The Euro End is Near
With the Euro threatening to break like a crystal glass the EU is faced with the most serious financial crisis in history. What could change and what is at stake? These are the most relevant questions to ask… read on to see the answers.
How the implosion of the fragile Euro will unite Europe.
The world has long had a globalized economy and it may be hard to understand how lama poop in Bolivia can affect the price of beef in North America but it is a complex inter-connected reality that investors and economists around the world try and decipher minute by minute.
Our Prosperity is what is at stake if the Euro crashes. The world economy is an engine and the European countries and the Euro currency could be compared to the alternator in the engine. If the alternator does not recharge the battery then eventually the engine could stop from lack of power. The global economy could grind to stagnation without a functioning financially healthy Europe. Prosperity and social security would be the first to go.
The EU would not survive the crumble of the Euro currency. Common freedom of travel in Europe would come to a halt. Some say it was a mistake to introduce the Euro in the first place. Others say it was an eminently logical consequence of the economic advancement/amalgamation of Europe.
However, the euro is at best a premature currency with the absolution of an obligatory political union unspeakably absent. Europe wanted a political union and it seemed like a good idea at the time, but it hasn’t been possible. After World War II Germany may have been prepared to give in to Brussels politically and economically but other European countries had a dilemma with the concept. National Autonomy was something that had been refreshed with the fall of the Iron Curtain and uniting politically wasn’t appealing in fear of lessening national tradition. So the euro could not have been introduced without the necessary political union. So now with the existence of the Euro with the absent political structure in place the EU preferred to take the risk by forming the currency and now they will pay for it.
The idea was that a 100% immediately workable idea was not possible and if the EU didn’t take steps toward integration they would not advance even 1%. Thus the Euro was introduced first and then a decision for a political union was quickly attempted and loosely constructed. The Luxembourg Prime Minister claimed at the time that “the euro would be the father of future European developments.”
The Euro now has immense powers of destruction. Even though Europe has always functioned on the basis a couple principles: One: What isn't possible at first will happen over time. And two: what doesn't work will be corrected over time. That is why a perfect solution will take so long in Europe. The building of the monetary union needs much improvement.
Some say that the crisis was expected and the Euro was invented with this future in mind. Sounds like a conspiracy but as is Europe will eventually be forced to choose between uniting politically or loosing prosperity and social security. The problems that come from the euro are ironically the solutions of a politically united European Union and a stronger bond market and currency in the long run.
The design of Europe at present is highly unstable yet the desire for improvement is a basic human condition. Most people don’t want to suffer so the trajectory of Europe is an inevitable prosperous one because of what it has to offer the world and itself. It will take time and things may get worse before they get better because Europe is complicated and its current structure inspires only limited buoyancy in the financial markets.
How may this Be corrected? EU member states have the final say in Europe. This won’t continue because it is a political nightmare. All of the power will eventually be passed to Brussels so that each EU nation state cannot block progress and individual mandates. It will turn into the United States of Europe.
The Europe of the future will not be like a federal state such as that of the United States of America or the Federal Republic of Germany but rather have a more advanced structure fixing the problems that vex that of the USA and Germany.
Europe's strength is in particular it’s multiplicity of culture, so a monetary and political union has to be done without upsetting that. How will this be done? The nation states have to give up their control in terms of fiscal policy. Europe needs administrative power over all major banks and lenders. And common funds need to be available for bail-outs and control.
The idea of joint government bonds or the so-called euro bonds has been talked about. It is a confidence-building measure and most economists see it as inevitable after a euro crash. Right now the EU does not have a fiscal union yet their fates are joined as they are forced to assume joint liability for debts.
What is the most advantageous scenario? A European finance furor… who would have absolute power with respect to national budgets and final say in borrowing. Each EU country would decide how to spend the approved funds. There is an eminent risk that no matter how pretty the dress is Europe puts on this idea that it will be rejected. But the choice will be forced and those who want prosperity and social security will eventually give in. Parliamentary responsibilities will be the apparent remedy to the objectors.
Globalization may make it imperative that economic policy be similar all around the world and democratic legitimacy could become more of a charade similar to US politics.
Eventually there could be a direct election that would be preceded by a large-scale mobilization, and it would involve all Europe. The directly elected leader would be strong and monitored by a frail legislative body. The member states, which currently make up the Council of Ministers and the European Council would have a body representing the countries based on the model of US Senate. Each country will have a certain number of representatives to this body. All laws would require a majority in the body. This is future but the crash of the Euro is a necessary step in the financial and political progression of Europe.