The democracy deficit in Europe is hitting the fan. If you have a currency, you must also have a government, and the peoples of Europe are not yet ready to unite (submit) to the Franco-Prussian axis. The club med countries in the south can’t match German industriousness or French guile, and there’s still those stubborn little things called language and culture.
When jobs move from MI to FL, Michiganders can follow the jobs and Floridians don’t object when their tax dollars help their fellow Americans with the transition. When jobs move from Greece to Germany… well, it’s different, isn’t it?
James Delingpole explains how the lack of democratic accountability isn’t a bug, it’s a feature; and it will likely be the undoing of their elites’ post-WWII hidden agenda:
However bad you think things are in the US right now, being in Europe…at the moment is like standing on the prow of the Titanic and watching the iceberg approaching… no warning you yell to the bridge is going to make the blindest difference because even the captain knows the ship is doomed…
If you look at the history of the European project, it was designed to thwart the democratic process. One of the great misconceptions about the European Union is that is was a good idea, a sort of trading zone which suddenly went bad. It was always part of the plan for the European project as devised by Jean Monnet, it was designed to be a political union, but brought about through the back door. What Jean Monnet understood very clearly from the start is that no sovereign people could be persuaded to join a political union over which they had no democratic control. So what he did was create this system called “l’engrenage“ – engrenage means ratcheting – where people are gradually sucked into the European Union, little by little. Softly softly, catchy monkey…
Now we have what is sometimes known as “the beneficial crisis.” Beneficial, that is, to the Eurocrats who want political union. They’ve forced the member states of the euro into a position where if they reject political union, they face the terrible economic collapse that is on the horizon now. So they have no choice but to allow their fiscal policies to be dictated by the European super state – not by their democratically elected governments.
From Robert Samuelson at WaPo in Europe’s Economic Purgatory:
So Europe is trapped in purgatory. What’s economically sensible is politically treacherous, and what’s politically sensible is economically treacherous. Moreover, the euro’s promise has been turned on its head.
When introduced in 1999, its overriding goal was clear. As an engine of shared prosperity, it would strengthen a common European consciousness. Germany’s power would be subordinated to the larger project of a united Europe. Now, everything is reversed: The euro is undermining Europe’s economy, sowing conflict (Britain has rejected the latest package) and elevating Germany — as the economically strongest state — to set terms for dealing with the crisis.
Much of this was predictable and, indeed, was predicted. Here’s a commentary of mine from 1997: “A single currency (the dollar) works in the United States because wages are flexible and workers are mobile. Workers move to find jobs. … Europe lacks these advantages. … One way countries can offset differences in competitiveness is through flexible exchange rates. … A single currency would eliminate this possibility.”
Charles Lane in today’s WaPo praises Marty Feldstein as The man who predicted the European debt crisis:
Feldstein foresaw that the trigger for political tension would be a sharp economic downturn, imposing different levels of unemployment on different members of the monetary union, because high-unemployment countries could not recover their competitiveness through currency devaluation.
The ensuing “conflicts over economic policies and interference with national sovereignty could reinforce long-standing animosities based on history, nationality, and religion,” Feldstein warned. “Germany’s assertion that it needs to be contained in a larger European political entity is itself a warning. Would such a structure contain Germany, or tempt it to exercise hegemonic leadership?”
Michael Greve at NR disagrees with the notion that Europe is just facing its own “Articles of Confederation” moment, in The EU Misses Hamilton’s Moment:
While there aren’t going to be German tanks in Athens or anywhere else, the Brussels deal does illustrate the deeper, constitutional problem with heaping yet more authority on a government-over-governments. A now-we-mean-it confederacy with teeth was not Hamilton’s project. It was then, as it is now in Europe, the project of brain-dead state elites. Far from embracing it, Hamilton fought it with all his resolve and skill. What he fought for instead was a constitution beyond Europe’s reach and imagination — an actual fiscal union, with a federal government that directly taxes and regulates citizens but leaves state governments to their own fate. That is what we inherited.
American federalism has its problems, but the prospect of installing trusted federal bureaucrats or governments of unity in Sacramento or Springfield is not among them.
Europe’s fortune might improve if its leaders could dispense with “closer union” blather and instead contemplate Hamilton’s teaching on the “great and radical vice” of their union: a government over governments is “subversive of the order and ends of civil polity.”
UPDATE: Iain Murray writing at The American Spectator about what the US needs to expect and plan for:
The actual results of the summit were somewhat overshadowed by British Prime Minister David Cameron’s refusal to join in the Eurozone’s suicide pact. Indeed, that’s what was agreed — a suicide pact, not the advertised fiscal union. The heads of government that joined in the pact agreed that they would balance their budgets, which are to be policed by the unelected, unaccountable European Commission. This does nothing to solve the euro’s structural problems and rides roughshod over the entire principle of democracy (as I have noted elsewhere). The result will be a devastating, long-term recession in the periphery of Europe, and presumably popular revolt in several countries. Sadly, those popular revolts are more likely to be of the socialist variety than revolutions for liberty…
Much of the diplomatic effort involved in the summit was supposedly directed at creating a fiscal union (they ended up with what they called a “fiscal compact”). The rationale is supposedly to make the euro currency union more like the stable U.S. dollar currency union, which is also a fiscal union. Yet the U.S. fiscal union is nothing like the EU fiscal compact. The United States has no power over state budget deficits, and there is an implicit understanding that a state in budget crisis will not be bailed out. That has certainly been the historical case, as when Arkansas defaulted in 1933. The state was eventually forced to restructure its debt to its creditors’ satisfaction. Therefore, a fiscal union that gives central control over national budgets and the promise of national bailouts, as in the EU, is completely unlike the U.S. fiscal union…
(W)e must face up to the idea that the Eurozone will collapse, either in a structured fashion, with Germany throwing members out of the club, or in a messy fashion, with sovereign defaults, bank collapses, and socialist revolts… The United States will be badly affected by the collapse, with a lot of value wiped off the markets, bank failures, and a significant reduction in global trade. The worst possible thing we could do is to throw American money at the problem. The structural issues are just too great. We need to prepare ourselves for the worst with genuine supply-side reform here, deregulating our economy to make it more nimble in response to a massive global recession not of our making. At least the price of oil will probably tumble sharply.