by Ambrose Evans-Pritchard: Greece,
the Euro, and the BattleofJutland
Just when you
thought the EU could not go any further down the road towards authoritarian
excess, it gets worse.
Commission is calling for EU powers to vet budgets of the 27 member
states before the draft laws have been presented to the House of
Commons, the Tweede Kamer, the Folketing, the Bundestag, the Assemblee
Nationale, or other national parliaments. It applies to Britain
even though we are not in EMU.
and EU finance ministers will pass judgement on the British (or
Dutch, or Danish, or French) budgets before the elected bodies of
these ancient and sovereign nations have seen the proposals. Did
we not we not fight the English Civil War and kill a king over such
Yet again we
are discovering the trick played on our democracies by Europe’s
insiders when they charged ahead with EMU, brushing aside warnings
by their own staff economists that monetary union was unworkable
without fiscal union. Jacques Delors knew perfectly well that this
would lead inevitably to a crisis, but it would be the “beneficial
crisis” that would force sovereign parliaments to submit to
demands that they would never otherwise accept.
This is now
playing out before our eyes. Club Med governments have built up
€7 trillion sovereign debt under the cover of monetary union,
which shut down the warning signals for borrowers and creditors
alike. We are now near – or beyond – the point of no return.
Eurozone states must go along with this cynical entrapment, or risk
economic catastrophe. The conspirators have succeeded. The €750bn
shock and awe package agreed over the weekend clearly alters the
character of the European Project, crossing the line towards an
EU debt union and an EU Treasury. How long will it be now before
the EU acquires direct tax-raising powers?
As French president
Nicolas Sarkozy said: “We have a veritable economic government”.
I hope the excellent and proud French people realise what this means
before it is too late, as it is for the Greek, Irish, Portuguese,
and Spanish peoples. They are being forced by the logic of the economic
machine to squeeze fiscal policy at a time when they are either
in recession or trapped in a deeper perma-slump without offsetting
stimulus. A Deutsche Bank note to clients said these countries have
given up all three instruments of economic control: fiscal, monetary,
and exchange. They are powerless. We are under an “EU protectorate”,
said Spain’s opposition leader Mariano Rajoy last week, though
it was empty, useless rhetoric since he does not draw any of the
necessary conclusions from this intolerable state of affairs.
Mr Barroso wants EU powers to monitor current account deficits and
credit growth – under pain of sanctions – in order to
stop booms running out of control. “We must get to the root
of the problems,” he said.
one-sided this is. The entire adjustment burden falls on the people
of the Club Med states – including his own nation, Portugal
– though they are already trapped in debt-deflation. There
is no recognition that the EMU system itself is fundamentally dysfunctional
because the euro was painted on a cultural canopy that cannot possibly
be deemed an “optimal currency area”, nor that these countries
have been grossly violated by the entirely predictable – and
predicted – perversions of EMU.
There is no
hint that intrusive EU surveillance powers should be used to compel
Germany to increase spending and tolerate higher inflation so that
the EU’s North-South divide can be bridged by the both camps
meeting each other half way. All responses are tilted in one direction:
deflation, fiscal austerity. This is the Gold Bloc fallacy of Continental
Europe from 1931 to 1936, the policy that led to Bruning’s
destruction of Weimar, Laval’s near destruction of the Third
Republic in France with his deflation decrees. It was a precursor
to Laval’s fateful role as the Nazi enforcer of Vichy. He was
later executed by firing squad, vomitting from a botched suicide