Tuesday, 30 November 2010

What a mess Eur in now...

Over recent months the EU has been in the news quite a lot. For a change.
But it's not good news, whatever spin you put on it.
All the critics of the Euro are now champing at the bit to say "I told you so" - but what good will that do?
The single currency could never work across such a disparate collection of states. In order for one currency to stand the test of time, economies must be put on an even keel, which means homogenizing various attributes of trading, lending and business across the board. In order in turn to achieve this sort of commonality, politics too and domestic spending must be equatable. In Greece the cause of collapse has been put down to flagrant overspends of public money and ludicrous under-taxing. In Ireland, it's the reckless lending of banks that have bled the country dry. Spain, Portugal and Italy, and now, so they say, Belgium, are also at risk of falling, connected by a now bitterly devalued currency that will find it tremendously hard to get back on its feet. Surely there can be no future for the Euro, as such problems will come round time and again unless a federal inter-country bloc is established. And it's not just UKIP who detest the thought of that. It goes against the public wishes of nearly every member state. Losing sovereignty is an issue, therefore, so is a single currency.
But this of course poses a problem for the EU, who ultimately want to see deeper integration, a centralised political state of Europe. Without the Euro, what else have the Commission got to justify an onslaught of common legislation? Some might say introducing the Euro before creating a federal state was building the trains before laying the tracks. Derailing was a guarantee.
So what will happen now?
Certainly the EU must cling to the Euro to justify the whole project isn't jeopardized. Even Van Rompuy came out with a sweeping statement to this tune. But clinging isn't as easy as it sounds. If Portugal falls next, the European Central Bank and EU reserves available for bail outs would just cover the costs. But if this happens, what about Spain, with a far bigger balance sheet? The ECB itself risks having to be bailed out and the only economy that could wade in and help is Germany, whose population is already calling for a return to the Deutschmark. Surely in a "democratic" institution, the vox populi should shine through?
Well we are yet to see that happen, on Lisbon, on monetary union, on all sorts. But the next round of national elections in certain countries could see a lot of anti European sentiment develop, and national governments less cooperative than the France and Germany of today who have negotiated setting up a crisis cash reserve for the next loose thread.
Below are some vids of what was a very busy week in Strasbourg. I think that rather than try to write about everything I spoke about, it would be easier to post the clips instead!

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