Euro crisis: “Slowly the public is being softened up for historic change.”

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While the euro crisis rumbles on, and with Frau Bundeskanzlerin promising that “We will do what is necessary, everything else will be discussed step by step”, the BBC’s Europe editor, Gavin Hewitt, wonders “what democracy in Europe means”…

If the eurozone group of countries heads towards fiscal union then a further question will surely follow. Can you have fiscal union without political union?

Slowly the public is being softened up for historic change. President Sarkozy was not a lone voice when he said recently “the end of the euro would be the end of Europe”. Whether that is true, of course, is open to question. But it prepares the ground for explaining that after the Lisbon Treaty, which was intended to settle the dividing line between what belonged at national and EU level, another shift in where power lies is being contemplated. It is worth recalling that Jean Monnet, one of Europe’s founding fathers, once said that Europe would be “forged in crisis”.

We have not yet reached that point of another giant leap towards further integration. Much of this belongs in policy papers and in the ferment of ideas that a crisis produces. What is unclear is whether, if there were a lurch towards fiscal union, voters would get a say.

When at the end of last year a permanent bail-out mechanism was being discussed, Chancellor Merkel insisted that the new structure had to be supported by treaty changes. Huge effort went into ensuring they could be called “limited” to avoid referendums; vox populi is seriously mistrusted in Brussels.

But what if the elites get it wrong? Some believe that the rise of populist parties across Europe is a direct result of leaders and officials ignoring the public mood towards immigration.

The economist Paul Krugman, who is a great admirer of what Europe has achieved, also notes that some of the mistakes made over the euro were because the architects of the single currency were engaged in “magical thinking”.

On the streets of Europe young people are frustrated and bitter, particularly over unemployment. Many see a lost generation without any certainty of work and facing the prospect of a future less prosperous than their parents experienced. Their protests are currently directed at their governments, although I have heard voices raised against the EU and the IMF. It is an interesting question what democracy would mean to them in a Europe of “ever closer union”.

Now, as I said, we may be getting ahead of ourselves. Only a couple of months ago Mrs Merkel’s office said “there are no plans and there is no desire for a joint fiscal policy”.

But the story of this crisis is how quickly lines in the sand are ignored.

Read the whole thing.

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  • http://nevertrustahippy.blogspot.com Paul Evans

    It may be the case that the public aren’t being brought along, but I’d take issue with the idea that avoiding referendums makes it any less democratic.

    http://sluggerotoole.com/2010/12/13/why-referendums-should-be-banned/

    If elected parliaments want to make ‘constitutional’ changes, that’s fine by me – not that we have a written constitution in the UK and Northern Ireland in the first place ….

  • pippakin

    Having spent many years in the UK I’m a firm believer in referendum. It’s not enough but its better than getting one vote every five years and being ignored for the rest of the time.

    It does, however abused or neglected it is, give the electorate the final say. Rightly or wrongly Ireland voted us into everything except the financial crisis. Surely just knowing the politicians have to work hard to find a way around it makes it worthwhile.

  • Pete Baker

    “Rightly or wrongly Ireland voted us into everything except the financial crisis.”

    pippakin

    Perhaps. Or perhaps not…

    “It was the choice of the successive governments, and their voters…”

  • http://nicentreright.wordpress.com/ Seymour Major

    What is unclear is whether, if there were a lurch towards fiscal union, voters would get a say

    I think this question is really about what kind of democracy and European constitution we would end up with following fiscal union, rather than how we get to that point. I will therefore stay out of the referendum debate and leave that discussion to Paul’s earlier post.

    Fiscal union without additional political reform would be a huge dilution of democracy. But how would this work in practice? Some economists and politicians argue that the euro can never work without full political union. In other words, a European superstate or bust.

    I tend to agree with that view. Fiscal union on its own concentrates too much power in Germany and would not work. I think the Germans understand that too. Frau Merkel has gone on record as saying that she foresee’s full political union within 10 years.

  • pippakin

    Pete Baker

    I read it, thank you. What has broken Ireland is not the sovereign debt although that is bad enough. It is the ‘rescue’ of the banks. Had a referendum been held on that I wonder what the answer might have been.

    In a recent poll in the US, 71% of those asked said they would rather the US defaulted than borrowed. I don’t believe in OPs but I definitely believe no one here would have voted for the banks.

    Its also typical banker talk to blame the ‘customer’.

  • The Word

    Pip

    “It is the ‘rescue’ of the banks.”

    Is there an alternative in reality?

  • Pete Baker

    Wordy

    If you want to have that conversation, take it to the other post.

    There’s a topic under discussion here already.

  • The Word

    Petie

    The point I make is central to your thread. At the moment there doesn’t appear to be an alternative to the rescue of these banks.

    The “money markets” are just gearing up to pick off another country, whether it is Spain , Portugal, Italy, or Belgium.

    It is therefore premature to even postulate fiscal unity in circumstances where there is economic uncertainty on such a scale. It can but be a deflection of attention away from “the realities”.

  • tacapall

    Those that control the currency control the country, in 2001 there were only only 7 nations in the world who did not have a privately owned Central Bank. After the invasion of Afghanistan in 2001 there were six nations without a privately owned central bank. After the invasion of Iraq in 2003 there were five nations without a privately owned central bank. The five remaining nations at that time were Iran; North Korea; Sudan; Cuba; and Libya. In August 2009. Since the release of the Lockerbie bomber Libya has from feb 2010 opened its country to foreign banks, we know how the media, who are owned by those who own the central banks, portray the rest of those countries and the military eyeballing that is being orchestrated in the pursuit of wealth and power. We are slaves to these people from we are born, this looting of nations by those who have everything will never end untill a fairer system of banking is established worldwide.

  • Pete Baker

    “If elected parliaments want to make ‘constitutional’ changes, that’s fine by me”

    Paul

    In principle, I don’t disagree. At least for the UK.

    But states with codified constitutions, as you imply, sometimes include a legal requirement to hold a referendum before a parliament is allowed to relinquish authority to a body outside of that state.

    One of those silly checks and balances constitution writers like to use to prevent such changes happening without the direct consent of the people.

    That would probably be the case for greater fiscal union – hence the ‘limited’ nature of the changes currently proposed. Certainly the case for greater political union.

    On a practical level, if you accept that the public haven’t been brought along to date, then generally it’s difficult to see a positive reaction to greater fiscal union without the direct consent of the people.

    And impossible to see a positive reaction to greater political union without that direct consent.

  • Cynic2

    Forgive me for being cynical (and naughty) but wont it be rich if the Republic is absorbed by a European Super State and little old NI stays free because its in the UK?

  • tacapall

    Free !!! Free to do what ?

  • DC

    On the streets of Europe young people are frustrated and bitter, particularly over unemployment. Many see a lost generation without any certainty of work and facing the prospect of a future less prosperous than their parents experienced.

    Yup, I knew it – relative decline. That’s why there’s more talk of public services being privatised, it’s not really ideological, it’s more the fact that Britain and its politicians can tell the people the truth and expect to get re-elected for it. Namely, Britain (like many other countries) is going through a period of relative decline – financial decline – and efficiencies across the range are being sought. Terms and conditions – generous terms and conditions in certain public services – can no longer be maintained neither can the traditions that support them – public sector as service provider. So, cue privatisation and a better deal for the taxpayer, whether services improve is another matter entirely.

    But back to the topic – re fiscal Union – go for it. Because since when did capitalism ever give a toss for democracy – not like we all got a referendum on bailing out the banks either side of the border.

  • DC

    *politicians can’t

  • http://amanfrommars.blogspot.com/ amanfromMars

    Well done, Biffo, now you’ve really fcuked up the System …… and it is just what the System needed. Bravo, again, Squire. ……. http://thedailybell.com/1690/End-of-Euro-Ireland-Prints-Own-Notes.html

    And you,ll always find the comments on stories there, much more enlightening than anywhere else where the mainstream media would be trying to maintain the status quo with all of its inequalities and inequities, rather than building a utopian future to engage and expand upon the virgin imaginations of the newly born and easily susceptible to remote control/neuro-linguistic programming.

  • http://amanfrommars.blogspot.com/ amanfromMars

    DC, If you think it is bad in Europe, it is worse in the USA, …… http://detnews.com/article/20110112/SCHOOLS/101120356/Without-aid–DPS-may-close-half-of-its-schools …..and the dollar is in a much more precarious position than the euro, although that doesn’t tell you much, other than they are both teetering on the edge of the Ponzi abyss, …… with nowhere else to go with the present regimes and has-beens at the levers of slave control with currency candy.

  • DC

    amanfromMars

    I agree – the world’s gone mad.

  • Neil

    wont it be rich if the Republic is absorbed by a European Super State and little old NI stays free because its in the UK?

    Depends on your definition of freedom, doesn’t it Cynic. You might feel free prostating yourself at the feet of the British and their monarchy, but that doesn’t mean that your point of view is normal.

    To an Irish Republican freedom is having the 32 counties of Ireland united, in line with the wishes of the majority of people on the island. As opposed to your view that freedom is having your country invaded and rule imposed from abroad by a foreign monarch against the wishes of the people and at the point of a gun being the epitome of freedom.