Streetwise Professor

June 27, 2016

MOAR! Europe

Filed under: Economics,Politics,Regulation — The Professor @ 9:30 pm

In my first Brexit post I wrote:

European leaders–Merkel most notably–are fond of saying “More Europe,” meaning more centralization and more suppression of local control. If they want Europe to survive as a political entity, they need to reverse their mantra to “Less Europe.” They need to reverse the creation of a hyper-state. They need to be more respectful of local, national sentiments and differences. Brexit shows that if they fail to do so, they are running the serious risk of having no “Europe” at all.

Are they heeding the lesson? Early signs suggest no. So be it. They are reaping what they sowed, and if they decide to sow more, so shall they reap.

The first day of the first post-Brexit week brought reports that the Euros are indeed doubling down, and moving to MOAR! Europe. From the (rabidly pro-Remain) FT:

The German, French and Italian also called for a “new impulse” to revitalise the EU. They are considering common EU-wide initiatives in security, external border control, antiterrorism measures, and in boosting economic growth and employment. Recognising the disenchantment of many young Europeans with politics, they pledged to focus on youth-oriented proposals, such as educational exchanges. “We must not simply wait for what happens. We know that must not waste a single minute,” Mr Renzi said.

Two less posh (and anti-EU) publications filled in some details. I don’t vouch for the reliability, but they do jibe with the “new impulse” theme:

The foreign ministers of France and Germany are due to reveal a blueprint to effectively do away with individual member states in what is being described as an “ultimatum”.

Under the radical proposals EU countries will lose the right to have their own army, criminal law, taxation system or central bank, with all those powers being transferred to Brussels.

The public broadcaster reports that the bombshell proposal will be presented to a meeting of the Visegrad group of countries – made up of Poland, the Czech Republic, Hungary and Slovakia – by German Foreign Minister Frank-Walter Steinmeier later today.

Excerpts of the nine-page report were published today as the leaders of Germany, France and Italy met in Berlin for Brexit crisis talks.

In the preamble to the text the two ministers write: “Our countries share a common destiny and a common set of values that give rise to an even closer union between our citizens. We will therefore strive for a political union in Europe and invite the next [other?] Europeans to participate in this venture.”

“Invite the next Europeans to participate in this venture.” Not too Orwellian, eh? Sounds like Don Corleone making an offer they can’t refuse. No RVSP necessary.

This would throw down the gauntlet to tens (and likely hundreds) of millions of Europeans who might prefer to decline the invite, thank you very much.

It brings to mind Eisenhower’s dictum: If a problem cannot be solved, expand it. By spurning the lessons of Brexit, the Eurogarchs are either going to succeed in jamming their vision down the throats of 500 million people (435 million, excluding the UK) or bring down the entire edifice trying.

And have no doubt, these “leaders” (“drivers” would be more apt) will not let anything as trivial as widespread popular opposition deter them. Consider the president of the European Parliament, Martin (“Don’t Call Me Sergeant“) Schulz:

Screen Shot 2016-06-27 at 10.04.10 PM

Clearly a gaffe by Herr Schulz: he spoke the truth. The EU philosophy is profoundly anti-democratic.

Good luck with your Fourth Reich, Marty. The first three worked out so swell.

European Union president Jean-Claude Juncker, widely blamed by eastern Europeans in particular for Brexit, has taken a similarly hard line:

Jean-Claude Juncker said on Friday: “The repercussions of the British referendum could quickly put a stop to such crass rabble-rousing, as it should soon become clear that the UK was better off inside the EU.” Britain simply has to go, on bad terms, pour encourager les autres.

“Take that, you crass rabble rousers! And to show how mad I am, I won’t speak English.”

Juncker is also supposedly about to announce a plan to force the eight EU states that are not on the Euro (e.g., Denmark, Bulgaria, and Sweden) into the Eurozone. More doubling down.

(As an aside, Juncker is a notorious drunk–it is common knowledge that it is hopeless to do business with him after 3PM, because he’ll be sloshed–and Schulz is also an alcoholic. You’re in the best of hands, Europe!)

And what will they get if they succeed in achieving their goal of a Leviathan that swallows 27 states? A perpetuation of economic stagnation due to excessive, pervasive, and absurd regulation often adopted in the name of grandiose goals. Here’s an illustration of how absurd:

The EU is poised to ban high-powered appliances such as kettles, toasters, hair-dryers within months of Britain’s referendum vote, despite senior officials admitting the plan has brought them “ridicule”.

The European Commission plans to unveil long-delayed ‘ecodesign’ restrictions on small household appliances [like kettles and vacuum cleaners] in the autumn. They are expected to ban the most energy-inefficient devices from sale in order to cut carbon emissions.

Not a sparrow falls . . .

And pray tell just how many thousandths of a degree would this shave off global temperatures? Who cares? This is virtue signaling in jackboots. Here’s the best part:

At the meeting, Jyrki Katainen, the Commission’s vice president for growth, said they should push ahead with the plans for standardised energy usage limits as they could contribute significantly to emissions targets.

The “vice president for growth.” How Orwellian is that? This is a pitch perfect example of the anti-growth effects of EU policy.

This strategy of expanding the problem will increase and perpetuate the geopolitical risk that has shaken the markets. It will intensify a confrontation between elitist and populist forces in Europe, with unpredictable results. I don’t know how it will end, exactly, except that it is unlikely to end well.

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10 Comments »

  1. The proposal of a superstate, at Višegrad group no less (Germany proposing Poland abandon sovereignty) surely sounds like a bad hoax

    Comment by Ivan — June 27, 2016 @ 10:32 pm

  2. The source being TVP, a state TV recently converted into a party mouthpiece among protests, this definitely is a hoax.

    Comment by Ivan — June 27, 2016 @ 10:40 pm

  3. Sovereignty, meaning MOAR! State, meaning more Party comrades in control of everything, is the overarching agenda of this lot.

    Comment by Ivan — June 27, 2016 @ 10:47 pm

  4. @Ivan: Expertly phrased :-)

    Dear EU,
    We, the people, would like you to stop trying to control everything in our lives in minute detail. You have already pushed the Brits out the door (to their cost and ours) yet you seem to be determined to do it again.
    Stop it.
    Sincerely,
    Somebody-who-is-actually-pro-EU-but-will-eventually-change-his-mind-if-you-keep-this-up.

    PS – Please do something about our external borders. Not a US-Mexico-style wall, but it would be nice if columns of thousands of illegal immigrants couldn’t simply walk in unchallenged.

    Comment by Hiberno Frog — June 28, 2016 @ 2:51 am

  5. The Schulz quote seems to be from a satire, though I can believe the sentiment is real.

    https://twitter.com/ProfessorWerner/status/747696818021081088

    Comment by James — June 28, 2016 @ 4:44 am

  6. As a historical point, I would say that the First Reich (the HRE — incidentally a remarkably *pro*-democratic institution for its era, surpassing even the UK with their Great Parchment) did work out pretty well. A roughly 500 year run ain’t bad. It’s up there with the two Roman governments (Republic and Empire), the post-Glorious Revolution British monarchy, and the better Chinese dynasties in terms of longevity, even if it doesn’t rise to the level of (notably less ambitious) governments like those of the Holy See or Oxford University.

    Comment by Sam — June 28, 2016 @ 7:42 pm

  7. So, “unexpectedly”, the Višegrad countries have clearly expressed their thanks-but-no-thanks on the Fourth Reich ideas. Two shocks within a week for the beurocracy?

    Comment by Ivan — June 29, 2016 @ 11:27 am

  8. @Sam-Come on. Work with me.

    The ProfessorComment by The Professor — June 29, 2016 @ 5:51 pm

  9. Desperate attempt to keep the rickety caravan moving ‘forward’.

    Cos once it starts going backwards …

    Wonder what will come first: the implosion of the EU, or the implosion of the euro area? Small investors like me want to know, dammit!

    Comment by Ex-Regulator on Lunch Break — June 30, 2016 @ 12:34 am

  10. you should spend a few minutes reading how the mechanisms of the EU actually work – even Wikipedia does a reasonable job. It doesn’t matter what Juncker says or indeed what any MEP says – the extent of EU powers is strictly controlled by the Council, not the Commission or the Parliament. And since the last attempt to extend EU powers was defeated in a number of European referenda (when is the last time the USA put extending Federal power to plebiscite?), all members have suspended even talks on talks on a new treaty or treaty amendment. Without unanimous council support (and currently there is zero support for it) no extension of EU powers are envisaged for the next decades.

    It’s like reading some ignorant socialist European criticizing the US by the quoting some state senator from bumf*ck county or some idiot congressman (I presume you have balloon headed politicians in the US also?) and then sneering that the USA is a silly joke. I know the professor has robust political views but there’s no need to descend in zero-hedge levels of deliberate ignorance.

    And by the way, check out the state of London before it became part of a single market of nearly half a billion people – it was a crumbling backwater. Large liquid and efficient financial centers require large “real economy” hinterlands- outside the EU it will serve an economy an eight of the size of the EU.

    Comment by Derriz — July 4, 2016 @ 1:37 pm

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