Streetwise Professor

There may be a more annoying geopolitical entity in history than the EU, but I’ll be damned if I can think of one.

In recent weeks, a group of northern EU states centered on the Netherlands have formed the “Hanseatic group” to represent their positions, regarding the Italy situation in particular.  This has outraged the French and the Germans.  In response to the blonde upstarts, French economy minister Bruno le Maire lashed out:

Speaking at a dinner with his Dutch counterpart Wopke Hoekstra in Paris on Thursday, Bruno Le Maire said he was “not comfortable” dealing with the Hanseatic group — eight to 10 countries that have agreed common positions calling for more national responsibility and stronger rules in the eurozone.

“Let’s imagine that France tries to create a club of the southern countries with Portugal, Italy, Spain — what would be the reaction of the other member states? Do you think that it would be a positive one? Do you think it would improve the situation of Europe?” Mr Le Maire told the Financial Times.

“I am not comfortable with the idea of creating new circles, new clubs, new leagues within Europe. If you want to create new divisions between the north and the south, or the west and east, you will never have France on your side,” said Mr Le Maire, who has spearheaded French ambitions to reform the eurozone in a partnership with Germany.

Some Franco-German initiatives, such as a blueprint for a eurozone budget, have met resistance from countries led by the Netherlands. The group has also advocated tougher enforcement of budgetary rules and moves towards debt restructuring in the eurozone to be agreed by EU governments next month.  (Emphasis added.)

Did you catch that?  Franco-German ambitions to reform the eurozone–OK!  Lilliputian resistance–BAD!!!!

When the hypocrisy was pointed out, Bruno a dit non! non! non! C’est totalement différent!

When asked whether the Franco-German alliance was not a “club”, Mr Le Maire said: “That is totally different. This is not a club. This is what is at the core of the European ambition: peace between France and Germany. This is at the core of the European Union.”

So, is M. Le Maire suggesting that absent the EU, jackbooted Germans would soon be marching in the shade along the tree-lined French roads?  If he is, that’s quite the insult to Germany, non?  But if he is, he is utterly delusional: to quote Patton, the post-post-modern Germans couldn’t fight their way out of a piss-soaked paper bag, and what’s more, have no desire even to try.  They’ve found alternative means to achieve dominance over the continent, and the French are now their (junior) allies in that endeavor.  A key part of that strategy is divide-and-conquer, and “clubs” like the Hanseatic one threaten that gambit.

Germano-French ambitions extend beyond Europe.  They want to leverage their dominance in the EU to a position of world influence.  Fortunately, here their efforts have proven again and again to be laughable.

A particularly juicy example is the hilarious efforts of the EU to set up a special purpose vehicle to facilitate trade with Iran in defiance of US sanctions, pour epater le bête orange.  They have made grandiose announcements.  Only one problem: European companies don’t want to touch this with a ten foot pole.  Make that two problems: no European government wants to touch it either:

So up to now the commission has been unable to find a home for the SPV. Not even a post restante address. No EU country has offered to host it. The sad SPV has been wandering between railway stations and airports, without a nationality, a bank account or even a real name. If I passed it on the street, I would put a euro in its hat.

Har!

And as I’ve pointed out since the day of the announcement, it is an utterly pointless exercise because it addresses every issue except the one that matters: secondary sanctions.  Once the US seized upon this mechanism, any attempt to circumvent sanctions by avoiding the dollar became utterly pointless: do a barter deal, or a Euro deal, or a Venezuelan crypto bolivar deal with a sanctioned Iranian company, and the Treasury will still hammer you.  So, if you want to do all your biz in cryptobolivars–knock yourself out! But if you want to do any business with the USD at all, think twice about dealing with a sanctioned entity by an SPV or any other way.  And pretty much every European company has decided that one thought is sufficient.

M. Le Maire seems to be getting a glimmer of a clue that the EU is a geopolitical lightweight:

“I’m not sure the Hanseatic League would be in a position to face the competition with China and the US”, he said. “If we are creating closed clubs, alliances within the EU then we run the risk of losing time and weakening our common project.”

Bruno. Dude: the EU is not in a position to face competition with China and the US.  This is proven daily.

So under German-French “leadership” the EU is likely to lurch along like it has been for years.  Compensating for their inability to achieve their vaulting global ambitions by beating up on the EU’s smaller members.  Annoying.  But in the end, risible and pathetic.