Friday, May 27, 2011

The EEC was never (mainly) about economics

The debates, discussions, analyses, even headlines on EU affairs in recent years seem to hav lost sight of the fact that the EEC, although titled "European Economic Community" was not set up in the mid-late 50s for primarily economic reasons!

Following the narrow defeat (264-319) in the 1954 French National Assembly of the proposal for a European Defense Community, the deliberations which were under way for a European Political Community were also scrapped. Instead, the EEC and the Eurupean Atomic Energy Community were created, while the European Carbon and Steel Community had already been estabished in 1951.

As an alternative to formation of the EDC and the EPC, the EEC as well as the other 2 communities had as their main foundation political and security matters.

First was to avoid another war in Europe, world or European. France and Germany, plus the Benelux 3 and Italy were the fonding members. The common market was seen as a more gradual means of bring the countries of Europe together and that had and has a concrete political foundation. A common market was the means but not the end. The end was, by design, a gradual evolution towards the initial goals of European Political and Defense Union.

Many of the 21 other countries that joined the EEC (or EU after the Maastricht Treaty) did so, overtly or implictly, for secueity purposes.

Eg Greece joined in 1981 and was eager to also join the Euro for primarily security purposes (known by everyone, no need to mention re which other country), the same reasons that have made it overspend in defense (eg No 1 in the EU and No. 22 in the world in pe capita defense spending in 2006, source: CIA World Factbook).

I could mention the specific scurity concerns of other memebers that drove them to the EEC or the EU but it is always a touchy subject. So touchy that most like to pretend that a common market or customs union was the objective behind the vast undertaking that started in the 1950s.

Which brings us to 2011 and the Euro crisis. Which of course is not due to the deficits and debt of an economy that is less than 2.64% of the Eurozone's GDP and its debt is 4% of the total Eurozone debt! If a "structure" or "system" (forgive my lingo, due to the decision science part of my educational background) can be de-stabilised by such a factor, then of course there is something wrong with the system.

What is fundamentally wrong/faulty with the Eurozone system?

The main fault, which actually is for many, the elephant in the room, ie the one they choose to ignore or push under the carpet, is that the single currency was created, based on the Maastricht EU Treaty (1991/1992) without the foundation of a single polity, ie without the prior or concurrent establishment of poitical union, the actual European goal since the early 50s! Talk about denial!

Had the leaders who gathered for the Intergovernmental Conference (IGC) in Maastrict in December 1991 the collective guts to decide on a political union instead of merging the 3 communities into an EU with 3 pilars, etc, and a common currency, and merely renaming the thing "Union", then the singe currency would have been built on solid ground.

They did not. Not too late though, not yet!

Read also my post: The EU's No. 1 problem is .....

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