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It is foreseeable: European variety will be the casualty. Laws, rules of action, and other guidelines predetermined by Bruxelles will increasingly limit the scopes of the citizens. They establish obstacles and disincentives to entrepreneurial behavior. In doing so the centralistic oriented Bruxelles is destroying livelihoods on a large scale. It can only weaken the economic power of the continent.

Only Europe’s bureaucracy and political elites will be the beneficiaries of the ‘United States of Europe’ including a central government in Bruxelles. To err is human. Governments make mistakes. The more power they have and the more far-reaching their decisions are, the more far-reaching are the consequences of their mistakes. Prof. Dr. Erich Weede, professor emeritus of the University of Bonn, points out this aspect. The entire European continent has to suffer from mistakes the central power in Bruxelles makes. For this reason we should resist any further centralization of power in Bruxelles. There is a great danger that the centralized power in Bruxelles will develop the same way as the central government in Washington and that Europe also degenerates into a plutocracy.

Already in 1970s with the “Snake in the tunnel” and the “European Monetary System” (EMS) some European states tried to coordinate their currencies and monetary policy. Already at that time the currency-exchange rates could not be stabilized within the exchange rate mechanism in the desired way. The economic performance of the countries and their political orientation were too different. The failure of these experiments was not surprising. It would have been enough to take a look into history. “Seen from a historical perspective, politically stabilized currency-exchange rates have rarely been of long lasting nature,” writes Werner Plumpe, professor of economic and social history at the Goethe University of Frankfurt am Main.
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Nevertheless, Europe’s political elites decided to introduce the common currency euro as book money on January 1,1999, and as cash money on January 1, 2002 – from today’s perspective the first decisive step on the way towards a centralized European central state. The majority of Germans, who would have preferred to keep the D-Mark, were sceptical. They were afraid the common currency would not be as stable as the D-Mark, although the D-Mark since it’s introduction in 1948 already had lost some 90 per cent of its purchasing power. On February 7, 1992, the “Treaty on European Union” (Maastricht Treaty) was signed into law. It determined the “convergence criteria” (Maastricht criteria)
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that were bound to commit all members of the eurozone to a track of stability. However, no mechanism was created to sanction violations of the agreements without any ifs and buts. The wool was pulled over the eyes of the citizens.

“Maximum limits both for the annually new indebtedness and the debt level of public households have been agreed on. Should they be exceeded the union mandatorily can recommend reductions and, under circumstances, enforce them with fines. This ensures a sound fiscal policy also after the entry into the currency union.“ So they said in the brochure, “The euro – as strong as the mark,” which was published by the Federal Ministry of Finance in April 1996. “Also after the onset of the currency union care is taken to ensure that no member will leave the path of virtue and stability.“ Today, many paragraphs of this brochure sound like derision: “Regarding the convergence criteria the treaty must be strictly observed; a maceration will not occur.“

The contract was breached – also by the German red-green federal government. Likewise, the purchase of government bonds by the European Central Bank (ECB) in the spring of 2010 was clearly a breach of law. In this context, one notion George Soros expressed in the Financial Times on Juliy 13, 2011, is interesting. The architects of the euro “laboured under the misconception that financial markets can correct their own excesses, so the rules were designed to rein in only public-sector excesses. Even there, they relied too heavily on self-policing by sovereign states.“

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Siehe ‚Das fatale Einheitsdenken in der EU. Lehren aus Selbsttäuschungen und Fehlschlägen’, Jahrbuch ORDO, Band 62, 2011. Prof. Dr. Alfred Schüller war bis zur Emeritierung in 2005 Lehrstuhlinhaber und Geschäftsführender Direktor der Forschungsstelle zum Vergleich wirtschaftlicher Lenkungssysteme an der Philipps-Universität Marburg.

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Legendär ist die Verordnung (EWG) Nr. 1677/88 (Gurkenverordnung), nach der die Krümmung bei Gurken der Handelsklasse ‚Extra’ auf 10 cm Länge 10 mm nicht überschreiten durfte. Sie wurde 2009 wieder außer Kraft gesetzt.

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Werner Plumpe, Wirtschaftskrisen – Geschichte und Gegenwart, Seite 103f.

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Die jährliche Defizitquote (Haushaltsdefizit in Relation zum Bruttoinlandsprodukt / BIP) der einzelnen Mitgliedsstaaten der Eurozone sollte 3 % nicht übersteigen. Die Schuldenstandsquote (die zusammengefassten Staatsschulden in Relation zum BIP) der Länder sollte maximal 60 % erreichen.

With the Stability Pact the eurozone takes the second decisive step towards a centralized European unity state. Again, the future of the European economy builds on promises. Like the federal government of Helmut Kohl, the government of Angela Merkel counts on an obviously illusory hope that the stability policy about which the heads of the governments agreed will prevail in the countries of the eurozone in the long run. But this time the European establishment goes the whole hog: With the “European Stability Mechanism” (ESM) the countries of the eurozone shall irrevocably abandon a great deal of their fiscal sovereignty to Bruxelles. “The ESM Treaty is a mockery and derision as far as sanity and reason but also as far as European juridical traditions are concerned. With this ESM Treaty, a small group of governments revolt against their own people,” says Rolf von Hohenhau, president of the Taxpayers Association of Europe.
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“The Greek economic infrastructure in no way is comparable with ours, and the interlacing of the Greek foreign trade with trade flows in the eurozone is very narrow.“ No, this is not a quote by a euro castigator but by Eurogroup chaiman Jean-Claude Juncker. And he said this at the end of February 2012.
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Are the economic infrastructures of the other European countries comparable with each other? Why do we have to try to make them comparable by hook or by crook or by force?

Additionally, Juncker claims to appoint a “EU commissioner charged with the task of building up the structure of the Greek economy” and to “think and think ahead” Greece’s economic policy. In other words, a bureaucrat from Bruxelles shall replace the individual and entrepreneurial initiatives of the Greeks. What will happen to the other countries of Southern Europe should their citizens vote out the “stability policy” of their current governments in future elections? Will EU commissioners take over the economic policy of all those countries? Even against the citizens will? Former ECB president Jean-Claude Trichet makes no secret of his thoughts: In extreme cases the EU countries shall declare countries bankrupt and take over their fiscal policy.

No doubt where the journey goes. Among others, José Manuel Barroso as president of the EU commission, France’s new president Francois Hollande, Italy’s prime minister Mario Monti or monetary affairs commissioner Olli Rehn call for merging the debts of the separate governments of the eurozone through Eurobonds. In the eyes of France’s new prime minister, Jean-Marc Ayrault, the ECB shall finance the crisis-hit countries directly, thus to unite Europe’s finance in one policy.

A paradigm shift is taking place. The self-responsibility–the sovereignty–of the European countries is being abolished step by step. “European countries will become like once independent American states, subservient to central power that rules from afar,” Paul Craig Roberts writes. Key representatives of this central power are not elected directly by the peoples of the EU. For example the president of the EU commision is nominated by the European Council and is elected by the European Parliament for five years.

In particular, for Germany the scheme is likely to backfire: The German economic policy will be increasingly determined through Bruxelles and determined more and more by the fiscally more clueless mentality of the southern countries. As by far the strongest economic power of Europe Germany will have to pay for an experiment that is condemned to failure.

Right from the beginning, the euro was a political currency
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lacking an economic base. A number of economists had warned: Given such a different performance of the economies of the participating countries, a common currency can’t possibly work. Their warnings remained unheard.

Obviously, the political elites do not want to acknowledge the destructive power that resides inside the euro. Even proponents of the euro are inadvertently delivering arguments against the common currency. According to the study, “The Future of the Euro,” compiled by McKinsey Germany, the euro accelerates the destruction of labor-intensive industries such as shipbuilding that traditionally are located in the peripheral countries of the eurozone. “The euro introduced a hard currency to all countries and emphasised the need for wage restraints to restore competitiveness in these industries. Consequently, the euro caused an imminent need for structural change towards new industries that are less focused on cost to avoid price competition with emerging low-cost countries.“
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What industries can these be in the age of globalism and the increasing competitive pressure from emerging countries?

Despite its structural deficits since its introduction, the euro as an alternative to the U.S. dollar gained ground in the global monetary policy. In the year 2006 the common currency replaced the U.S. Dollar as the worldwide leading cash money – although one reason for this is the fact that in the United States less and less purchases are paid for with cash. Also, the euro’s share of the global currency reserves already is above 25 per cent.

The advocates of the euro invoke the removal of currency risks in trade between the countries of the eurozone, the removal of fees on money exchange, the alleged higher economic growth in the eurozone, and the alleged peacemaking impact as the major advantages of the common currency. They disregard what might be the most important point: Against the background of the precarious economic situation of the United States the euro had the potential to replace the Greenback as reserve currency of the world. In this case, Europe would really benefit from the Euro since the Old Continent would be in the comfortable position to pay for its imports and debt with money it prints on its own (like the U.S.). So the euro could indeed create wealth by creating fiat money.

But the European political establishment proved to be unable to build the integration process on a liberal regulatory policy and sound fiscal policy. For this reason the euro suffers from questions about its future viability. The U.S. financial oligarchy and U.S. government authorities have incentives to act against the euro on the global financial markets, because the euro’s problems distract attention from the real situation of the U.S. dollar.

Keep in mind that U.S. financial institutions sold many toxic assets to European banks in the course of the U.S. real estate bubble. Since the bubble burst major European banks have been facing the threat of insolvency. By deciding to bailout the European banks from Wall Street’s toxic waste, European governments created the precedent for bailing out the banks from their over-lending to sovereign governments.

Paul Craig Roberts observes that Washington prefers a centralized United States of Europe. Compared to Europe’s variety of independent national governments, a few of which might occasionally produce real leadership, it is easier for the White House to control a central government in Bruxelles. One of the reasons that Washington is provoking the Russian government is to make Europeans fearful of Russian response and more compliant to Washington’s wishes.

The future of the euro is open. Paul Craig Roberts recommends Germany to resign from the eurozone. Instead of tying itself to the ragged European neighbour countries and to risk Germany’s exploitation in a transfer union, Germany with its economic power would do better to orientate itself towards the emerging economic powers and enter a cooperation especially with Russia, a country rich in natural resources. Such cooperation would automatically create a suction effect and would rope in at least the Eastern European countries. In this cooperation the national governments would keep their economic sovereignty and abdicate a common currency.

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ESM, Rechtliche und wirtschaftliche Analyse, Zusammenfassung und kritische Würdigung vom 14. Februar 2012, abrufbar unter http://www.taxpayers-europe.com/images/stories/ESM_-_Zusammenfassung__und_kritische_Wrdigung_der_TAE.pdf

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„Wir müssen in Athen mit anpacken.“ Interview mit Jean-Claude Juncker in der Tageszeitung Die Welt vom 29. Februar 2012.

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Ein Hauptgrund für die Einführung des Euro war die Wiedervereinigung. Deutschland musste im Gegenzug die D-Mark und seine geldpolitische Souveränität aufgeben. Es gibt eine Vielzahl von Quellen, die das belegen. Siehe hierzu unter anderem Die Tragödie des €uro von Philipp Bagus.

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The future of the euro. An economic perspective on the eurozone crisis. McKinsey Germany, January 2012, page 12.