Sunday, August 14, 2011

The Coming European Super Government

There are three ways to end the eurozone crisis.

One, the sane step, simply disband the eurozone and let every country fend for itself, which would result in every country having incentive to get its financial house in order.

Or prop up the weak sisters of the eurozone by creating one huge super-government with growing authoritarian influence over the entire sector, by either printing money to prop up the F'PIIGS or issuing euro bonds to prop up the F'PIIGS.
The issuance of euro bonds would be a major step toward a euro super-government. The issuance of such bonds will most assuredly come with super-euro oversight and regulations. Germany, the key government holding out against a euro bond, appears ready to buckle on the point.

The German government no longer rules out agreeing to the issuance of euro zone bonds, conservative newspaper Welt am Sonntag reported on Sunday, according to Reuters.

Even though Finance Minister Wolfgang Schaeuble and Economy Minister Philipp Roesler again spoke out against euro zone bonds and debt collectivization, Welt am Sonntag reported the German government is nevertheless considering that and other measures.

"Preserving the euro zone with all its members has absolute top priority for us," according to a government source quoted in the newspaper under the headline: "Government no longer excludes European transfer union and joint euro bonds as last resort."

According to Reuters, the newspaper, Welt, traditionally close to Chancellor Angela Merkel's Christian Democrats, indirectly quoted the source adding: "In case of emergency, one would thus even be prepared to accept the introduction of a 'transfer union' and at the end of the day even joint euro zone bonds.

"Without these euro bonds, it might no longer be possible to save the euro zone," the newspaper continued, further quoting the source indirectly. "The path we've taken so far with multi-billion rescue packages for financially struggling states is beginning to reach its limits."

Reach its limits, indeed. The eurozone has nowhere near the funds to prop up Italy and Spain, never mind France.

They either print money via the ECB, issue bonds, which crowds out private sector borrowing, or disband. A disbanding of the eurozone, which would be the only alternative that doesn't lead to a march toward a super euro government is, of course, the least likely. In other words, a European Super Government comes one step closer to full development and full domination. Not pretty.


  1. Why bother promoting liberty then? It seems no matter what happens governments only grow larger. Unless you think this super government won't last either.

  2. I'm not so sure (at least I'm hoping) that they will get away with a super-euro government. Fact of the matter is, fewer and fewer people in Europe want to have anything to do with the European Union. So far, only fringe parties have gone eurosceptic, but once this becomes the main issue there is probably going to be a flurry of moves into the skeptic camp.

    Of course, they could make another stab at the power to tax from Brussels - but that might just lead to the first wave of Europe-wide tax revolts. Things are looking very nasty right now, and nastier they will get - but I still have hope for a complete eurozone-collapse and a return to european political anarchy.

    Besides, when everyone is bailing out everyone, and inflation starts spreading far and wide, the shit will probably hit the fan hard enough for even the politrucks to feel the stains.

  3. Somewhat related, I was just visiting friends in their home where of the family members was watching NBC news. I could hear the anchor discussing the European market situation w/ someone I presume to be one of NBC's regular financial correspondents.

    The correspondent answered one of the anchor's questions with an analogy comparing the booting of Greece from the E.U. and allowing it to use its own separate currency w/ the U.S. booting one of its member states and taking them off the dollar.

    The first thought that popped into my head was "Ha! They should be so fortunate!"

  4. People are far too stupid to be free. I don't know why any thinking person thinks we will have liberty in our lifetime. 90% of humans on Earth are just ignorant animals wanting violent authority.