This week the President of the European Union (yes, it does have a President!)m Herman van Rompoy did a ten-second summary of the current financial situation in which he linked Ireland’s financial difficulties, the fate of the Euro and the possible collapse of the European Union itself. The ultimate domino effect. Could it happen? Yes, it could. Only now are commentators (and ordinary citizens such as myself) beginning to wake up to the inconvenient truth that the real problem is the Euro itself. A single currency presupposes unitary and consolidated financial and economic control. We don’t have this in Europe. We have a very cumbersome and inflexible set of relationships among the member states overseen by the Council of Ministers and the European Central Bank. No wonder the Germans are worried.
Alister Heath, a UK economist and commentator, reminds of the extent of the problem when reflecting on the current crisis: “The EU’s treaties are not worth the paper they are written on, especially the nonsense about fiscal sustainability; the euro is a giant with feet of clay; monetary union will either lead to fiscal centralisation and destroy democracy in small countries or break up completely. Another absurdity: as part of the moves to force banks all over the world to hold more liquid assets, they have all been told to buy vast amounts of supposedly safe government bonds. This wasn’t exactly the cleverest strategy. What a mess.”