A daily blog on the thrills, spills, and frequent absurdities of the world's one and only 'non-imperial empire' - as Barroso himself called it - the European Union.

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Saturday, 26 March 2011

More money in the EU pot

Has anyone else seen this article on today's al-Jazeera? It's not that popular a news source in the United Kingdom, I'll admit, but when the output of most national newspapers in this country has a less-than-objective eye, for or against the EU, I figured that it was the best place to get up-to-date information.

It's an interesting story. A bunch of smiling, happy heads of state concluded with their comparatively dour finance ministers that the eurozone debt crisis currently blighting the continent can be controlled with a new 'Stability Mechanism,' that, they think, will provide enough leverage for indebted European economies to get back on their own two feet. With the help of their eurozone partners, of course, to whom they will be very grateful. The theory is behind this is typically EU: give us more money and more power, and we'll sort it out. They want to almost double the bailout fund from the current maximum loan capacity of two hundred and sixty-five billion pounds to five hundred billion pounds by 2013.

Britain's contribution is as yet unknown, although it is not the EU's modus operandi to go without tapping one of its three net contributors for money. It's a safe bet that Britain and Germany will bear the lion's share of the spectacular costs involved. But, even if you put aside the massive impact that this will have on the British economy, and thus on the disposable income of each and every one of us, it makes no more sense than the current arrangement.
Other than the staggering amount of money and the permanent availability of it, there is almost no difference, in either theory or practice, between the proposed ESM and the current bailout fund. It is attempting to use the same solutions to solve the same problems, and, logically, it will have the same limitations. It is, simply, another shot at throwing money at something in the hope that it will make it go away. No attempt to solve or even recognise the underlying problem has been made. The euro needs substantial reform if it is not to go the same way as the other unsuccessful attempt at a European single currency, the Latin Monetary Union, which was brought down by a financial crash and debt crisis similar to this one, and, so far, no-one in the eurozone has been brave enough to even propose that the original theory may have been wrong. The course of the eurozone has veered wildly from what its founders intended, and still they stay silent.

Also, as a matter of curiosity, I noted the following paragraph which, as far as I can tell, has been omitted from the editorials of major national newspapers:

'The leaders issued a "term sheet" outlining details of the ESM on Friday which now has to be prepared as a legal text of an amendment to the European Union treaty'

The implications of this, and of its absence from the media, could be the first major example of a European treaty being fundamentally altered without any referendum whatsoever. Even if the EU hasn't accepted the result of a referendum in the last thirty years, it still went to the trouble of holding them. Its ability to not do so now signifies three things:

1) A major step towards authoritarianism. Britain could be forced to take money from its taxpayer's pockets and hand it to the EU, without anyone in Britain - not even the Prime Minister - having a say in the matter.

2) A hint that the EU is losing confidence in its own popularity. The fanatical indifference with which federalist officials have conducted themselves could be creaking under the strain of riots and calls for Communist revolution: but, rather than open up to the public vote, they have completely shut themselves off from it.

3) We have proof that the Lisbon Treaty is self-amending. This means the referendum lock is pointless, and no British government can prevent the EU from doing whatever it wants whilst this country is a member.

It's good news for anti-federalists; but, sadly, bad news for Europe.

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