Why The European Union Is Doomed To Fail

Have you ever heard of Deutsch Jahrndorf? No? I don’t blame you. The tiny Austrian village, which is situated four miles from the Danube, is utterly unremarkable, except for the fact that it sits on the border of three countries. To the east is Slovakia. To the south lies Hungary. As such, within shouting distance of one another, live three peoples speaking completely unintelligible languages. Austria belongs to the West Germanic language group, Hungary to Finno-Ugric and Slovakia to West Slavic.

I thought about the exquisitely rich tapestry of European languages, cultures, customs, and nationalities as I watched the sad spectacle of Spanish riot police and Catalan separatists confronting one another on the streets of Barcelona. How on earth can the European Union unite that which history forced asunder?

The Folly of the EU

The European Union, French President Emmanuel Macron has recently declared to almost universal acclaim, needs more unity, including the creation of “a eurozone budget managed by a eurozone parliament and a eurozone finance minister”.

The need for the centralization of power in Brussels is, apparently, the lesson that the EU establishment has learned from the outcome of the British referendum on EU membership. Meanwhile, in Catalonia, millions of people have set their sights on independence from Spain. Foremost among their complaints is that the Catalan budget is influenced by Madrid.

Independence, the Catalans feel, will rectify a grave injustice occasioned by the French capture of Barcelona in 1714. The conqueror, Duke of Anjou, became the first Bourbon king of Spain under the name of Philip V. His descendant, Philip VI, is on the throne today. In Europe, ancient lineages last as long as ancient resentments.

Therein lies the conundrum of European unification.

On the one hand, people throughout much of Europe desire greater autonomy. Madrid has the vexing problem of the Basque Country to worry about as well as Catalonia. In Italy, Padania and South Tyrol in the North don’t feel like they have very much in common with the Mezzogiorno in the South. Corsica does not want to be French and Britain has only recently revisited a territorial arrangement that dates back to 1707.

 

On the other hand, every separatist movement in Europe declares its support for the project of European unification. But, how likely is it that people annoyed by Madrid, Rome, Paris, and London will be happy to have their affairs decided upon in Brussels? Will the Catalans, resentful of subsidizing farmers in Andalusia, quietly have no problem with subsidizing Polish peasants in Lower Silesia?

How Did It Go So Wrong?

Speaking of Brussels, it is both the seat of the increasingly dysfunctional EU and the capital of Flanders, which wants to separate from Belgium. It’s complicated.

Years from now, when the EU is either reformed beyond recognition or gone, historians will debate what went wrong and when. The Maastricht Treaty of 1992, which reinvigorated the British Eurosceptic movement that ultimately delivered Brexit, will be one of the obvious culprits. But I think that the problems of European integration are of an older vintage. Perhaps because it was signed by none other than Margaret Thatcher, the Single European Act of 1986 does not get the attention it deserves. Yet it was SEA that eliminated the national veto in a number of crucial policy areas and replaced it with qualified majority voting (QMV). Thatcher acceded to this new arrangement, for it was meant to break down intra-European trade barriers and transform the fledgling “common market” into a freer “single market”. Unfortunately, the introduction of QMV also meant that, occasionally, individual nation states got outvoted on issues they cared deeply about. Accusations of “meddling from Brussels” grew.

To make matters worse, the SEA engorged the powers of the Commission. That proved to be a double-edged sword. On the one hand, the Commission went after the anti-competitive practices of nation states with gusto. On the other hand, it used its new powers to start over-regulating economic activity. The regulatory and protectionist impulses of the nation states, in other words, were replaced by regulatory and protectionist impulses at the pan-European level and Europe became less competitive vis-á-vis the rest of the world. Maastricht and the Lisbon Treaty sped up the excessive centralization of power in Brussels that was already underway and transformed the European Economic Community into the EU with its own flag, anthem, and currency.

To those symbols of statehood, President Macron now wishes to add a financial transfer union, which, he feels, is necessary to make a success of the single currency. On a continent inhabited by a multitude of diverse peoples with no shared identity, Macron’s proposal, if implemented, will surely prove to be the EU’s undoing.

Soros: The European Union Is Now In An "Existential Crisis" And Trump's America Is A "Hostile Power"

Commenting on the current state of the European experiment, George Soros warned the European Union has plunged it into an existential crisis as a result of "dysfunctional" institutions and austerity mandates, and will require the bloc to reinvent itself to survive. Speaking at the Brussels Economic Forum, the billionaire investor said the EU had "lost its momentum" as he urged policymakers to abandon hopes of "ever closer union" driven by a top-down approach from Brussels, a statement which will likely displease Germany.

"The European Union is now in an existential crisis," Soros told a Brussels audience. "Most Europeans of my generation were supporters of further integration. Subsequent generations came to regard the EU as an enemy that deprives them of a secure and promising future."

Just a day after Brussels published a paper mapping out its vision of eurozone integration, Mr Soros warned that the single currency area had become "the exact opposite of what was originally intended" according to the Telegraph.

Quoted by CNBC, Soros said Europe"s "reinvention would have to revive the support that the European Union used to enjoy." The reinvention would have to review past mistakes and explain what went wrong, and make proposals to make things right.

Soros welcomed a German idea to cut European funds aimed at reducing income inequalities at the regional level for those countries disrespecting the rule of law. Both Hungary and Poland, which are net recipients of the so-called cohesion funds, have been criticized by European institution for their weak standards with regards to the rule of law.

The billionaire also reminded his hosts that "the European Union was meant to be a voluntary association of like-minded states that were willing to surrender part of their sovereignty for the common good. After the financial crisis of 2008, the eurozone was transformed into a creditor/debtor relationship where the debtor countries couldn’t meet their obligations and the creditor countries dictated the terms that the debtors had to meet."

"By imposing an austerity policy they made it practically impossible for the debtor countries to grow out of their debts. The net result was neither voluntary nor equal."

He, correctly, said loss of trust in the EU has paved the way for support for anti-European political parties and said the goal of "an ever closer union" had to be abandoned.

"Now we need a collaborative effort that combines the top-down approach of the EU institutions with the bottom-up movements that are necessary to engage the electorate," said Soros and added that "instead of a “multi-speed” Europe we should aim for a “multi-track” Europe that would allow member states a wider variety of choices. This would have a far-reaching beneficial effect."

He urged the bloc to focus on three key areas - dealing with the refugee crisis, Brexit and "the lack of an economic growth strategy".

Fight Xenophobia and Hostile Powers

Predictably, the man who some have alleged was behind the great migration movement that sent 1 million mostly Syrian refugees in Germany in the past 2 years, Soros said Europe needs to overcome the current "existential crisis" by fighting together against the rise of anti-European sentiment, xenophobic feelings and surrounding "hostile powers."

“Externally the EU is now surrounded by hostile powers: Putin’s Russia, Erdogan’s Turkey, Sisi’s Egypt and the America that Trump would like to create but can’t,” Soros said. 

He called for an update of European treaties to make the EU work better and allow a "multitrack" bloc where countries would have a wider variety of choices when it comes to integration.

Brexit

Discussing Brexit, Soros - who rose to prominence as the man who broke the Bank of England for his bets against the pound in the early 1990s - warned Brussels against punishing Britain in forthcoming Brexit negotiations and said Brussels should not get distracted with the upcoming EU exit negotiations with the U.K. and continue their work to regain the trust of EU citizens.

"Brexit will be an immensely damaging process, harmful to both sides. Most of the damage is felt right now, when the European Union is in an existential crisis, but its attention is diverted to negotiating the separation from Britain," he said.

He also said Brexit is likely to take "as long as five years" and that the EU should approach negotiations in a "constructive spirit" and should use Brexit "to transform itself into an organization that other countries like Britain would want to join", instead of seeking to punish Britain.

"The European Union must resist temptation to punish Britain and approach the negotiations in a constructive spirit. It should use Brexit as a catalyst for introducing far-reaching reforms," Soros said. "The divorce will be a long process taking a long as five years... During that time the EU could transform itself into an organization that other countries like Britain would want to join. If that happens the two sides will want to be reunited even before the divorce is completed."

Goodbye Old EU, Hello New Multi-Speed Europe

Authored by Peter Korzun via The Strategic Culture Foundation,

Hit by a wave of crises, the European Union is urgently searching a new model of functioning in order to survive in one form or another. The need to balance between unity and diversity is a dilemma faced currently by the bloc. Currencies, politics and interests differ to make a new pattern of European integration a reality.

It is expected that the final decision on the future functioning of the community will be made in December. The coming months are likely to see further turbulence. The EU faces legislative elections in the Netherlands this month, followed by presidential elections in France in April and May. Germany holds legislative elections in September.

French President Francois Hollande hosted his counterparts on March 6 in Versailles, near Paris, to prepare for a larger EU meeting in Rome on March 25. France, Germany, Italy and Spain used the occasion to express support for a multi-speed Europe in a joint effort to cushion the impact of the Brexit. «Unity does not equal uniformity», French President Francois Hollande told reporters ahead of a working dinner with German Chancellor Angela Merkel, Spanish Prime Minister Mariano Rajoy and Italy’s Premier Paolo Gentiloni. «For this reason I support new forms of cooperation», he said at a joint press conference with the other leaders. Some EU member states could «go more quickly» and «further in areas such as defence and the eurozone, by deepening the economic and monetary union, and by harmonizing fiscal and social policy», the French president said. Other EU members could choose to opt out of measures intended to deepen integration, he added. Hollande also emphasized the need for a European defense that would operate in coordination with NATO.

He was backed by his German counterpart. «We must have the courage to accept that some countries can move forward a little more quickly than others», German Chancellor Angela Merkel said. She insisted that other member states should be able to join the more advanced ones when they are ready. «A Europe of different speeds is necessary, otherwise we will probably get stuck. If Europe gets stuck and doesn"t develop further, then this work of peace may run into danger faster than one might think», Merkel noted. The chancellor was one of the first to mention this solution in February at the informal EU summit in Malta.

The concept allows some member states to press ahead with integration faster than others. Those in the «slow lane» would restrict themselves to participation in the single market and co-operation on foreign and security policy.

Besides Germany and France – the European Union’s «engine» – the concept of multi-speed Europe is supported by Italy, Belgium, the Netherlands and Luxembourg and several other rich EU nations. The Baltic States are likely to back it too.

In the preparation for the EU summit in Rome on the occasion of the 60^th anniversary of the Treaty of Rome, the European Commission unveiled on March 1 new ideas to keep the bloc unified. The White Paper on the Future of Europe foresees five possible scenarios for the continent by 2025: to carry on as usual; function as a single market only; do less but be more efficient; allow groups of member states to advance at their own pace; or do far more together. Thus, the EU’s executive branch is passing the buck to the member states to decide in which direction the EU should be heading.

The Commission President, Jean-Claude Juncker, argued in the European Parliament that a multi-speed Europe was the best solution. EU leaders are now considering Juncker"s options ahead of the Rome summit, where they will make their own declarations about the way forward after Britain"s expected departure in 2019.

The implementation of the multi-speed Europe concept would see some EU countries grow more united on economic and defense matters while allowing other states to catch up later. The «core» EU states could move faster and further in deepening the eurozone and harmonizing their fiscal and social policy.

The idea presupposes breaches in the basics of European integration, such as the single market, or the four freedoms of movement, capital, goods and services. In a nutshell, it all boils down to EU integration in subgroups, which is already de facto happening.

Today, the EU is divided into clubs, at times overlapping mini-coalitions based on shared geography or interests. Some countries belong to the Eurozone, some belong to the Schengen Zone, and some EU members strengthen cooperation within the European Patent Network. Germany, Sweden, Belgium the Netherlands and Austria consider the idea of creating a «mini-Schengen» and collectively close off their borders to the rest of Europe to halt the flow of refugees into their countries.

Last September, Greece organized a summit of Southern European countries – the so-called Club Med. They are prone to support more protection measures and want Brussels to give individual governments more leeway to spend and borrow as they see fit.

There is the Visegrad Group of emerging Central European powers – Poland, Hungary, Slovakia and the Czech Republic (V4). There are the tiny Baltics who share much in common. And there is the Nordic Council (whose members include non-EU Norway and Iceland). Actually, Scandinavia is already a bloc within a bloc. These nations are historically close to make them natural bedfellows. The Nordic Council’s activities never hit media headlines, but this union already exists to aid the Northern European international governance.

The Visegrad countries have refused to take asylum seekers and migrants despite EU demands for solidarity.

Hungary"s leader Viktor Orban wants to build an «illiberal democracy« and the Polish government is under EU monitoring over alleged constitutional violations. On March 2, a day after the White Paper came to light, the Visegrad group members issued a joint declaration to the effect that find the idea of a multi-speed Europe unacceptable. They look upon a multi-speed Europe as a sign that they will be treated as poor relatives or second-class citizens.

Multi-speed Europe would create rival blocs and perpetuate divisions, with France and Germany setting the rules with others left to catch-up. Countries outside the core will be marginalized being kept outside of the decision making process. The EU is to become a loose alliance, a patchwork of blocs within blocks.

Calling a spade a spade, the EU is a bloc on the verge of destruction. The process of disintegration has started and it is unstoppable. A multi-speed Europe is merely recognition of the reality. This is the time to say goodbye to the EU we once knew. A patchwork of clubs is emerging instead to change the European political landscape once and for all.

EU Lawmakers Urge "Federal Union" For European States... Or Else

The leaders of the lower chambers of parliament of Germany, Italy, France, and Luxembourg have called for a European “Federal Union” in an open letter published in Italian newspaper La Stampa on Sunday.

In the letter, four representatives of EU governments – Claude Bartolone of the French National Assembly, Laura Boldrini of the Italian Chamber of Deputies, Norbert Lammert of the German Bundestag, and Mars Di Bartolomeo of the Luxembourg Chamber of Deputies – say that closer cooperation is essential for dealing with problems that no one EU state can tackle on its own, such as immigration, terrorism, and climate change. As RT notes, the letter’s authors also warn that the European integration project is currently more at risk than ever before, with high unemployment and immigration problems driving populist and nationalist movements. The EU must also come to grips with the fact that, last June, the United Kingdom decided to leave the union after holding a national referendum, aka Brexit, becoming the first member nation to opt out of the bloc.

In less than a month, on March 17 next, we Presidents of the national parliaments of the EU we will meet in Rome, how will the representatives of governments, for the sixtieth anniversary of the Treaty from which it began: our Union.  

But it is plain for all that recurrence requires much more than just a historical commemoration. Birthday comes the most critical stage ever crossed by the European project. 

...

In such a situation we should not be paralyzed by fear, or by concerns related to the upcoming elections in some of our countries. We must act now, before it"s too late. And take the opportunity of the anniversary to return to the vision and the spirit of the Founding Fathers and relaunch the construction of Europe on foundations refurbished.

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We are convinced that in the face of crisis, we need more Europe, although we have to face headwinds. We can not ignore the social impact that the disastrous economic and financial measures have had on tens of millions of families. We need to focus on growth and jobs that Europe can have no charm for young people if they do not offer them credible job prospects. We must have the courage to share sovereignty in many sectors in which the action of individual States is now totally ineffective and doomed to fail: from global warming to energy policies, from financial markets to the rules for immigration, tax evasion to the fight against terrorism.  

Now is the moment to move towards closer political integration: Federal Union of States with large skills. We know that the prospect stirs up strong resistance, but the inaction of some can not be the paralysis of all. Those who believe in the European ideal is to be able to revive rather helplessly to its slow decline. And the United States who do not want to join immediately in that closer integration should be able to do it later. 

On Sunday, a number of EU states, including Germany, France and Italy, called for the UK to pay a hefty price as a “divorce settlement.”

The letter was published in the run-up to a meeting of parliamentary leaders in Rome on March 17 to mark the 60th anniversary of the Treaty of Rome, which established the European Economic Community (EEC). The treaty’s signing by six countries– Belgium, France, Italy, Luxembourg, West Germany and the Netherlands – in 1957 eventually paved the way for the Maastricht Treaty and the European Union in 1991.

In September of 2015, Lammert, Bartolone, Boldrini and di Bartolomeo also signed a declaration calling for deeper and faster European integration. However, greater European integration is being increasingly challenged by a number of Eurosceptic parties around the continent, including the Alternative for Germany, the National Front in France, and the Party for Freedom in the Netherlands. Upcoming elections could bring these parties closer to power.

According to the European Parliament’s chief Brexit negotiator, Guy Verhofstadt, the European Union must reform, or it risks disappearing under a barrage of internal and external attacks.