Germany, France Call for Fiscal and Political Union. Public Ignorance Vital for Success of EU Power Grab

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?

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  10 comments for “Germany, France Call for Fiscal and Political Union. Public Ignorance Vital for Success of EU Power Grab

  1. Debtserf
    Jun 6, 2015 at 5:29 pm

    Norman de Bates, the dissembling EU motel receptionist, makes for a scary split personality He will slash butcher his victims with his blunt rhetoric, whilst insisting that it’s for their own good. If deflation is like cholesterol, then de Guindos is like a cancer of the body politic.

  2. Michael Gorback
    Jun 6, 2015 at 10:30 pm

    Name one country where the voters would agree to fiscal union. They are sick of the euro and Brussels. The eurocrats can continue their little wet dream of United Europe for now but the voters have seen enough of this show already.

    Germany and France together in a fiscal union? No way. You might as well talk about a merger between Google and Berkshire Hathaway.

  3. MattNiem
    Jun 7, 2015 at 7:04 am

    It seems that the EU wants to be the new Jugoslavia, but there is no public support even at the beginning. The end could be just as violent, when the masses shout enough is enough..

  4. Richard
    Jun 7, 2015 at 9:05 am

    This is EXACTLY THE SAME as the American colonies which were corralled into becoming a ‘union’ with the promise that any of them could leave at any time.
    When the south wanted out, they were rewarded with the ‘Civil War’, which had nothing whatever to do with slavery (Lincoln was even a proponent of slavery!) and everything to do with the North reneging on the rights of the individual states to secede.
    This will soon happen in Europe. A move to secede will be met with outside armed aggression. You’ll see….

  5. Mark
    Jun 7, 2015 at 9:31 am

    Just wait till they form the North American Union between Canada, USA and Mexico. Mark my words that day is fast approaching.

    As far as the EU goes Greece will never leave and the EU will only add more bodies to the pile as time moves forward.

  6. unit472
    Jun 7, 2015 at 11:47 am

    It was never any secret that the Maastricht Treaty would make the Euro the means to limit national sovereignty. If debt pooling was politically impossible rules based fiscal policy was meant to make in unnecessary. 60% debt to GDP ratios and limits on fiscal deficits were meant to make national parliaments all play in the same sandbox. Of course they didn’t enforce these limits at first but now, if the Euro is to be preserved, those fiscal rules are essential but getting back a bunch of obese men back into the suits they wore 23 years ago may not be possible.

    In the US we may find ourselves facing the same dilemma. How many US state governments have gone on financial benders and promised pensions they cannot possibly pay. Puerto Rico maybe our mini Greece. Illinois our Spain and Italy our California. Will not the US not have to ‘harmonize’ state tax codes and pension benefits to prevent state governments from requiring federal bailouts and risk breaking up our union?

  7. Julian the Apostate
    Jun 8, 2015 at 5:46 pm

    Richard, your parallel to the Civil War is apt but not entirely correct. The ten years leading up to the war were bitter, and the South started the war by attacking Ft. McHenry, a Federal installation. Perhaps the North could have manufactured a reason, but didn’t need to.
    “Relax said the night man
    we are programmed to receive;
    you can check out any time you like
    but you can never leave.”
    The Eagles, Hotel California

    • Richard
      Jun 8, 2015 at 6:45 pm

      Julian, as you well know the south was “tricked” into starting the war. The north was geared up to fight and all the statements to that effect are freely available for inspection.
      Ten years? Sure but it’s already been at least five in the case of the weaker countries of Europe. It doesn’t HAVE to take ten years, you know. I am surprised you offer such push-back. Who doubts that “Europe” wants ever closer Union? (Except you and the British)

    • d
      Jun 11, 2015 at 10:02 pm

      The Confederacy did not start the Civil war, by attacking Ft. McHenry.

      Hitler did not start WWII, by invading Poland.

      Japan did not start the Nippon American war, by attacking Pearl Harbour.

      These are just the shooting events, that started the shooting parts of those wars, that had been ongoing for some time.

      Interestingly all three alleged aggressors were the victims of political and economic conflict. Waged against them, by the States they entered into military conflict with.

      Poland being the fall-guy in the conflict running since 1919 between france and Germany.

      “That Document guarantees another major war in Europe” Woodrow Wilson, referring to the Versailles DicKtat before it was delivered.

      FDRs oil embargo, just as surely guaranteed war between America and Japan, and was probably instituted with that exact intent.

      The refusal of the north to allow secession contrary to the terms of the original agreement did the same as the previous two cause of wars given.

      The true Aggressor in each case did not start the shooting, they simply forced the shooting situation to occour, then blamed those who struck first, for the ensuing war.

      Gulf of Tonkin anybody??

  8. Dead at 18, Buried at 65.
    Jun 9, 2015 at 2:29 am

    Everyone? I am personally quite happy about the European union – actually. I mean. Look! See, how successful it has been! France does not have Trillions in debts, Spain is solvent, Italy aint broke and Deutsche Bank has not been bailed out by the Federal Reserve; indirectly by the EU Central Bank and German government – several times over; its transactions are completely transparent; and it does not have more debt than the whole of Europe combined times four – and still getting larger!

    Only two of the twenty six EU countries were given democratic votes to join, and just look at how bustling, vibrant and productive our economies now are? I really could not have asked for any better.

    I remember watching all of the many documentaries warning us of the potential problems of a political and fiscal union in the EU, and they were all ignored! Yet, the critical points which each documentary made then were proven to be all true.

    I will tell you all why I am still very, very happy. If the EU has proven itself to be a complete disaster. – Which it is! And, if all these EU/Euro bureaucrats cannot get the basic fundamentals right, then how are they going to get any further success by doing even more of the same?

    We readers do recognise that there are some people who never listen to knowledge; who fly in the face of wisdom; and who never learn from their mistakes; who always wonder why it is that they are always irreparably broken.

    So, if this is seen and with the most dubious characters in our lives, then how are the EU bureaucrats being any different?

    Some people

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