Archiv für die Kategorie „Political Order Threat“

Eurozone Threat to Political Order

Donnerstag, 30. Juni 2011

Further to our Euro Debate : That Britain should join the Eurozone (refer Categories/ Chairmans Blog/ Federal EU/ Euro Debate in the right-hand index column), Charles Moore writing in the Daily Telegraph Saturday 25 June, sees Britain as the political outsider, essentially proven right now that the dangers of the Euro as a one-size-fits-all currency have come to pass. He thinks this very outsider status also gives Britain little chance of influencing the current Eurozone crisis now threatening the political order in Europe. There will, therefore, be no new post-crisis agenda that Britain can change.
Since in theory existing treaties forbid bail-outs of Eurozone members, the very nature of the continuing Greek bailouts (currently the second one) is helping to bring about further European integration e.g. Euro-enthusiasts losing patience with the difficulties of extracting bail-out money from national governments, are proposing more pan-European taxes instead. The government debts of the weaker Eurozone members are being transferred from banks and other creditors to the European taxpayer. Dogmatic EU leaders are saying ? like the failed Communist ideology of the former Soviet Union ? if Europe is not working, it is because we do not have enough European integration.
However, fear and boredom are currently letting these European leaders get away with it. EU boredom works well in the UK for example with 400,000 people marching through London in protest at proposed government cuts of £6.2 billion, yet Britain has committed twice this amount to the Euro bail-outs with no one taking to the streets in protest. Fear similarly holds the angry populations of the Eurozone in check. The people of Greece do not like the austerity measures imposed on them (as they see it) by the European Central Bank (ECB), but they know that if they left the Eurozone the value of their savings would halve. Therefore, Greece will pretend to do what is demanded by the ECB, and Eurozone leaders will claim that everything is under control, until the next crisis.
The Germans are angry as well since they do not like subsidizing the profligacy of Greece, Ireland and Portugal etc. but they also do not want to lose the competitive exchange rate of the Euro, the respectability of being good Europeans or the problems of their own banks to be exposed. So Chancellor Merkel agrees to the bail-outs but only on terms so perversely punitive that they cannot work and, therefore, will guarantee e.g. a third Greek crisis.
The question is whether boredom or fear will continue to outweigh the anger of the European people. When influential people make other people poor while they remain rich, the political order can start to crumble. Charles Moore concludes that although the Euro was ill-conceived, we should not wish for its demise. There is some logic in a common currency for large parts of mostly northern Europe and only misery for many if the Eurozone falls apart. However, to be seemingly proven right as a Eurosceptic brings no power for Britain over how events in the Eurozone will evolve. Certainly, the endorsement of the Euro by the Chinese Prime Minister during his recent visit to the UK brings powerful support for the continuing viability of the Eurozone.