The EU is as doomed as its currency – let’s get out from under this collapsing monstrosity
By Gerald Warner
The European experiment has failed and is only artificially being kept alive on a life-support system of taxpayer-funded bailouts. The euro is now a zombie currency: only the political will of the European nomenklatura keeps it nominally in existence. That is the exact reverse of the proper relationship between a currency and the state: the currency should be the expression of a healthy economy testifying to the legitimacy of the government it represents. Instead, a synthetic European super-state is showing its non-viability and moribundity through the implosion of its currency.
Do you see that smoking slag-heap of smouldering, toxic debt? The polite name for it is the European Central Bank (ECB). It is a landfill site being used by bond investors to dump Greek waste paper and other unwanted garbage. It resembles the back yards of Fannie Mae and Freddie Mac when the sub-prime time-bomb exploded. Steptoe and Son would turn up their noses at such a tip. As the ECB’s president, Jean-Claude Trichet, despairingly confided to Der Spiegel on Monday, Europe’s economy “is in its most difficult situation since World War II or perhaps even since World War I”.
That was an unwarrantedly optimistic assessment. The European economy is in its worst situation since 1789 and the eve of the French Revolution. Indeed, the parallel is uncanny. Jacques Necker, the Vince Cable of his day and similarly the darling of every armchair fiscal reformer in France, was the father and paradigm of all the debt-loving, statist, spendthrift finance ministers of today.
He squandered a fortune on supporting the American War of Independence, the consequence of which was the importation of revolutionary ideas into France; ratcheted up government debt; dispensed largesse to create a dependency culture; insisted on opening the books to the public but cooked them heavily before doing so; and retired to Switzerland when the balloon went up. It is hard to believe Gordon Brown did not have a portrait of him on his office wall. At least Vince Cable did not sire a Madame de Staël, Necker’s daughter who bored for Europe in the early 19th century.
We live in an age of mass communication: people have noticed that Europe has a few little local difficulties. The US Senate has just voted by a robust majority of 94 to 0 to veto IMF rescue packages for hopeless cases. American legislators are determined that, whoever stumps up their hard-earned cash to keep Zorba in his lifestyle of siesta and ouzo, it is not going to be Joe Public, of Main Street, Peoria. Joe has already been sufficiently mugged by Wall Street hoods to feel that his contribution is more than adequate. As European ideologues throw more and more billions into the bottomless pit of Greek, Spanish, Portuguese and Irish indebtedness, they are running out of stashes of cash to plunder. The IMF is now the final resort and the US Senate has drawn a line in the sand.
The real-life solution to the crisis would have been to let Greece and the other PIG nations default on their debt and restructure it; to return to the drachma, peseta, etc and devalue. The euro was never a real currency: it has failed and the longer the Euro-fanatics delay in recognising that reality the more they will be punished. Germany’s nostalgia for the security of the deutschmark is now palpable to the point of urgency. Angela Merkel, having lost the upper house of the German parliament in recent elections, is now a lame duck. As she says, “if the euro fails, it is not only the currency that fails. Then Europe fails. The idea of European unity fails.”
Exactly; except there is no “if” about it – Euroland is down the plughole. The question is: how much longer is Europe going to court economic collapse that could regress its living standards by a generation, to placate the power-mad fantasies of the Unholy Roman Emperors in Brussels? The fundamental, structural flaw in the euro from its inception was that it was a currency invented to give an appearance of substance to a political aspiration – it was Brussels Monopoly Money.
Although we are not part of it, we will still suffer from its implosion. The time has come to dismantle the whole infatuated European project. So, what are Dave and Nick going to do to retrieve Britain’s interests from this accelerating debacle?