deyanbrashich.com.