September 14, 2011

Predictions, Predilictions UPDATED

Hatched by Dafydd

I've been bruiting this about among friends, but I feel strong enough to go pubic...

We all know that something is rotten in the state of the European Onion; but I'll be the boldest by staking out this prediction:

Within six years from today, by September 14th, 2017, the European Union as a political body will cease to exist except on paper. And the whole sorry farce of "United in Diversity" will be nothing more than a vivid and utopian opium dream.

Similarly,

The Euro will no longer be a semi-pan-European currency; each country will revert to its native currency -- lira, deutschmark, drachma, pound sterling (all right, all right, the last never actually disappeared) -- and the Euro will only be honored as trade-in on the local national currency.

Remember, you read it here first!

I have a bit of vigorish here; I believe the EU (pronounced eeew!) has never really existed except on paper in the first place. Nobody really believes that Greece, Portugal, France, Spain, Germany, Bulgaria, Latvia, and the UK (pronounced yuck!) are all contained within a single geopolitical unit. It's impossible and insane.

But I mean something stronger: Under my prediction, nearly all the political entities putatively absorbed into the EU, and all of those with functioning economies without exception, will have formally repudiated any supernational "sovereignty" of the European Union; if it exists at all, it will be only as a "free-trade zone."

That's my prediction, and I stick to it. Señoritas und gentilhommes, place yer bets!

UPDATE 14 September 2011: Commenter Snochasr asked, "Any idea HOW this dissolution could be accomplished?"

Well, it's already happening; and the trigger has been the looming debt defaults (often driven by bank failures) and proposed and actual bailouts of perpetual paupers Greece and Portugal; countries with serious deficit and debt problems, such as Italy, Ireland, and Spain; and even the very powerhouse economies that are called upon to bail out everyone else: Germany, France, and the United Kingdom. (Ireland and the UK are in trouble mostly because their banking systems are integrally tied into their federal budgets.)

The most prosperous EU member states are now faced with having to choose between:

  1. Loaning staggering amounts of money to a country whose economy has (by definition!) totally tanked, money that will likely be as useful as pounding sand down a rathole. Loan packages already approved for €110 billion for Greece, €85 billion for Ireland, and €78 billion for Portugal. In May of 2010, the gnomes of the EU concocted the European Financial Stability Facility (EFSF), funded by €750 Billion -- about the size of one of Barack H. Obama's "stimulus" packages.

    (But who says these welfare recipients will actually fix their economies? If they don't, they'll demand and endless conveyor belt of future bailouts.)

  2. Refusing to join the lemming-like rush over the fiscal cliff, which would lead to serious legal consequences for the "stingy" member state in international courts.
  3. Or else simply quitting the EU altogether and telling their courts of "universal jurisdiction" to go suck rocks.

While the beggar's banquet of EU member states with rotten economies have their own decisions to make:

  1. Accept the bailout -- and the "austerity" measures demanded by the lenders, along with the permanent state of riot and bloody violence that invariably accompanies externally imposed austerity measures.
  2. Reject the bailout and either severely inflate their currency to pay off the debt; or else simply dafault on all or part of it, triggering a whopping fiscal crisis EU-wide.

Take Germany as one example; it doesn't want to bankrupt its relatively good economy with a succession of bailouts to the many countries in the EU that face imminent economic collapse. But on the other hand, I doubt Germany is anxious to be made into the scapegoat for the political implosion that might result from denying those bailout loans.

And there are likely legal consequences, too: By joining the EU, Germany and the other member states accepted the jurisdiction of the Court of Justice of the European Union. If the other strong economies (France, the UK, others) bought into the loan package, but Germany refused, the contributors might be able to go to the Court of Justice and try to force Germany to comply.

I have no idea whether the CoJ has either jurisdiction or authority to force a member state to join a bailout... but my guess is that neither does anyone else; I strongly suspect that the rules of that court are kept deliberately vague, allowing tremendous latitude for the court itself (and favored litigants), and tremendous risk for Germany, or any other member state thwarting the decisions reached at the upper reaches of the European Parliament. I wouldn't be surprised if there was some provision allowing Germany to be haled into the dock at Luxembourg and hit with fines and potentially political punishment.

Bottom line, I don't think it's feasible for Germany to refuse to lend the money, but still remain in the European Union. (Note that this same analysis applies to every other member state expected to pour its treasure into rescue packages for the basket cases.)

So Germany, et al, have only two practical choices:

  • Bail out Greece, Portugal, Ireland, and any other collapsing state into the foreseeable future;
  • or bail out of the EU.

In the end -- if not for this bailout, then for the next, or maybe the one after (that's why I gave my prediction a six-year time span) -- the rich states will not crucify themselves upon a cross of continentalization. Either the current government, or else the next, after that government falls, will run for election on the platform of withdrawing from the EU, notwithstanding the fact that there is no provision for unilateral withdrawal.

Once some nation, Germany or another, punches the first hole in the dike, the other EU member states who have a functioning economy will disassociate from the Union rapidly. If stable states are reluctant to bankrupt themselves propping up the perpetually collapsing states, think how much more reluctant they'll be when one of more of their fellows in stability opt out: "Why should we pay tens of billions to Greece and Portugal when Germany isn't paying a single deutschmark?", the next state will cry... and that argument is pretty unarguable.

But there is another pressure pushing the EU apart: I believe that in the 2012 elections in the United States (or no later than the 2014 elections), Republicans will win the fourteen Senate seats necessary to have a filibuster-proof majority; there are 23 Democrats up for election next year, many from normally Republican states elected in the Democratic congressional landslide of 2006, versus only 10 Republican seats, pretty much all safe; and I believe Republicans will likewise win the presidency (Obama is toast) and retain the House.

The GOP will control all levers of government, and tea-party activists will control the GOP. (That reminds me of one of my favorite quotations from 1984: "Who controls the past controls the future: Who controls the present controls the past.")

If the GOP succeeds either in 2012 or at least by 2014, then we will see a flurry of pro-Capitalism and anti-Progressivism legislation, including:

  • The repeal of anti-business laws and regulations
  • The repeal of insane laws requiring banks to make home loans to applicants who clearly cannot afford them
  • The repeal of administrative rules and regulations that close off 95% of our own energy resources to exploration and exploitation
  • The repeal of ObamaCare
  • The repeal of cockamamie EPA rulings erecting a Cap and Tax regulatory regime in spite of Congress' refusal to enact Cap and Tax
  • The repeal or vacating of many endangered species declarations by the Department of the Interior, such as the Delta Smelt, that have resulted in massive economic dislocation to human populations in the United States

I predict this will induce a Reaganesque economic boom in the United States... and the contrast with the economic bust of the last few years -- as well as the economic and fiscal desolation in Europe right now -- will finally cause the non-protesting majority in the EU (which wants countries to get their own economies in order) to rise up and challenge the socialist minority, the permanent, floating protests demanding ever more government control and subsidy.

When the sane majority finally goes to war against the delusional minority, the former will start throwing out internationalist, totalitarian politicians -- not by violence but by voting them out along with their parties; this is civilized Europe, not the so-called "Arab Spring"! And again, once that "popular front for Capitalism" begins, it will snowball into a continent-wide movement.

That is how I envision the EU finally falling: via a combination of the elites refusing to bankrupt their economies in order to bail out failing member states, quitting the EU instead; and a popular uprising against socialism and Progressivism that sweeps many more capitalists into public office in European countries.

My bottom line: If a situation is intolerable, then sooner or later, it will cease to be tolerated. I have yet to see an exception.

Hatched by Dafydd on this day, September 14, 2011, at the time of 1:10 AM

Comments

The following hissed in response by: snochasr

Seems to me that it should never have evolved into anything beyond a free-trade (and free travel) zone in the first place. It doesn't make sense that multiple national governments would make themselves subservient to a gang of bureaucrats from neighboring and competing nations. Even free-trade zones have each nation independently enforcing the specific agreed rules, not turning over those matters to some extra-national authority.

In short, I would agree entirely with your prediction except that bureaucracies have a long lifetime, like cockroaches. Any idea HOW this dissolution could be accomplished?

The above hissed in response by: snochasr [TypeKey Profile Page] at September 14, 2011 7:08 AM

The following hissed in response by: Mr. Michael

The elite European minds loved the idea of the EU, since it pushed back their responsibility to face economic truth another level. But the hearts of the various European PEOPLES were never in it.

I had an opportunity to speak to the Spanish Press Corps when the King of Spain came to Seattle some years ago, just as Spain was finalizing it's membership in the EU. These were the equivalent I guess of the White House Press Corps, but they followed their Liege Lord, King Juan Carlos. I asked them what happens to the King as they join the EU, does he become like, a Duke or something?

Okaaaaay... not a popular question. MAN did they resent the very IDEA that their King would lose ANY stature at ALL! "NO!" they shouted, "He is KING! He will always be KING!"

And yes, they actually shouted.

The above hissed in response by: Mr. Michael [TypeKey Profile Page] at September 14, 2011 9:12 AM

The following hissed in response by: Dafydd ab Hugh

Snochasr:

I'll add an update explaining how I think it will fall out.

Dafydd

The above hissed in response by: Dafydd ab Hugh [TypeKey Profile Page] at September 14, 2011 1:29 PM

The following hissed in response by: Beldar

But ... but ... what about Belgium?

Shall it have survived the rape of the Huns in the War to End All Wars and the plunder of the Nazis in WW2, only to smash on the rocks of Flemish/Walloon separatists?

I'm waiting with baited breath to find out, but I'm confident that in any event they'll continue to shelter under Pax Americana.

The above hissed in response by: Beldar [TypeKey Profile Page] at September 17, 2011 10:22 PM

The following hissed in response by: Beldar

(By that I mean I have eaten several large worms while waiting.)

The above hissed in response by: Beldar [TypeKey Profile Page] at September 17, 2011 10:23 PM

The following hissed in response by: Dafydd ab Hugh

Beldar:

I always thought there was something fishy about you, Beldar.

Dafydd

The above hissed in response by: Dafydd ab Hugh [TypeKey Profile Page] at September 18, 2011 2:41 AM

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