Monday, June 27, 2011

European Affairs: Soul Mates or Friends with Benefits?

Axel Weber's most recent comments (see WSJ, "Germany's Weber Slams Rescue Efforts", June 27, 2011) are IMO more evidence of the systemic problems and the state of dynamics in the EU, its Eurozone and the world.

Has the so called European integration that almost started in 1954 with the European Defense Community and a European Political Community but instead led to the creation of the European Economic Community (along with the European Carbon & Steel Community and the Euratom) been merely an "affair" between European countries of the kind that in modern relationships lingo is referred to as "Friends with Benefits" or a relationship with serious, long tern, intent, a "marriage"? Time for Europe to face the truth re "relationships".

Some, like the UK, argue that the "relationship" was and is mainly a friends with (trade) benefits arrangement, ie no cohabitation, no sharing of a common home, just engaging basically in trade! I have already written a piece on the UK's "polyamory" approach.

In recent days, the UK public has come to realise, that the relationship with Europe and its problematic "child", the Euro, has not been as "casual"as it had thought, that what happens in Europe and its child engages the UK whether it wants it or not. Sounds a lot like relationships, doesn't it? One night stands, playboys, bad boys vs good guys, pregnancy, VD, love and/or marriage, soul mates vs friends with benefits or merely "buddies", and the rights and obligations, explicit or implicit, that arise from all that jazz!

German opinion too is slowly coming to terms with the realisation that continuous exporting without consuming has caused parts of Europe problems especially its SE part (Greece). Would love to walk away from the problems, claim that it (or the ECB) had nothing to do with creating the problems (IMO it did, see eg the 2% inflation obsession and its effects via the uber-hard Euro).

Case in point that highlights the EU's and Eurozone's systemic problems:
Greece, a country of an Ancient nation that regained its independence in 1830, deep in South Eastern Europe, with no direct land borders with the rest of the Eurozone members or the EU until 2007 when Bulgaria and Romania joined the EU. To go via land from Athens to Brussels one must board a ferry boat from Patras or Igoumenitsa to Brindisi or Ancona or Bari and then continue via land (car, rail, etc). The other option is to drive North and East, to Bulgaria, then Romania, North-West into Hungary then West to Austria, then via Germany etc!

Analogous things can be said about Finland or the 3 Baltic countries. Either enter Poland from Lithuania, then also cross Germany East to West or cross via ferry to Sweden or Denmark then into Germany.

Or Portugal.

Or Ireland.

Or Malta or Cyprus.

How has/does the EU's regional policy and its "structural" and other funds help make the EU more of a single market, ie one that provides easonable access not only for capital but also for goods, services and people? Is a road that connects Athens to Bulgaria of bilateral or EU interest or even responsibility? Bulgaria to Romania? Romania to Hungary?

Are Austria's reaction re the trucks that pass through it in the process of intra-Single Market trade to be treated as an EU issue? Can one actually expect multi-modal transport to solve any or all problems?

What about the EU environmental dimension? How does it become compatible with EU geography as well as the competitiveness of the "periphery", which is not only Greece, Italy, Spain, Portugal and Ireland, but Malta, Cyprus, Lithuania, Latvia, Estonia, Finland and Sweden as well?

One can of course ask: If all those member states of the EU constitute the periphery, where is the center? Doesn't air transport (passenger and freight) take care of access issues? No, of course it does not, but that is a whole different post (or number of posts)!

The center (or centre) of the EU? Ah, yes, the center! In the early 1990s, driving from Belgium to the Netherlands, both founding members of the EEC (1958) and both members of Benelux, I realised that as I was approaching the border, the highway changed from 3 lanes to 2! Maybe this has changed in the meantime, but I think it illustrates a point.

Was the EU a one night stand or a friends with benefits relationship? Ie one that is about to end, as some recent analyses in the press suggest (or should I say hope)? Or is it just the Euro, the child, that is causing the problem and must either be given away for adoption or have parental rights to it stripped away from Greece and maybe some other of its parents?

Or as Mr. Weber seems to suggest, after all the best option is for the whole of the Eurozone to guarantee the outstanding Greek debt? And then what, though? Marriage is inevitable and in this case it means Political Union. Who has ever heard of a 53 or 10 year one night stand? By now it has become marriage, it is at least a common-law one. And while the theoretical option of a divorce exists, it will be so messy that only the divorce lawyers will actually benefit from it, if anyone does. When they say through thick and thin, they mean it. And even trade relations can lead to "pregnancies" even if "precautions" are used. Abstention is one option, but then look at Cuba or North Korea.

Even "Alfie" changed his ways.

Time for Europe to do so too.

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Nick

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