A few days back, George Soros was warning that if the latest EU summit didn’t take appropriate steps, the euro would “dissolve”.
And it seems it hasn’t taken appropriate steps. Via ZeroHedge:
Going into this summit we had a monetary union in Europe that clearly did not work. Coming out of this summit we have a monetary union that still does not work.
I suppose that the way I see it is that there are two ways out of the crisis. 1) Countries like Greece leave the euro, relaunch their former currencies, default on their debts, and thereby regain control of their own destinies. Or 2) EU sovereign states hand over their sovereignty to the EU, which becomes a sovereign state with its own central bank, and its own central economic management, with debts pooled. The trouble with the EU at the moment is that it’s neither one thing nor the other. It has a single currency, but 25 separate economic managers. It either has to revert to separate national currencies, or it has to become a single European superstate.
The European political class seems to want the latter option (because it gives them a free ride). But this option seems to be politically impossible, because dissolving national sovereignty in 25 different countries and handing it over to Brussels is something that can’t be done in a hurry. It’s the sort of thing that takes years, if not decades.
And not only does the European political class want this option, but also it seems to be unable to consider any other option. There is no reverse gear. It’s either forward to ever closer union, or it is nothing at all.
The political class is unable to go forward, but will not contemplate going back, and allowing countries to leave the EU. And this is why they keep having these summit conferences, and deciding to do nothing at all. Richard North’s EUreferendum:
In fact, the “colleagues” were supposed to deliver a “roadmap” which was to reassure financial markets that the eurozone was prepared to make drastic political reforms in order to save the euro. This was the opportunity to remedy the “birth defect” of an economic and monetary union without fiscal and political union.
But, it was not to be. The Guardian describes the colleagues as “groping” for a breakthrough. And a group grope is about all they have achieved…
Faced with a “make or break” challenge, the colleagues broke. They were expected to step up to the plate with proposals for a new treaty – their “significant breakthrough”. Instead, the “quartet”, led by Van Rompuy, ducked the issue and delivered seven pages of vacuous waffle, followed by a retreat into corproate-speak with their statement.
There is paralysis in the upper echelons of the EU. They can’t go forward, and they won’t go back. Like one of those wind-up toy cars that races round the sitting room floor before getting stuck under the sofa with its wheels spinning.
But the present EU crisis can’t wait very much longer for a resolution. And if EU leaders can’t deliver one, then someone else will. So I expect to see individual national politicians grab the initiative fom the dead hands of Brussels. After all, nobody else is going to. First one country, and then others, will exit the eurozone, in a disorderly manner. In the end, there will be some core group of countries remaining in the eurozone, with everybody else having left.
And when these countries leave the eurozone (and in effect the EU too) they won’t just abandon the euro, but also all the restrictive rules and regulations that have been pouring out of Brussels for the past 20 or 30 years. Whole reams of legislation will be torn up. And among these will be EU-driven smoking bans.
Well, you didn’t really think I was interested in anything else, did you?
And then pretty much all the peripheral EU countries, like Greece and Italy and Spain and Portugal and Ireland, will be deregulating their economies – and lifting smoking bans. Not that the Greeks ever paid much attention to their smoking ban. They’d only imposed these bans in the first place to curry favour in Brussels, and so once Brussels ceased to matter, they could abandon these stupid rules.
It was something that was pointed out to me this afternoon, when I stopped off at an English pub in Herefordshire (or maybe Worcestershire), and asked a few smokers to fill in the ISIS survey. Which they did very gladly, marking maximum impacts, and supplying email addresses. One of them pointed out that in Spain there were now calls to relax the smoking ban there in order to attract foreign customers (like me, who hasn’t been back to Spain since November 2010).
I was very impressed that, in a little country pub in England, folks knew what was happening in Spain. They must’ve been wired up or something. Which is why they all had email addresses, maybe. How should I know?