Tuesday, December 13, 2011

Euro-commentary

I'm not an economist. The last time I had a hard look at the history and politics of Europe was some time in the mid-1990s. I don't have much by way of valuable analysis of the current European SNAFU.

What bothers me, though, is the shortage of useful commentary from the professionals.

We all have a bunch of lightly-held priors. Here are mine:

  • A European federalist settlement would be a great deal more democratic than the current settlement enjoyed by most - if not all - Europeans
  • Monetary union is an accelerant to political union, and therefore, European federalism (although political union and federalism aren't necessarily the same thing)
  • There's a cart-horse problem with monetary union - that it can only work in the presence of political union, but political union is unlikely unless it's created by the experience of the Euro. This appears to be what we're seeing, albeit in a hasty and risky form.
  • The Euro was implemented very badly. Allowing countries with large black economies to be part of it was potty in the first place (in my defence, I've spent the last decade telling everyone that I know that the Euro is ultimately doomed as long as it includes an unreformed Italy)
  • The presence of unreliable, anti-democratic governments like the Italian one within the Euro meant that it was only ever going to be a fiscally conservative union (and I'd add that, from what I can see, the case with Greece is slightly more complicated, but the conclusion is the same). A lack of cohesion makes this inevitable. 
  • Britain is a politically conservative place that won't vote for the democratic improvements that a federal Europe would bring. This can be partly explained by it's democratic shortcomings - ones that could be removed by a good federalist settlement. Cart and horse again.
  • Britain is, however, one of the most atlanticist forces within the EU and had a strong strategic interest in bringing Eastern European nations into the European sphere of influence. Bringing unequal economies into the EU may be a good move from the viewpoint of national governments seeing strategic alliances, but not good from the Federalist viewpoint. 

So, in the long run, I'm a federalist. But I'm also in favour of a Citizens' Basic Income and Land Value Tax. Both policies that I think would work very well, but ones that don't have an obvious route-map leading to them.

The problem with the way that this seems to be discussed - almost everywhere that I've seen - is that most commentators are letting their priors shape what they say. It's all wishful thinking rather than analysis.

As a federalist, I'm happy to consider the possibility that Cameron did the right thing for non-federalist Britain (though the description of his positioning and negotiating doesn't inspire much confidence). Similarly, I'd be interested to read a British Eurosceptic (sic) saying that the UK may have been out-manoevered quite badly.

The forecasts around the success of the Eurozone seem to be very wide-ranging. Why are Europhiles only capable of predicting success? And why are Eurosceptics only capable of predicting failure?

And why are editors incapable of finding Europhile Eurozone pessimists and their mirror image? We'd learn more if they could - and it'd be more interesting as well.

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