Sunday, January 01, 2012

A political response to a political project

Given the hazards of making predictions for the coming year, Booker in his column (click to enlarge to readable size) has taken the safer and more entertaining course of predicting what is likely not to happen. His first is that it is no longer conceivable that the sad little nonentities who preside over the affairs of the EU will be able to find any rational way out of the hole they have dug for themselves over the euro.

Nothing they did in 2011 went anywhere towards saving them and us from the consequences of this folly, says Booker. The right measures could not be allowed because the single currency was never designed as an economic venture.

This is something a great many commentators have yet fully to understand, especially when they complain of Merkel, in particular, taking the wrong or insufficient action, of "dithering" or delaying.

But what may seem to be a flawed response when looked at from an economic point of view takes on a wholly different aspect when seen as political acts. Merkel, Sarkozy and the others have as their primary concern not the rescue of the European (and global) economies, per se, but the preservation of le projet.

The euro, says Booker, was a wholly hubristic political gesture, the supreme symbol of the real agenda of the "European project" from its foundation: the desire to lock all the nations of Europe indissolubly together in ever closer political union.

For any country to leave the euro would be a defeat too great to be countenanced, and thus must be prevented at all costs. And it is this political agenda which is driving all the rescue attempts. As a result, Booker avers, they are all now completely boxed in. Even in practical terms, it is too late for such a remedy.

A country leaving the euro would find itself in a worse mess than ever. Its regained national currency would be instantly devalued, leaving it even less able to repay debts contracted in euros than it is now. Defaulting banks and defaulting countries would send shockwaves through the entire European economy and spread chaos in every direction.

So all that is left to those in charge of the "project" is to prattle on about the need for "more Europe", as they belatedly attempt to set up some kind of "fiscal union": that all-powerful economic government of the eurozone which wiser counsels warned, as much as 30 years ago, was a necessary precondition of launching a single currency – not a half-baked measure to be cobbled together after the damage was done.

To keep the euro together, and the eurozone intact is, by any sound economic measure, impossible, but the greater political need dictates that the "colleagues" continue to try.

It is for that reason that they are inflicting such deflationary pressures on the debtor countries of southern Europe that their economies are driven to collapse, inflicting social misery on a scale unknown since the Second World War. We can see this already in riot-torn Greece, where hapless families are driven to dump their children on a bankrupt state because they can no longer afford to feed them.

Just how the catastrophe will unfold from here, and what the consequences will be for the future shape of the EU, no one can predict, says Booker. Even the Commission President, José Manuel Barroso, has suggested that a collapse of the euro would inevitably call into question the survival of "the Union" itself.

Booker nevertheless sees "one faint consolation in recent months" - the sight (as broadcast on YouTube) of Nigel Farage, leader of Ukip and of the Freedom and Democracy group in the European Parliament, repeatedly standing up in its front row to rub in the inescapable realities of this disaster only a few feet from those currently responsible for it – Barroso, President Van Rompuy and the leaders of the other political groupings in the parliament.

These deflated apparatchiks simply stare ahead, dead-eyed and stony-faced, knowing just how powerless they are in the face of the unfolding tragedy.

Booker is entitled to that view. Others might ask what Farage does to manage the £3 million or so that passes through the hands of his group of MEPs – what we get for the money, and whether we are paying an incredibly high price for the Farage ego show.

In that real world, Booker adds that we must not forget that, when it comes to nations running up a debt out of control, our own Government is still having to borrow an additional £2.5 billion every week, just to fund its own overspending – which, despite all talk of “cuts”, still races upwards.

Any moment now, he says, our own national debt will top the £1 trillion mark, having more than doubled in six years. However damaging disintegration of the euro may be to our economy in 2012, we also face a crisis we have brought upon ourselves – one for which our government has no more of a real answer than do the impotent rulers of the eurozone.