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Actual Politics, Economy and Finance, Foreign relations and security, Social Cohesion

British Hard Talks: A new Europe must be built on the ruins of the old

 

 

 

 

 

 

 

The British Empire in 1919.

A new Europe must be built on the ruins of the old

I am honestly shocked by this article:

Only a redrafted constitution will revive the EU: there could be no worse end to this saga than imposition of German ‘discipline’

Author: Simon Jenkins guardian.co.uk, Published: Thursday 10 November 2011 21.30 GMT Article history Illustration by Satoshi Kambayashi

This is the way the world ends, not with a bang but a cliche. Crisis spirals out of control and Armageddon moves to the brink of abyss. “Europe” is too big to fail yet too big to succeed. Each newscast is a crash course in economics, each headline an incitement to suicide. But since we are not at war and few understand what is going on, the rest cannot believe it. As if watching the fall of Icarus, they sense the gods are angry but return quietly to the plough.

This week the European backwash of the crash of 2008 moved way beyond high finance. Economics may have pushed politics to the wall, but in Greece, Italy and, more important, Germany, politics is hitting back, hard. Yelling, spitting and choking with frustration, it has had enough of economics, and has beaten it to the ground. Yesterday it claimed its first scalp, demanding a new ruler of Greece.

There is no point in European Union acolytes loftily opining that “it was a pity” Greece was admitted to the euro. It was more than a pity, it was a crime. There is no point in bewailing the reluctance of Germans to bail out Greeks or Latins, or let their bankers print billions of cash. There is no point in hectoring or dreaming. A 50-year fiction is over. As often before in history, a new Europe must be built on the ruins of the old, and we had better get used to it.

It is a massive irony that old Europe’s last gasp should be to seek the very outcome it sought in the 1950s to avoid, German supremacy. The one thing on which I agree with my colleague, Timothy Garton Ash, on Comment is freeyesterday, is that “if the eurozone is saved, it will be as a fiscal union on largely German terms”. Substitute the word political for fiscal, as honesty dictates, and we are back to the ghoulish first half of the 20th century. European union is always on someone’s “terms”, and they rarely have much to do with consent.

There is one difference today. Garton Ash may want “the kind of budget, debt and wage discipline [Germany] has practised with such impressive results over the last decade, and now seeks for the whole eurozone”. It may be “precisely what Europe needs”. But what Europe needs does not embrace the enforcement of what Germany would like to see.

We might have said the same of the British empire in its heyday, that British discipline was “what the peoples of India and Africa” needed. We could mow them down when they disagreed. Germany has no panzer divisions, nor does it desire to dominate Europe politically, and without that desire there is no means of enforcement. The implied German supremacism of the EU’s last-ditchers, under the euphemism of “fiscal union”, is archaic, elitist, dangerous and mercifully impossible.

The paradox is that this impossibility is to the credit of the postwar European movement itself. It has achieved what it set out to do, to liberate the nations of Europe from fear of German overlord-ship. This liberation has allowed France to walk proud, Britain to enjoy semi-detachment, Scandinavia to think for itself and middle Europe to breathe free. The EU lobby may have cobbled together institutions for a united states of Europe, but it was a fool’s errand, and one that could only play into the hands of German revanchism.

The tragedy is that the chosen vehicle of European union should have been a common currency. This ostensibly innocent tool is a weapon of mass economic destruction. It has imposed its clammy grip on divergent national economies, forcing hundreds of thousands of workers and their families to flee the “overvalued” countries of east and south Europe to seek work in the north. Others were kept at home only by government jobs funded by reckless foreign indebtedness. The reason was not just the fixing of the value of the euro to the Deutschmark, but the fixing of any weak currencies inflexibly to stronger ones. The resource cost of the euro over the past two decades must have been stupendous.

A common currency as a means of imposing wage or fiscal discipline on uncompetitive states is a crude economic sanction. As with all sanctions, it corrupts and distorts domestic politics and makes electorates hostile to external pressure. To Eurocrats this hostility, like democracy itself, is a little local difficulty. But sooner or later, push comes to shove. Greeks and Italians are toppling leaders who fail to listen to them, and voters in Germany are threatening likewise. European political union, the universalist dream of visionaries, has met its Waterloo.

Some confederacies have worked, such as the US, India and the United Kingdom (so far). But the EU was always a confection of elitist diplomacy, supported by Europe’s peoples only for as long as they thought it would bring them money. It sought to craft a political entity from cultures whose differences have defied Hapsburgs, Bourbons, Napoleon and Hitler alike. Political union is a discredited orthodoxy and its advocates should retreat gracefully.

The sensible route forward is not underpinning the euro at some new and temporary frontier, and “kicking the can down the street”. It is for those states that sincerely wish to merge their political institutions with their neighbours – there must be precious few – to find common ground within the euro.

Countries in southern Europe must recover their economic separateness and their political souls, writing off debts and devaluing their currencies, as Britain has done. Then Europe can find a new equilibrium. Metaphors of “two-speed” Europe, inner and outer clubs, and trains or planes being missed are meaningless. Nicolas Sarkozy and Angela Merkel are right, as is David Cameron. A new and more flexible constitution for Europe is blatantly needed.

This constitution will be easier to define than to engineer. It must somehow retain the (overrated) gains of free trade, but accept that there will be many unlevel playing fields. The German Reichstag or Bundesbank cannot legislate for Greek labour laws, Italian opening hours or British tax havens. The currencies of less competitive states must float. The lash of devaluation and domestic austerity is one thing when self-imposed. When edicts emanate from unaccountable foreign agencies, as now in Greece and Italy, it is not. There could be no more disastrous last chapter to this sorry saga than the crude imposition of German “discipline” on the weaker members of the EU. Who would enforce it?

Europe is a continent, not a panacea. It can no longer be seen as an ideological construct, whose adherents treat all challenge as an offence against infallibility. Historically, its strength has been its diversity, a high street not a hypermarket of nationalisms. Each time a centralised power has denied this and struggled to impose “union”, the outcome has been catastrophe, followed by the need to restore and reassert the sovereignty of nations. This time round, the catastrophe has remained economic. It could yet be a near-run thing.

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Very strong, hard British words. Is is really so bad or will be so bad? Or it is just the usual historical British conservatism which oppose and obstruct?

Have a look to some of the comments. (This is only the first page all together until now 444 comments.) Read them! Interesting. 🙂 Like  a snapshot of folk’s social attitudes. Or distorting mirror…?

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CigarLover

10 November 2011 9:35PM

A new Europe must be built on the ruins of the old

That’s right.

One not driven by Socialism and Bureaucracy but democracy and free trade and less regulated.

The Euro has been a failure, while a great idea in principle it has ignored the role of democracy in the process. For that reason it will fail as we are seeing.

I would like to see a return to governance by nation states, and just a free trade deal signed by members instead of a supra national bureaucracy micro managing our lives.

Europe is not the same as the EU.
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CigarLover

10 November 2011 9:37PM

This constitution will be easier to define than to engineer. It must somehow retain the (overrated) gains of free trade, but accept that there will be many unlevel playing fields.

There can never be a level playing field, and never has been.

If Italy wants to subsidise Ferrari with taxpayer money, well let them do it. It means a cheaper Ferrari for me and higher taxes for Italian taxpayers.

Subsidising your industries with taxpayer money is not any more sensible than shooting your own foot.
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zapthecrap

10 November 2011 9:37PM

German discipline is never a good idea.
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CigarLover

10 November 2011 9:40PM

A common currency as a means of imposing wage or fiscal discipline on uncompetitive states is a crude economic sanction

No the currency is not that important.

What is important is trying to impose a level playing field with regards to regulations on economies that are not in the same boat.

Germany can perhaps cope with higher regulatory costs as its productivity is higher, Greece can’t. Greece needs deregulation to compete.

The level playing field only benefits countries that already have an advantage.
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poppy23

10 November 2011 9:45PM

Belgium has no government

Greek democracy is dictated in Berlin

Spain has eye watering levels of youth unemployment

Italian debt is 120% of its GDP

Tax evasion is rife across the Union

The EU’s auditors haven’t ever given the accounts a clean bill of health

Germany and the Netherlands are running masive supluses on the back of misery in Europe’s periphery

And we fear being left out of this club?
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Arapas

10 November 2011 9:47PM

A new Europe must be built on the ruins of the old

Charles De Gaulle ( You know, that French fellow that did not want the UK anywhere near the EEU !) must be revving like a racing car’s engine in his grave !
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CigarLover

10 November 2011 9:47PM

Some confederacies have worked, such as the US, India and the United Kingdom (so far). But the EU was always a confection of elitist diplomacy, supported by Europe’s peoples only for as long as they thought it would bring them money.

How is the UK a confederacy? The UK has one the most centralised form of governments in the western world (say pre devolution to Scotland and Wales) ??

The longest lasting and most stable confederacy is which you have ignored : Switzerland.
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Strummered

10 November 2011 9:47PM

Europe is a work in progress, always has been – Maybe it needed this wake-up call in order to put it’s house in order. I’m trying to think of positives, this constant barrage of doom is rather depressing.
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ABOCbKA

10 November 2011 9:51PM

1) Get rid of Euro;

2) Get rid of subsidies;

3) Get the Southern and Central/Eastern Europe to be responsible for their own destiny; and

4) Get free traiding again…
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JFBridge

10 November 2011 9:56PM

The fact that the Germans are the largest economy in the EU and have been little affected by the debt crisis means it’s inevitable that they are taking the lead at present.But it’s not neccesarily a New Europe needed but a new consensus.From Italy to Ireland,Portugal to Spain,Greece to the UK,various political parties and their leaders put irrational faith in an over-reliance on Free-market neo-liberalism in it’s economic thinking,whereas Germany and the Scandinavian nations (with the exception of debt-battered Iceland) kept faith with a mixed,Social Market,Social Democrat economic consensus.We don’t have to be literally ruled over by Germany in a New Europe,but fiscal and economic discipline German-style is a lesson that certainly needs to be learned.
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CigarLover

10 November 2011 9:56PM

Historically, its strength has been its diversity, a high street not a hypermarket of nationalisms. Each time a centralised power has denied this and struggled to impose “union”, the outcome has been catastrophe, followed by the need to restore and reassert the sovereignty of nations. This time round, the catastrophe has remained economic. It could yet be a near-run thing.

Yes, the last time Germany tried to impose a Union by force (Hitler) and we all know how that ended?

Europeans will not and have not been enslaved by a foreign power, and the EU will fail because of that.

One of the main reasons for Europe’s success over hundreds of years has been the inability to impose too high taxes or regulations by nation states without seeing business move to a neighbouring European nation.
The EU ignores this basic principle.
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ContraryGit

10 November 2011 9:57PM
Response to CigarLover, 10 November 2011 9:35PM

That’s right.

One not driven by Socialism and Bureaucracy but democracy and free trade and less regulated.

You think Europe is socialist? Really? … REALLY?
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Strummered

10 November 2011 9:57PM
Response to zapthecrap, 10 November 2011 9:37PM

Not imposed on others, no…..But taking a leaf out of their book and showing a bit of self discipline wouldn’t hurt many countries.
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CigarLover

10 November 2011 9:59PM
Response to ContraryGit, 10 November 2011 9:57PM

You think Europe is socialist? Really? … REALLY?

Firstly Europe is not the EU.

If your question is whether the EU is Socialist – then yes, it is a coalition. And some of the interests are Socialist.
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thegreatfatsby

10 November 2011 10:02PM

Greece has nothing to compete with.

They import the vast majority of the food they consume, which if they deregulate will become much more expensive. Their wages will drop again. They produce and export precious little. We are where we are and it is useless to stand on self- righteous little National soapboxes on such a tiny planet apportioning blame. The ship is on fire. We are all on it. How the fire started is not now the fucking problem.
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CigarLover

10 November 2011 10:02PM
Response to ContraryGit, 10 November 2011 9:57PM

You think Europe is socialist? Really? … REALLY?

Unless you think it is a great Capitalist policy to impose a Financial Transactions Tax (FTT) ??
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ContraryGit

10 November 2011 10:05PM
Response to CigarLover, 10 November 2011 9:59PM

If your question is whether the EU is Socialist – then yes, it is a coalition. And some of the interests are Socialist.

Whether or not something is a coalition has no relevance to whether or not it is socialist.
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teaandchocolate

10 November 2011 10:06PM
Response to CigarLover, 10 November 2011 9:35PM

O

ne not driven by Socialism and Bureaucracy but democracy and free trade and less regulated.

What is this hokum? The Eurozone was broken by a free market and zero regulation on banks.

Trust me, if Europeans had anything near democracy, they would say NO to neoliberalism and extreme capitalism and YES to bank regulation and democratic socialism.
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CigarLover

10 November 2011 10:07PM
Response to ContraryGit, 10 November 2011 10:05PM

Whether or not something is a coalition has no relevance to whether or not it is socialist.

To have a coalition with Socialists, you need to throw at them some Socialist policies.
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ContraryGit

10 November 2011 10:08PM
Response to CigarLover, 10 November 2011 10:02PM

Unless you think it is a great Capitalist policy to impose a Financial Transactions Tax (FTT) ??

Keynes seemed to think so.
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teaandchocolate

10 November 2011 10:10PM

A new Europe must be built on the ruins of the old

Yes, and it will be, because evryone remembers the Europe we had before: a nationalistic, right-wing, war mongering, sniping mess. It’s going back that way now.
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CigarLover

10 November 2011 10:10PM
Response to ContraryGit, 10 November 2011 10:08PM

Keynes seemed to think so.

Keynes was a Socialist / Fascist.

Benito Mussolini was a big fan of him.
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CigarLover

10 November 2011 10:12PM
Response to teaandchocolate, 10 November 2011 10:06PM

Trust me, if Europeans had anything near democracy, they would say NO to neoliberalism and extreme capitalism and YES to bank regulation and democratic socialism.

Only if you consider the pros without the cons (business leaving to a neighbouring european country).

That’s what kept Europe in check for hundreds of years. With the EU, less competitive countries couldn’t deregulate to compete.
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taxedtothelimit

10 November 2011 10:13PM

What Europe needs is flexibility at the moment only the inner core members are suited to full on union.
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ragadowblay

10 November 2011 10:13PM

The reason was not just the fixing of the value of the euro to the Deutschmark, but the fixing of any weak currencies inflexibly to stronger ones. The resource cost of the euro over the past two decades must have been stupendous.

This ultimately is, and has been, the problem with Euro; to bring all economies in line, within acceptable criteria and parameters, in order for their admission into the Euro, those weaker economies had to be propped up…the cost of doing that was phenomenal…entire countries – i.e. Ireland, Greece, Portugal – were brought up to the apparent same standard of living as Germany and France…

…and no one batted an eye-lid…

…I’m a believer needing strong ties within some Pan-Euorpean context, but we should’a done better…
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JLengeler

10 November 2011 10:14PM

This article is bordering on the hysterical, its historical references are all flawed, and at times it is outright insulting. There is no German “Reichstag” , except as a building.
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jolyonwagg1

10 November 2011 10:15PM

The north of Europe as lost patience with the south of Europe, that is the simple truth of the matter. You can help a friend out by writing a cheque, but what happens when the friend just expects more cash cheques, and looks like as if he as very little intention to pay any of the money back? Merkel knows this, as do the German tax payers, and they have had enough.

A widespread problem within southern EU economies is the rigid employment laws that discourage employers from taking on any new staff even if there business was expanding, together with a trade union mentality that is frozen in a 1970′s time warp resisting any form of change to out dated employment laws. Brussels and the EU elite are so obsessed with building the ‘new social Europe’ that they have forgotten we live in a global competitive world market. Asia is on the rise, while Europe navel gaze’s over EU treaty changes. Giving mothers and fathers lots of rights etc does not help the small employer who is left short handed when they take extended leave.

Barosso and VanRompuy need to wake up to the new world order if the euro is to survive? The euro is fast dropping down the scale of world currencies?
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ContraryGit

10 November 2011 10:16PM
Response to CigarLover, 10 November 2011 10:10PM

Keynes was a Socialist / Fascist.

Benito Mussolini was a big fan of him.

There’s a not-too-subtle difference between socialism and fascism. Mussolini was a fascist who hated socialism.

Keynes (I don’t know whether he was a fascist or not) has been regarded by many though as the saviour of capitalism.
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ragadowblay

10 November 2011 10:17PM
Response to teaandchocolate, 10 November 2011 10:06PM

ne not driven by Socialism and Bureaucracy but democracy and free trade and less regulated.

What is this hokum? The Eurozone was broken by a free market and zero regulation on banks

Agree completely…

These people cannot accept the reality that does more than just stare them in the face…it’s kicking them in the ass, and they still won’t believe it…
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dongerdo

10 November 2011 10:18PM
Response to JLengeler, 10 November 2011 10:14PM

Especially the undertone of the germans wanting to rule the continent out of some sense of supremacy is simply insulting….
This piece could have been written in the 40s – It’s just appaling
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teaandchocolate

10 November 2011 10:18PM
Response to CigarLover, 10 November 2011 10:12PM

Times are changing, and Neoliberalism has failed us all. Why replace a failed model with the same failed model. It’s madness.
Neoliberalism is not democratic. It’s got to stop.
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CigarLover

10 November 2011 10:18PM
Response to ContraryGit, 10 November 2011 10:16PM

Keynes (I don’t know whether he was a fascist or not) has been regarded by many though as the saviour of capitalism.

I would suggest he was the founding father of Socialism in the UK for starters – e.g after WW2.

He was essentially a shill for more government control and spending, hence favoured by the establishment who benefit from such policies.
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CrepuscularMutant

10 November 2011 10:24PM

So; Europe is going down the pan, the borders are heading back up and the Eurosceptics are creaming their pants with “I told you so’s”.

How very fucking depressing.

Someone please wake me up when its all over. Say 2017…
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JLengeler

10 November 2011 10:25PM
Response to dongerdo, 10 November 2011 10:18PM

I suppose he is just repeating what is being said in the corridors of Whitehall. Which is even more worrying.
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JLengeler

10 November 2011 10:30PM

And yet those so-called experts in Whitehall, Fleet Street and the City are misreading the situation completely. They think the European dream is over – but the French and Germans are stubborn. We have survived far worse in our history. We’ll find a way to sort out this mess, too.
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CigarLover

10 November 2011 10:31PM
Response to teaandchocolate, 10 November 2011 10:18PM

Times are changing, and Neoliberalism has failed us all. Why replace a failed model with the same failed model. It’s madness.

We have had too little neoliberalism, and too much crony capitalism. That’s where our problems lie.

Lets deregulate Paris, Frankfurt, Milan, Amsterdam all to match the City of London in competiveness. That’s the way we can solve the EU crisis.

Lets go back to what made all those cities great in the first place!
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teaandchocolate

10 November 2011 10:35PM

This comment was removed by a moderator because it didn’t abide by our community standards. Replies may also be deleted. For more detail see our FAQs.
dongerdo

10 November 2011 10:37PM
Response to JLengeler, 10 November 2011 10:25PM

It’s like Michael White wrote yesterday

If Britain ever needs friends and allies abroad again, perhaps in an unplanned financial crisis, I hope they’ve got a few in their back pockets. But who?

The eurosceptics might be right about the failiure of the euro. But Mister Jenkins should consider one thing – they might be wrong.
With every day passing more bad blood between GB and the continent builds up and people like Jenkins are thriving on it (Camerons lecutirng the G20 participants didn’t quite help either). Don’t be fooled for one second that this will be forgotten.

Germany is moving for closer bonds with the BRIC states for years now, France is also reevaluating her alliances and the glorious assumption of the eurosceptics, that a failiure of the Euro/ redesign of the EU itself would naturally lead to a free trade zone with GB as equal partner, might very well prove to be very, very wrong….

I am honestly shocked by this article
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Whinemerchant

10 November 2011 10:38PM
Response to JLengeler, 10 November 2011 10:14PM

I am glad that someone else thinks this. I thought for a moment it was just me.
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lckf

10 November 2011 10:41PM

I am honestly shocked by this article

Why? The average Europhobe never moved away from their Edwardian jerry-hating mentality. Simon Jenkins or Simon Heffer, makes no difference. Hating the Germans is becoming en vogue again.
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zapthecrap

10 November 2011 10:41PM
Response to Strummered, 10 November 2011 9:57PM

German discipline aimed at the markets and spivs but not the poor.
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Scipio1

10 November 2011 10:44PM

So it’s back to a multi-currency europe complete with inflation, competitive devaluations, trade and currency wars. All the things the euro was designed to prevent. The thing about currency wars is that the winner will be the one who succeeds in making themselves poorest. See James Rickards – Currency Wars You think you’ve seen austerity, you aint seen nothing yet.

Unquestionably, currency wars will be the next phase of the global crisis as each nation tries to dump its problems on its neighbours. This an other types of protectionism will feature in a run-up to a possible shooting war. Ah, yes what joy is the end of the euro. But of course the markets will love it, as currency and exchange rate chaos offer rich speculative opportunities for making money out of chaos.

The only victors here, and this will become apparent in due course are the bond, forex and derivative markets. You think the EU is neo-liberal, believe me you ain’t seen nothing yet.
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dongerdo

10 November 2011 10:44PM
Response to lckf, 10 November 2011 10:41PM

Sure, but the openness and naturalness to which extent this starts to drench most major newspapers all over europe is appaling….
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lckf

10 November 2011 10:48PM

So it’s back to a multi-currency europe complete with inflation, competitive devaluations, trade and currency wars.

Without the Euro, there will only be one currency, the D-Mark, and any number of satellite currencies pegged to it. The economic imperative that Eurosceptics seem to be so fond of is evident. The gravity well of German economic clout will draw first smaller neighbours into its orbit, from Holland, Denmark, Austria to the Czech Republic and Poland, and then wider to France, Spain, Italy and the UK. There’s only a choice between sharing sovereignty over currency on a multi-national ECB board, or waiting for the fax from the Bundesbank.
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JLengeler

10 November 2011 10:49PM
Response to dongerdo, 10 November 2011 10:37PM

The Euro should have come as a result of deeper integration, not as the vehicle to achieve it. That was a grave mistake but there is no point in crying over spilt milk. We need to find a solution, not culprits.
I find it rather sad that Whitehall is yet again failing to grasp this chance. For decades now they have always complained about the Franco-German axis. Yet when the golden opportunity arrives to influence events in a constructive way and become a valued partner, all they can offer is phrases that could have been taken from a 19th-century history book on Empire and the Napoleonic Wars.
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penruddock

10 November 2011 10:49PM

According to Simon, “A new and more flexible constitution for Europe is blatantly needed”

Is it really? What’s wrong with the existing 27 constitutions? Why not forget a pan-European constitution altogether and revert to Europe as a loose association of independent states? The Treaty of Lisbon has been a failure and is openly breached in one form or another nearly every day. Why should any other EU treaty be any more successful? Better to return to basics and start again, but with no over-arching treaties and with far less wild and irresponsible ambition.
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lckf

10 November 2011 10:50PM
Response to dongerdo, 10 November 2011 10:44PM

I suppose one wouldn’t expect this from the Guardian but people like Kettle and Jenkins are elderly and, therefore, a trend towards conservatism and fear of foreigners is to be expected, I suppose.
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paulywarlydoodle

10 November 2011 10:53PM
Response to CigarLover, 10 November 2011 10:31PM

Are you mad? where have you been for the last five years , deregulation has led to wordwide economic meltdown and hardship for millions of people, unregulated financial centres in London and Wall Street have caused a disaster like a tsunami, now we are in credit crunch part two, people do not need volatility, they need a stable envronment to raise children and not be subject to market forces caused by mad economic theories.
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BobTheCobra

10 November 2011 10:56PM
Response to CrepuscularMutant, 10 November 2011 10:24PM

FIrst,

Europe =/= the EU

No-one, even us Sceptics, are happy about this

Try 2021
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CigarLover

10 November 2011 10:57PM
Response to paulywarlydoodle, 10 November 2011 10:53PM

people do not need volatility, they need a stable envronment to raise children and not be subject to market forces caused by mad economic theories.

Most of the volatility is caused by speculation on what governments and central banks would do next.
New regulations, QE, interest rate policies, EU bailouts, Financial transaction taxes, etc.

If we put all those concerns to rest, we can get back to rebuilding a sound economy again.

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About Laszlo Keki

I am from Hungary (EU) European Journalist, Bl. Writing about today's EU political, social, economical issues, environmental challenges, climate change and environmental protection. Awards: European Journalism Centre TH!NK4: Climate Change and TH!NK5: Water blogging competition winner. Diplomas: General Chemistry Technology, Communication, Marketing. International Relations Job: international trading. I am living near Budapest in a small peaceful, green village. Love: life, garden, arts, water, forests, good climate, good food, clean water, clean air, journalism, sciences, modern technology, people, history and the social studies.

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