Woo-hoo! Europe has been saved! Again! In the wee small hours of this morning, Europe’s leaders thrashed out the latest in a long line of historic, continent-rescuing agreements.
The details are, as is always the case with these agreements, vague, but essentially the 17 members of the single currency Eurozone, plus other European Union countries that are either hoping to join the euro or have chosen not to adopt it, have agreed to tougher budget rules. These include a commitment to balanced budgets, with sanctions on countries whose deficits exceed 3% of GDP, and a requirement to submit national budgets to Brussels for approval. (When “Brussels” is mentioned in relation to European matters, it generally refers to the European Union and Eurozone bureaucracies, which are based in the Belgian capital).
The balanced budget commitment is laughable – countries cooked their books in order to join the euro in the first place, and continued cooking them for years in order to create the illusion that all was well. The requirement to submit budgets to Brussels for approval is less of a laughing matter, beginning as it does the process of rendering national governments largely irrelevant. The deal also includes additional measures to tackle the ongoing Eurozone debt crisis, but here too the details are hazy.
Never mind that this agreement merely kicks Europe’s problems down the road for a few months; or that the new rules will be flouted; or that the nations of Europe have agreed to surrender a large measure of sovereignty to the technocrats of Brussels. This agreement is about one thing: advancing the political project that is ever-closer European integration, a project driven by transnational bureaucrats, guilt-laden Germans and socialist politicians, but also by nominally conservative politicians who are either afraid of the economic consequences of being left out, or who, like grandeur-deluded French President Nicolas Sarkozy, see a Federal Europe as giving his country more clout than it could muster on its own.
Notably absent from the agreement is Britain, after Prime Minister David Cameron used his veto to block a treaty amendment that would have been binding on all 27 EU members. The British government had objected to proposals for tougher Europe-wide regulation of financial services; these included a new tax on financial transaction, which would have effectively meant a tax on the British financial services sector, with the proceeds being shoveled into the black hole of Eurozone bailouts. “Euroskeptics” in Cameron’s Conservative Party, most of whom had doubted their leader would have the spine to deploy his veto, have been pleasantly surprised.
Not surprisingly, Britain’s pro-European elites – including Cameron’s Liberal Democrat coalition partners and most of the Labour opposition, with the BBC cheerleading – are aghast, and are warning of Britain being “isolated” from the rest of Europe. The inference is that isolation is a bad thing, but Britain’s isolation is akin to that of a would-be passenger who, having sold his ticket, is standing on the dockside watching the Titanic sail majestically into the distance.
What this means is that European financial service not currently in England and Switzerland will be relocating to England.
Look to Britain to forge additional agreements with Canada and secondarily the USA if a conservative government is elected here. In the aviation world repudiation of the European carbon tax could route significant amounts of traffic through the UK rather than Frankfort or Paris. The UK immigration mess that has been parachuted on them by the Eurocrats can at least be tackled and they can cease being a dumping ground of continental Muslims.
There are lots of downsides, but without control of their own population they will end up being doormats for the Germans and the French without firing a shot. The French midget essentially sealed the deal at the meeting.
This was all about the money, nothing else.
France and Germany proposed to bail out the Eurozone by taxing the City of London into oblivion, side benefit all financial transactions move to Paris and Berlin.
Cameron, weak-spined as he was, had to say no because it would have meant the end of British government providing all the goodies for anyone in Britain, so dependent is Britain on the tax stream from the City of London.
Now France and Germany have to come up with the money. Not only does Greece need a bail-out, but Spanish banks, both national and regional, Portugese, Italian, Irish, and likely French (for certain) and German (because of loans to Italy and Spain) banks as well. The amount likely totals around $5-8 trillion USD. Again, likely when all is said and done, about 5-8 trillion US Dollars.
There is not enough money. Not even in German taxpayers, who already have to subsidize unproductive East Germany. So the Euro is doomed. It was doomed from the start, the proposal to tax away the City of London was made to be rejected in the first place.
Britain isolated, eh? I am reminded of the famous, apocryphal BBC weather report: “Fog in Channel. Europe isolated.”
a Germany impoverished by by being taxed to death to pay for the ridiculous social spending of it’s economically ignorant neighbors in the EU? Considering the past history of impoverishing Germany through confiscatory transfers of money to other countries it would be wise to pay close attention to the European situation. It would also behoove the US to distance ourself from the economic(and perhaps social)calamity that the EU seemingly does not have the will to avoid. Bailing out the EU with borrowed and/or monetized american capital would appear to be ‘doubling down on stupid’. In that context it would seem that Britain is the smartest country in the room. #2 & 3 above point to a real avenue for a rebirth of British wealth and power.
Britain’s Splendid Isolation of the late 19th century soon gave way to her more traditional stance – an alliance with the strongest enemy of the power threatening hegemony in Europe. Last time this resulted in an alliance, first with Russia and then with France.
So does this mean that Britain will move towards closer ties with Russia to oppose the Franco-German alliance in Europe? Of course, America is a much more significant part of the European picture now, then it was at the time of Splendid Isolation.
Germany, The Netherlands, Norway, Sweden, and Denmark are all, by North American standards, pretty centralized, biggish government and highly taxed, and yet they are in nowhere near the economic, and ‘quality of life’ mess that the US is. In fact, Norway and Denmark seem to alternate at first place on any surveys that assess ‘happiness, with all the mentioned countries way ahead of the US on any survey that measures quality of life variables. What I’d like to know is where there is an example of a highly respected, envied country that is small government, decentralized, and minimally taxed…and please don’t respond with the US as an answer. It is slipping into a dystopian nightmare largely because it is the closest to the economically unregulated standard held up by conservatives.