Will the European Union Survive?

The Trillion EURO question is.....was the under construction of the foundation caused by idiocy, or was it rather done on purpose with the expectation that down the road the masses could be coerced by crisis to agree to become the united states of Europe?

I submit that the European Ruling Class is governing outside the consent of the people as well as outside of the law. We know how that scheme ends 99 times out of 100 in societies were the masses think that they run a democratic government.

Is there a pan European ruling class? I don't think so. The political & economic contradictions Europe now faces are neither unique nor unusual. Europe has covered a lot of ground in achieving the degree of union it has achieved to date, and defied centuries of history in doing so. Now a number of political issues that were bypassed in several ways in their race towards union have come back to bite them. All this was brought to the fore by a rather world-wide economic crisis.

However, Europe isn't alone in having to face some fundamental political & economic challenges. India is partly stuck in a web of internal economic protectionism and bureaucratic sclerosis that is inhibiting economic growth. Russia in in a political morass which is hindering its economic development past exporting raw materials. China is finding economic and political difficulties in sustaining the rapid economic growth required to quiet potential political discord. Ahead lies a significant demographic shift which will likely complicate things significantly. The U.S. is stuck in a political impasse coupled with decreased economic performance and the contradictions associated with taking on a social welfare model that has contributed to economic sclerosis in other countries where it has been applied.

There are lots of political & economic challenges out there.

So far as I know only the EU leadership is trying to rub out a lot of nations to make one giant nation. The people might have a problem with that, and certainly need to ratify the transformation . The core issues are not economic challenges (which you are right, are all over) , they are about identity, and who gets to control destiny. Do the markets get to impose their will? Did earlier EU leaders scam the people, lead them down the primrose from the beginning expecting that the strong arm of the global economy would eventually force the people to agree to disband their beloved nations and national identities but none the less they spent decades whispering sweet nothings and handing out candy?

You have massively missed the boat on what I was talking about.

Not at all. The only difference here is that you apparently believe the leaders of the European movement were necessarily acting in bad faith and knowingly creating the conditions for an eventual crisis.

In the first place you cannot possibly know their real motives. In the second, history teaches us that generally well-intentioned leaders do indeed often fail to forsee the side effects of actions they take, or simply assume they can work out unresolves issues in time to avoid a problem. Sometimes things work out: sometimes they don't.

Well, the strains affecting the European Union are continuing. The multiple distinct sets of pan European organizations ranging from the Shengen (sp?) travel union, to the EU, and the EUROZONE, etc. create added complexities for attempts to resolve elements of the current financial crisis. Adding centralized political & economic power to EU governance appears to be a beneficial remedy for the EUROZONE, but is resisted by other EU member states not using the EURO. In addition the more varied political and economic interests of the 27 member states have affected the self-interest of some core EU states in the Union itself. France and the UK come to mind here.

It is interesting also to speculate about the general economic competitiveness of the Western World relative to the new competition from emerging exonomies in Asia and South America. Will we be able to retain the economic dominance we have enjoyed for the last century? Will we indeed be able to maintain our current relative standard of living? In particular, in view of the demographic changes affecting the Western world, will we be able to sustain the social welfare models to which we have become accustomed? Some European states, notably Greece, provide vivid examples of the social and political difficulties attendant to reducing it, even in the face of overwhelming facts. Similar, though less severe, challenges also exist for Spain, Italy, and even France. In this context the "new" EU economies in Central Europe likely have a different perspective from those of the most severely affected ones in the West.

Europe increasingly appears to be in an economic situation which requires increasing political integration and loss of sovereignty, precisely at a moment in which the popular desire for it is much reduced.

It's all very complicated to talk about a different continent than the USA North America, isn't it? But since we have got 47 independent countries here instead of one USA (or 23 countries in North America) ... it's not so easy ....

Well said.

I've never implied that anything about the European Union was simple. Instead, it is a rather amazing reaction to centuries of history in which Europe was dominated by three or four contending major powers, while conrinuing life in a political map that more often than not widely contradicted the linguistic and culrural maps on which it was loosely based. I think today's "EU crisis" should be evaluated in terms of a larger crisis of the Western World of which it is the major part. Moreover I suspect the complexities and difficultiues are only weakly dependent on the numbers of players involved. The challenges ahead exist on both continents, and those in the Americas, are no less complex (and difficult) than those in Europe, though they may, at the momen,t appear less immediate.

That's what I meant: Europe isn't just the EU, there are 26 more countries ...

Perhaps so. However just the much smaller number of EUROZONE countries are having a great deal of trouble right now. The complexities of their association with other EU countries that don't use the EURO complicate the solution of the problems at hand, but, even without that issue, they remain intractable.

In short, I don't believe the real difficulty in Europe is very much dependent on the greater number of political players involved. Instead, it is the problems themselves that are intractable, even for a single nation in Europe or America. Can Europe sustain the protective (for those with a job) labor market regiulations and the extensive social welfare systems it currently enjoys in the face of the combination of increasing foreign economic and continuing demographic change, involving fewer and fewer workers supporting more and more beneficiaries and government bureaucrats. I believe the ansewr is that it cannot.

You might be correct ...

What I find most remarkable is that, in separate and disjoint events over the past 15 years, both Sweden and Germany, in the face of growing competitiveness and public debt issues, instituted reforms of their labor markets and social welfare policies that appear to have been very successful in improving their situations while, at the same time, preserving both popular acceptance and the critical parts of their social welfare systems. (In Germany's case the reforms were instituted by former Chancellor Schroeder - a political figure whose other policies I generally disliked) . In perhaps somewhat analogous transformations some of former Soviet Block nations (The Baltic States and Poland come to mind here) appear to be successfully managing growing capitalist economies. Why then did other European Stated find so much difficulty in taking similar preventive actions ?

The current crisis is compounded by the combination of too much public debt and poor economic competitiveness - a particularly unhappy combination that limits otherwise effective compensating actions. It isn't yet clear that the most affected European states will react in thime to stave off additional setbacks. My concern is that we in the U.S. appear to be imitating the actions of our most foolish European friends.

What I find most remarkable and astonishing is that Germany adopted in 1990 from one day to the other 17 million new members in the social security programs and health insurances ... who hadn't paid a single cent to support those insurances before the 2nd of October 1990 but who got rights from those from the 3rd of October onwards.

I've never heard that it did harm to these programs and/or the health insurance companies...

I assume you are talking about events surrounding reunification. I suspect the Social security effect was small in comparison to the effect of valuing the GDR currency on a par with the Mark. In any event those were, though very large, one-time events, which as a result are easier to recover from than the often hidden effects of continuing problems. Still the cumulative effects may well have contributed to some of the issues Helmut Schroeder had to deal with a decade later.

Yes, I did.

It's Helmut Schmidt [or Helmut Kohl] but Gerhard Schröder .

Well, you're right. It was probably so difficult to change my opinion of him that I substituted the first name of his predecessor.

It may be time to revisit this question. Has the ongoing Euro crisis opened up long term fissures in the relations between the northern and southern tiers of this union?

The financial crisis has driven home the latent vulnerabilities built in to the aomewhat ambiguous relationships between the governing or political power of the EU administration and that of the still sovereign member states. In some respects the EU apparatus has shown itself to be creative and adaptable in dealing with the financial crisis, but in others apparently deeper divisions appear to be emerging among the member states. The bonds between France and Germany appear to be strained as do those among Britain and all the major EU powers. Importantly no one appears to be stepping up to the underlying causes of the economic sclerosis currently affecting Europe (and to only a slightly lesser extent, the U.S.), and the public policy factors that are holding back recovery.

Though Germany has taken most of the resentment of the economically vulnerable states for its prudence and insistence on national responsibility, I strongly suspect that France, the Netherlands, Belgium and other Euro area states quietly applaud their actions, and do so happily in Germany's shadow.

The core political issue remains. Will the EU states willingly put themselves on a path to real political union, through democratic means (not just adminisstratively executed treaties) ? o far this now appears to be a much more distant prospect than it did a few years ago.

lets revisit the idea that it might be the Germans who end it.....they are the last lender of last resort standing and what do the get for their generosity but a lot of hate? besides, this was supposed to be a franco/german project but the French economy is a basket case and they are now broke like everyone else. i dont see the german people as being willing to go down with the ship WHILE being hated for the act.

Conceivable, but I seriously doubt it. Germany has invested a great deal in its pan European identity, and the symbolic meaning of such a move would be a profound change to their relations with their European neighbors over the past 60 years. I think they would go a long way to avoid such a change with all the implications it entails.

Moreover, on a purely economic basis, Germany sustains a very successful export economy, and her principal export market is to other European (i.e. EU) nations. Germany has adapted very well to the common currency, accepting a slightly lower value for its Euro currency in exchange for unlimited access on a uniform monetary basis to its principal export markets. It thereby gets a lot out of the EU, and would, I believe, be hurt economically by departing from it.

Meanwhile the German government does all it can to manage the current banking and fiscal crises in the EUROZONE, within the limits of what appears possible both with the German electorate, and its sometimes resentful EU partners. As I suggested above, I believe many serious political leaders in France, Belgium, the Netherlands, the new EU members in the east and even some leaders in Italy quietly applaud German financial prudence, but are quite content to stand in the shadows, letting Chancellor Merkel take the heat.