The Relentless Eurocratic Power Grab

“The euro has profound economic advantages and is the most powerful symbol of European integration,” said not some wild-eyed dude with a joint between his lips, slouching in a café in Amsterdam, but the “Final Report“ issued by the Future of Europe Group, composed of the foreign ministers of Germany, France, Italy, Spain, the Netherlands, Poland, Belgium, Austria, Denmark, Portugal, and Luxembourg. It remains uncertain what they were smoking.

But they did fret about the future of the euro and the EU, their chef d’œuvre. To keep it glued and duct-taped together, they came up with a laundry list of recommendations concerning its governance. It included the vampire item that simply refuses to die, namely shifting sovereignty over national budgets to the European government.

To their credit—or was it just window dressing, given the uproar on the internet?—they also called for more “democratic legitimacy and accountability,” of which only trace elements are discernible in the EU government. One of the key items: “a directly elected Commission President.”

Then came the eurocrat response.

“If this is not going hand in hand with large powers for the Commission, then forget it,” said European Council President Herman Van Rompuy at a conference centered on that Final Report. It would give that top job “a huge legitimacy,” he said, but it would “organize the disappointment in advance.” Only by handing “large powers” to the Commission could a directly elected Commission President become functional.

Another step in the ongoing and ever so methodical power grab.

Just then, a 52-page draft report by the unelected European Commission President José Manuel Barroso bubbled to the surface—a continuation of his bureaucratic drive to create the United States of Europe come hell or high water.

To overcome “the crisis of confidence,” he called for “fast and deep” integration and envisioned a powerful European government. It would, for example, have the power to coordinate how Member States tax their citizens—with the unspoken goal to alleviate tax competition between countries, a recurrent complaint by high-tax countries against their lower-tax brethren. Even in the USA, the federal government doesn’t attempt to tell the states how to tax their residents. It would cause a revolt.

Barroso, building on his idea of a United States of Europe, also wants to give the Commission, his Commission, the power to veto the budgets of Member States. Imagine the White House vetoing California’s budget—OK, that budget should be vetoed because it’s a sham, but it’s our sham, and we will deal with it or sink with it. White House interference would be a reason for secession.

He wants to endow that souped-up government with the ability to levy its own taxes, rather than be dependent on handouts that are determined during bitter budget negotiations by the 27 Member States. It would be a coup. It would give the European government the power to impose taxes on already overtaxed people—with little or no democratic limits.

And all that without a constitution. Because the people had voted it down by referendum.

Meanwhile, Dutch Prime Minister Mark Rutte was giving interviews left and right, to reject exactly what the eurocrats were trying to push through: a federal Europe. He believed in a Europe of national states that worked together closely.

Instead of all that federal razzmatazz, he demanded that Eurozone countries “stick to the commitments that they made when they introduced the currency.” Hence, deficits not to exceed 3% of GDP. And austerity. That would be “essential for the survival” of the euro, he said. And only that would make the euro “credible.” The goal should be to strengthen the euro “and attack the dollar as world currency.”

He had something for everybody. Including Greece: treaties should be tweaked, he said, to allow a country that doesn’t follow the rules to leave the Eurozone without also having to leave the EU, which is currently not possible. And haircuts for official sector creditors, such as the ECB, that are holding most of the Greek debt? Not a good idea, he said. Not only for legal reasons, but also out of principle. “That would send the wrong signal to other countries that have debts … like America.”

“I cannot be disillusioned because I no longer have any illusions about Europe,” muttered Euro Group President Jean-Claude Juncker a while ago.

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  5 comments for “The Relentless Eurocratic Power Grab

  1. emptyfull says:

    Yes, the Eurocrats are hoping to build a new "nation" via technocracy and crisis. Has ever there been a stupider way to try to forge a functioning political and economic entity? Even if they somehow get their people to go along for awhile because "TINA" (There Is No Alternative), they'll be jamming it it down everybody's throats. And the "internal" politics of such a nation will be brutal, as Germany particularly attempts to become the new nation's center of power, and massive economic dislocation unleashes unpredictable energies. The sectional tensions will be more complicated and more combustible than those that led to the American Civil War.

    To reach the United States of Europe, the Eurocrats would have to bridge the crazy political chasms developing between the nations of Europe through unpopular treaties that would never be approved by any nation that allowed its citizens to vote on them. Then, they would have to finalize it all in some form of workable Constitution that supposedly had the assent of each nation. Can you imagine all of that happening in the next 10 years?

    There are, unfortunately, two significant lessons to be learned from this debacle:

    1. The euro was a horrible idea. No currency can function without a genuine sovereign with full political control over the currency area, redistribution mechanisms, etc. backing it.

    2. Using the inevitable failure of the euro to force people unwillingly into a superstate was worse than a horrible idea. It was something closer to suicide by optimism.

    I hope Europe can find a way to get off this train before it crashes, but I doubt it will happen. After all, breaking the Euro would only cause a crisis of about Lehman squared. The fall of the United States of Europe (or its preservation via iron fist) might decimate democracy itself.

  2. Rik says:

    The EU has moved stealthly in people's daily life and a lot of the Europeans donot like that at all.
    For all these wild ideas of eg Barroso is no platform. Certainly not with the voters in general and in all 27 countries and as the EU is now constantly on the top of the agenda (and very negative) also with a lot of politicians (the ones that want to be reelected). And all 27 countries will have to agree.

    Simply means that the UK issue should be settled first in the present set up with them it will not happen. And if in France or Holland a referendum would take place the outcome is nearly certain a: not more Europe.

    Donot get nervous about the report. Some countries send not even their second man but a high civil servant to the meeting. That is how serious they take it.

  3. Wolf Richter says:

    Rik: I agree that the meeting itself is not to be taken too seriously. The reports however have more weight.

    In the Eurozone, everything starts out small, and there is resistance, but it continues to be there, rather than go away, and at the next minor crisis, it snowballs into something bigger. The fiscal union treaty was one of those.

    So all these zany ideas have to be taken seriously. They’re not going to happen today, but they’re also not going away. And gradually, they’re getting more real, and some of them will become reality.

    Imho, introducing more democracy into the EU is a good thing. Giving that government more power, however, is a dubious goal. Europeans should be leery.

    You mentioned “stealthy”- and that’s perhaps the best descriptor for the political processes in the EU I’ve heard in a while: it’s there, but you don’t see it unless you look really hard. In Germany, much of it is actually out in the open; in France, almost none is. Every country differs. But most people, even in Germany, don’t pay that much attention – hence the stealth.

  4. Rik says:

    I doubt that except of the EZ you have to be that scared of powergraps. Several things are going on that all work against a further powegrap.
    -It got into daily affairs of people (and they are told it is European you have to live with it we cannot change it) and people simply donot like that. In the same time it got even without the EZ crisis on the agenda of the man in the street.
    -massive negative PR around mainly the Euro, but also around things like immigration from especially the Balkans and before that Poland and Co. People simply donot like to be associated with negativity and the EU is simply mainly negativity.
    -local politicians start to oppose. Before it was convenient now it isnot anymore. For mainly 2 reasons. Voter pressure, what you see in Finland,Holland and France. Simply forcing existing parties to adjust or lose 10s% of the vote. Furthermore local politicans themselves get limited in their powers and they not like that.

    The model of the EU is completely outdated. Before it worked into more Europe. Somebody proposed more Europe, compromise solution end up half of that (but still more Europe). It simply doesnot work that way anymore. UK eg says enough Europe is enough. And as all 27 have to agree there is simply no real basis for increasing powers. The model isnot working anymore as 'all agree and always a compromise' is not acceptable anymore for some. Which means basically everything is obstructed and the treaty needs major revision (different tiers possible and other ways to approve legislation), but there is also no platform for that.

    PR of Barroso and Co is simply horrible. If you want something politically happening you want that guy to do the PR on the other side (image 2.5 of 10 (with 6.0 just ok but not more than that, GW Bush did extremely well compared to this). However as you indicate he acts like a non elected burocrat and looks Southern and dodgy to most in the North as well, so there it will be even lower than 2.5).
    Europe needs a platform in the population so the voters allow their politicians to be pro Europe as well as be able to solve the running issues. They do nothing to create that that is their main weak point.

    Euro might lead however to emergency measures as hardly anyone of the decisionmakers oversees the problem (may be with the exception of Monti and Draghi). Merkel imho simply doesnot oversee the whole thing. She doesnot have a proper realistic view of the endgame and how to get to a working structure. Just solving one problem at the lowest possible costs at he time and up to the next. Not prepared that Greece is in say 6-12 months becoming a huge budget issue in her own country (could well be just before the elections, bad timing). Not seeing that the rest of the PIIGS will likley turn Greek and make any rescue totally unaffordable.
    So a lot can be expected. But clearly the decisionmakers are scared. For the thing falling apart and for their own voters. And in the process making things worse. Greece leaving was not really an issue. but if you keep shouting nobody is left behind and if Greece goes they will think we let the others fall as well and if the Euro goes Europe is a goner. You put things on the agenda that were not there. And now a lot of people see dropping Greece as a clear sign of less support for the other PIIGS. They have created their own monster and now it will eat them.
    Under pressure and without proper knowledge and technical skills and scared so everything can happen there.

  5. Yannick C. says:

    if you want to compare Europe to a former political construction, don't use soviet union, just look at Austria-Hungary. Consider the words of Mark Twain;

    The Austro-Hungarian Monarchy is the patchwork quilt, the Midway Plaisance, the national chain-gang of Europe; a state that is not a nation but a collection of nations, some with national memories and aspirations and others without, some occupying distinct provinces almost purely their own, and others mixed with alien races, but each with a different language, and each mostly holding the others foreigners as much as if the link of a common government did not exist. Only one of its races even now comprises so much as one-fourth of the whole, and not another so much as one-sixth; and each has remained for ages as unchanged in isolation, however mingled together in locality, as globules of oil in water. There is nothing else in the modern world that is nearly like it, though there have been plenty in past ages; it seems unreal and impossible even though we know it is true; it violates all our feeling as to what a country should be in order to have a right to exist; and it seems as though it was too ramshackle to go on holding together any length of time. Yet it has survived, much in its present shape, two centuries of storms that have swept perfectly unified countries from existence and others that have brought it to the verge of ruin, has survived formidable European coalitions to dismember it, and has steadily gained force after each; forever changing in its exact make-up, losing in the West but gaining in the East, the changes leave the structure as firm as ever, like the dropping off and adding on of logs in a raft, its mechanical union of pieces showing all the vitality of genuine national life.

    That seems to confirm and justify the prevalent Austrian faith that in this confusion of unrelated and irreconcilable elements, this condition of incurable disunion, there is strength — for the government. Nearly every day some one explains to me that a revolution would not succeed here. "It couldn't, you know. Broadly speaking, all the nations in the empire hate the government — but they all hate each other, too, and with devoted and enthusiastic bitterness; no two of them can combine; the nation that rises must rise alone; then the others would joyfully join the government against her, and she would have just a fIy's chance against a combination of spiders. This government is entirely independent. It can go its own road, and do as it pleases; it has nothing to fear. In countries like England and America, where there is one tongue and the public interests are common, the government must take account of public opinion; but in Austria-Hungary there are nineteen public opinions — one for each state. No — two or three for each state, since there are two or three nationalities in each. A government cannot satisfy all these public opinions; it can only go through the motions of trying. This government does that. It goes through the motions, and they do not succeed; but that does not worry the government much."

    and later:

    I must take passing notice of another point in the government's measures for maintaining tranquillity. Everybody says it does not like to see any individual attain to commanding influence in the country, since such a man can become a disturber and an inconvenience. "We have as much talent as the other nations," says the citizen, resignedly, and without bitterness, "but for the sake of the general good of the country we are discouraged from making it overconspicuous; and not only discouraged, but tactfully and skillfully prevented from doing it, if we show too much persistence. Consequently we have no renowned men; in centuries we have seldom produced one — that is, seldom allowed one to produce himself. We can say today what no other nation of first importance in the family of Christian civilizations can say: that there exists no Austrian who has made an enduring name for himself which is familiar all around the globe."

    Sound familiar when compared with the gollums that are the "leaders" of Europe ? (Barroso, von Rumpoy, etc.)

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