European Union

The answer to that question is simple, the US of course. Some months ago I made a comment to Skip that the EU would be lucky to survive another ten years. It now looks like my estimate could have been generous. Greece is all but bankrupt, Portugal and Spain are teetering on the brink, Italy and Ireland are close behind. This week, Britain announced that it forecasts a budget deficit larger than that of Greece. All is not well in the New European Empire.

A Greek Police Officer Hit By A Molotov Cocktail.

In a one-size-fits-all economic arrangement there are bound to be casualties. The cap simply won’t, and can’t, fit some countries. Imagine the US joining an extended form of NAFTA, perhaps called AFTA, which includes all or most countries in Central and South America. To create a common currency with equal value in all member states would be disastrous, not to mention the fact that ‘free movement’ rules would have to be observed. So much for immigration controls!

These free movement rules are very much a one-way street. For example, compare the number of Polish and Latvian emigres in Britain with the number of Brits in former Eastern Bloc countries. During a recession it’s virtually impossible to provide jobs for the unemployed in your own country, without trying to cater for the requirements of ex-pats from another twenty six member states.

There is no doubt that the empire builders in Brussels have this vision of being the prime world superpower, economically at least. There are numerous reasons why this just won’t work. Many European nations are notoriously socialist in their outlook, indeed for some of them communism was the only system they knew until recent times. Socialism and free market principles together cannot work. That is why the current US administration can never work. Any system which is top-heavy with bureaucracy and regulation is doomed to failure. More time, money and resources are used in supervising the machine than in letting it do its stuff.

I hope that what is happening in Europe will be an example to Obama and Congress of how not to run an economy, although it will probably fall on deaf ears. It is a coincidence that Obama’s administration gave the International Monetary Fund another $100 billion recently, while this week it was announced that the IMF is to give $39 billion to Greece. So much for the European economic powerhouse, on top of the $106 billion they are giving from countries in the Euro-zone they have to run to the IMF for a top-up, some of it being American money.

A failed economic system can only shored up for so long, eventually the weight of flawed financial principles, bureaucracy and Euro-socialist ideals will bring the walls crashing down. Then, I wonder, who will they call?

(Editor Dee is in for Skip today)

 This weekend's German election has some lessons for our political context. Der Speigel sees a new German political pattern emerging from this:

After Sunday's election, Germany's political landscape has been shaken up, perhaps for ever. Angela Merkel's conservatives will be able to form a coalition government with the business-friendly FDP, but the balance of power between the two parties has fundamentally shifted. And the once-powerful Social Democrats may never recover from their defeat.

Chancellor Angela Merkel has probably saved her chancellorship -- but the price that her conservatives will have to pay for it is high. The election result for the center-right Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), is lower than in 2005. Nevertheless, she can form a coalition government with the business-friendly Free Democratic Party because support for the FDP has increased in a way that until recently pollsters would scarcely have thought possible.

Just as in the European elections, we are seeing a splinter of the political scene. On the left, the far left gained, the Greens gain, the centrist-left collapsed, the center-right shrunk slightly, and the liberal party gained massively. The right (center-right + liberals) has grown, but not hugely.

Several things to take away from this in the time of an economic downturn:

First, the appeal of libertarian positions has grown. Even in Europe and Germany there has been an anti-government, anti-entitlement, pro-reform movement that is growing massively. We see this here in the tea party movement.

The response to the economic crisis has been more freedom and less government. Somehow government is getting the blame, at the ballot box, for the downturn.

Second, the center-left has lost credibility, but the numbers on the left are still large if you include the far-left. It is hard to imagine a victory of the German left without the Left Party, but it is also questionable whether this turns off swing voters between the center-right and center-left. Some on the American left will try to learn the lesson that they need to move to the left -- isn't that always the lesson? -- but one wonders if, like the SPD, the Democrats would suffer from highlighting their relationship with the far-left.

All in all, we are in a situation in which right-leaning parties are sweeping elections or performing at historic highs. These things happen in response to global events. It will be interesting to see if this pattern continues into the next year.