At the End of the Day

Events are turning the EU into an eulogy

There  is a terrific piece by Wolfgang Munchau in the FT (£) today.

Without Herr Munchau in recent years, I would’ve got lost in the labyrinth of EU fiscal and economic policy. Before I had any really useful contacts in EU banking or business, I read all his pieces warning against over-confidence. It seemed to me he was always more willing to contemplate the unpalateable outcome than most – a brave genius he shares with Ambrose Evans-Pritchard at the Daily Telegraph. He hasn’t lost the knack.

Wisely rejecting Cameronian Big Bazookas, Munchau’s article today points out that promises of firepower and super-weapons merely raise the expectations of already neurotic markets. From this he extrapolates two simple conclusions. One, the bigger the weapon, the more folks there will be guaranteeing it….some of whom shouldn’t be guaranteeing a warm afternoon in southern California. Two, all this does is shift the guarantor from being a bank to a Treasury. (The lenders are easy either way, which is why Governments who give them houseroom are always supping with the Devil: all lenders want to know is where the buck stops.)

Clarity is Wolfgang Munchau’s secret weapon, and bollocks his preferred target. Forget shifting the money around and borrowing to buy bigger guns: just tell the lenders “All for one and one for all”. This is his candid advice – as indeed, it was two months ago – and had it been heeded, the EU would be on track for a rocky road to survival. But Munchau is far too dignified to point this out.

The German nation (and less willingly I suspect, Frau Doktor Merkel) decided this was too high a price to pay. I understand entirely why (nobody likes being made to feel foolish by the idle of the world) but history will see it as the death-knell for the European Union. The Western World’s financial collapse would’ve continued unabated, but out the other end there would’ve been an EU.

The majority part of me is delighted that the EU is now riding on a bucket down to Hell. This may sound vengeful, but I feel no vengeance at all, only relief. The relief is something that began as a means to an end – peace – will not be allowed to finish the course. Along the way, its objective changed abruptly to being the control of everyone and everything in a ghastly superstate dedicated to illiberal pc and anti-deomocratic protectionism. Had it lived, the Union would’ve collapsed in on its own complexity in the end. Just like the USSR in fact – but just look at how many had to suffer and die needlessly until that disappeared.

If there is one thing the eurozone (or indeed the whole Union) lacks, it is indeed elegant simplicity. It has become a Babel for our times – 27 bureaucratic languages (none of which has a word for humility) and no clear direction beyond Being. ‘Growing by getting bigger’ would be its strapline, were it a brand.

This clearly isn’t enough. Big is almost always unloveable. But most destructive of all, the starting assumption of perfection means there is no way to stop the machine, or get off. Hubris was the EU’s first problem, and it will be its last: we are unsinkable, so to hell with the lifeboats. Imperial Great Britain simply couldn’t believe any Asian nation would ever be advanced enough to launch an attack on Singapore. So when the Japanese did attack in 1941, the guns would only point in the wrong direction. The human race doesn’t change much over time.

Along the way from European Economic Community to Union, there were 3 or 4 points where one sane person in the room could’ve put a hand up and said “This won’t work”. The biggest one of all was after the corrupt negotiating frenzy of the late 1990s, when central fiscal discipline was rejected by the French, and weak economies invited in with open arms by the Germans. After that, Der Untergang – La Chute – was inevitable

My minority bit sees its collapse as a shame in some ways, but a blessing for the liberties of most Europeans until smaller egos might wind up doing the building at some point in the future. But there is also very real danger because, in the meantime, the shadows of ghosts thought long-dead will creep over the continent. One is called War – and nobody should be so naive as to rule it out. Most Sloggers loathe the EU, but is some ways it was a necessary evil: American nuclear power has kept a global peace between superpowers for 66 years, but making France and Germany economically interdependent has been the key to keeping conventional war away from Europe.

As an EU contact wrote to me recently, ‘When you arrive in Brussels, the first thing that happens is you’re taken out to lunch, and told that the game-plan is to control the German ego’. Somebody should’ve added ‘and smack down French cheek’, but the point is well made. That control is now gone. Sure, there’ll be more liberty. But how easily that can turn into license.