The future of the euro will also be decided by political means. The obvious and logical path is the unification of all state policies, centralizing control of all the “levers” in a single center. This means the complete liquidation of whatever remains of national sovereignty and the construction of a European empire. At present, there are quite a few voices in favor of this option. True, they speak only of unification, not of an empire, but, obviously, one cannot exist without the other.
The European constitution, disguised as the Lisbon agreements, is slowly coming into force. In 2014, some purely imperial provisions will take effect—for example, those regarding the right to withdraw from the Union. Henceforth, in order to exit the EU, a decision of the Council adopted by a qualified majority will be required: 55% of the votes of Council members (at least fifteen countries), and these countries must represent at least 65% of the Union’s population. Any other four countries can block this decision. In other words, the EU will become a closed club with a rule of “admission costs, exit costs double.” Thus, before this happens, the elites must decide what game they will play.
We are currently at the beginning of the EU’s reformatting under the influence of the crisis, in which vectors and players are only being formed. Several obvious factors can nevertheless be named that will determine events.
First, states always and everywhere develop according to the logic of a cancerous tumor, and this greatly facilitates forecasting. This is, so to speak, the strategic circumstance. In our case, it means the fundamental interest of part of the European elites in a new European empire. The European Union with state legal capacity is, first of all, a new debtor with a clean reputation. Such a system must be created at least to continue the debt race, now not within the framework of nation-states up to their ears in debt, but within the framework of the Union as a whole (practically everyone has advocated for eurobonds). On the other hand, the ECB, whose “independence” can now be safely mourned, opens new unprecedented opportunities for inflation—again, on the scale of the entire Union.
Second, we can already safely say goodbye to a strong euro. The ECB, as expected, did not become the “European Bundesbank.”
Third, the reforms that the ECB is currently demanding from countries in distress are, let’s say, aimed not at solving the problem, but at producing the necessary reporting to buy time. The plan of euro-bureaucrat and mainstream economist Mario Monti, who became Italy’s technical prime minister, is a vivid example of this approach. Monti’s “austerity” is internally contradictory. It does nothing to solve the problem of economic growth from which Italy suffers; some of its measures—tax increases, in particular—are directly aimed against economic growth. This is more of a fiscal plan than a reform plan. Monti may well manage to reduce some portion of Italy’s debt, which will be proclaimed as a great victory, but then everything will return to the way it was, since the underlying causes will remain. There is no reason to believe it will be any different in other countries: neither the national elites nor, especially, the euro-integrators have any interest in real economic reform—they have long since declared genuine economic reform “politically impossible.”
Fourth, it should be understood that most “peripheral” countries joined the EU not so much to stimulate their own growth, but to preserve the status quo. Simply put, they joined not in order to develop, but in order to do nothing. They found it difficult to maintain high levels of government spending and “social” payments on their own, so they counted on the EU’s help in this matter. Now, when the EU is facing the threat of austerity policies, the elites of these countries will have to think about what game to play.
Fifth, in the event of a hypothetical departure of the “periphery,” developed countries also lose the advantages of the Union. Developed countries, as we said, benefit from being standard-setters that suppress competition. Actually, the deal between developed and peripheral countries, on which the EU holds together, can be formulated as “suppression of competition in weak countries in exchange for financial assistance.” If the weak countries leave, then for the strong countries the Union will also lose a significant part of its attractiveness.
In conclusion, it can be said that if the EU were a completed project, one could safely speak of its collapse. However, unfortunately, this is not the case. The euro-integrators still have a large ideological reserve in the form of an unfinished empire; they are now actively explaining to everyone that the empire, with its unification of state policy, will be able to solve the problems the Union has faced. Since we are at a point where interests are being formed and, strictly speaking, the circumstances in which they are formed are only emerging—for example, changes in US policy after this year’s elections are theoretically possible—it is impossible to say exactly how events will develop. Both a long and painful reformatting of the EU into some conglomerate of countries with varying degrees of integration, and the rapid construction of a unified empire are practically equally probable. Since the root of the problem lies in unbacked fiat money and, consequently, as we said, financial activity is actually a “betting contract,” the next upheavals in the financial world can happen at any moment, and they can greatly influence the nature of political processes. One can say with absolute certainty that the fiat money system is doomed, but how long its agony will last is an open question (let us not forget that plans for the creation of a world central bank that will engage in inflation of fiat money on a global scale, and behind it a world government that will borrow globally, have not been canceled).