By Don Quijones, Spain & Mexico, editor at WOLF STREET.
Since Europe’s sovereign debt problems exploded onto the scene in 2010 the European Union has masterfully exploited the crisis to strengthen its grip over the old continent. It has stripped once-proud, independent nations of the last vestiges of their economic sovereignty. It has also pulled off the long-cherished dream of banking union, which was quietly consummated last fall.
Now, with the help of Berlin and Paris, it is looking to complete the coup. And this time not in the shadows, but in broad daylight.
The first move was to prep the masses. In an article published in The Guardian, Emmanuel Macron, France’s Minister of the Economy, and Sigmar Gabriel, the German Vice-Chancellor, outlined the broad strokes of the plan, calling for greater fiscal and social harmonization in the Eurozone while conceding that other EU countries like Britain should be allowed to settle for a less integrated Union based on the single market — at least temporarily:
Our common goal is to render it unthinkable for any country in pursuit of its national interest to consider a future without Europe (meaning, one assumes the EU) – or within a lesser union.
Straightening A Crooked Brussels
“The euro was built on a Franco-German understanding but also on a typically European compromise,” they write. “This gives France and Germany a particular responsibility to straighten what is crooked” — an eminently fitting phrase.
“A new, staged process of convergence is needed,” the authors add. This would involve not only structural reforms (labor, business and the environment) and institutional reforms (functioning of economic governance) but also social and tax convergence – all in the name of addressing the “critical flaws in the architecture of monetary union.”
What Macron and Gabriel fail to mention is that those same critical flaws were an intended part of the euro’s design from the get-go. The goal was always to crush national sovereignty – and more specifically monetary sovereignty – as a vital stepping stone to attain full-on political union, as the German Prime Minister Joschka Fischer publicly admitted just days after the introduction of the euro in 1999:
The introduction of a common currency is not primarily an economic, but rather a sovereign and thus eminently political act…political union must be our lodestar from now on: it is the logical follow-on from Economic and Monetary Union.
In other words, while euroskeptics in the UK and elsewhere were publicly ridiculed for daring to even suggest that the European project might pose a threat to national sovereignty, European heads of state were publicly – indeed proudly – conceding as much. As Patrick Allen writes, Machiavelli himself would have been proud of the euro’s founding fathers. “They pushed through a policy against considerable opposition aimed at achieving a result that was not about economic union.”
Here’s a perfect case in point, courtesy of former Spanish Prime Minister Felipe Gonzalez:
The single currency is the greatest abandonment of sovereignty since the foundation of the European Community…it is a decision of an essentially political nature. We need this United Europe…we must never forget that the euro is an instrument for this project.
And what a brutally effective, and destructive, instrument it has proven to be! Thanks primarily — though not exclusively — to the single currency, countries like Spain, Portugal and Ireland no longer control their own finances while Greece is a shadow of its former self, a broken nation whose economy is wholly dependent on monetary infusions from the IMF or ECB to pay even the most basic of expenditures.
Taxation Without Representation
Yet even as Greece totters, Spain dithers, Britain demands a referendum on EU membership, and financial pressures continue to build across the continent, the European project gathers pace. The economies must be knitted even closer together, insist Macron and Gabriel, in order to “improve the economic potential of EMU and allow us to establish clearly which policies should be centralized, harmonized or simply coordinated.” What a perfect three-word summation of Brussels’ raison d’être: to harmonize, coordinate and centralize – above all, of course, centralize!
Macron and Gabriel also call for the EU to be able to raise its own revenues, to be collected through the imposition of a common financial transaction tax, as well as a harmonized corporate tax. For the moment, there is no mention of EU income or sales taxes, but surely it’s just a matter of time. As European Commission President Jean Claude Juncker admitted in a rare fit of honesty:
“We (the Commission) decide on something, leave it lying around and wait and see what happens. If no one kicks up a fuss, because most people don’t understand what has been decided, we continue step by step until there is no turning back.”
In other words, public ignorance is vital for the continued success of the EU’s power grab. It’s largely thanks to the widespread lack of public interest in or awareness about Brussels’ real agenda that the EU is able to continue amassing power and influence at the expense of everyone else. Take, for example, the small matter of European fiscal union: why aren’t more European people questioning the acute lack of public representation or institutional accountability in Brussels? After all, the concept of “no taxation without representation” is hardly new!
Staggering as it may seem, in the last 20 years the Commission has not passed a single audit. And now it wants to grant itself tax-raising powers over the citizens of all 28 Member States, or at least the 19 Eurozone nations! As I reported in Death by a Thousand Cuts — The Silent Assassination of European Democracy, so opaque is the state of the Commission’s finances that in 2002 Marta Andreasen, the first ever professional accountant to serve as the Commission’s Chief Accountant, refused to approve the organization’s 2001 accounts, citing concerns that the EU’s accounting system was “open to fraud.” After taking her concerns public, Andreasen was suspended and then later sacked.
The No-Exit Union
According to Macron and Gabriel, the best way of tackling the EU’s accountability deficit would be to appoint a “euro commissioner” (another entirely unelected, largely unaccountable bureaucrat). This commissioner would “embody this stronger Eurozone focusing on fiscal policy but also on growth, investment and job creation.” Yet another example of the gaping gulf between the eurocratic elite’s sugary words and their real intentions.
While Macron and Gabriel wax lyrical about the need to plug the EU’s democratic deficit, not once in their treatise do they mention actually consulting the European people on their ambitious plans to recreate Europe under the aegis of a supranational superstate. Indeed, they deliberately shy away from mentioning treaty change, since it would almost certainly necessitate referendums in the affected nations.
As Macron said in an interview with Le Journal du Dimanche, European people would probably reject a new treaty if asked in a referendum — just as France did almost 10 years ago to this day.
Then, the French people’s feelings were unceremoniously ignored; this time they won’t even be asked. Too much political capital has already been invested in the decades-old European project for it to be jeopardized by the popular will of a single nation. This is particularly true with regard to Eurozone members, as Spain’s Economy Minister (and former Lehman Bros advisor) Luis de Guindos bluntly warned during a recent speech on Greece’s possible exit from the euro:
The Eurozone is a club where you can check in but you cannot check out.
It sounds like the tagline from a horror movie. Unfortunately, in many ways that is what the EU has become. By Don Quijones, Raging Bull-Shit.
The deal in Spain was the mother of all gift horses. But it’s about to topple. Read… Is Goldman About To Lose A Tentacle?