The euro crisis exhibits the fatal state the EU and capitalism is in at the moment. When the euro falls, we expect the entire union to go with it. What real continents with real people and real communities need is rational mergers, not profit-motivated ones.
The chief reason for the colossal debts of many EU member states and the imminent breakdown of the common currency is that the union did not first require a minimum of sound socio-economic development in local areas. From the beginning, the European common market was based on the four freedoms of free flow of capital, goods, services and labor.
According to PROUT, a socio-economic merger between two or more mutually foreign areas should not take place until a number of basic features are properly developed and fulfilled by all parties. These include same economic problems, uniform economic potentialities, ethnic similarities, the sentimental legacy of the people, and similar geographical features. In Europe, as on most continents, there is vast scope for utilizing the inherent dynamics of these features, leading to proper mergers of countries and regions once the welfare of all has been developed to a significant extent locally.
It may be that the concept of a common European market was conceived of and realized in a war-weary atmosphere that cried out for peace in Europe and indeed the world. True, there is little use in arguing against war. However, it is also true that the EU in its present form was never a remedy for lasting peace. What we have on our hands now is menacing economic, military and other forms of instability both on the European continent and throughout the world.
To begin with, UK government officials now express fear that when one member state leave the euro, investors in both that country and other vulnerable Eurozone nations would transfer their funds to safe havens abroad. Borders are expected to be closed (barring money smuggling) and the British Foreign Office is preparing to evacuate thousands of British expatriates and holidaymakers from stricken countries, The Telegraph (UK) reports.
Dozens of top banks in wealthy European countries are hugely exposed to Greece, Ireland, Italy, Portugal and Spain through loans to companies, households, and financial institutions. The tsunami following the breakup of the euro will have an unprecedented impact on the entire world economy and could trigger a global depression, according to economists at HSBC.
Under EU rules, capital controls can only be used in an emergency to impose “quantitative restrictions” on inflows, which would require agreement of the majority of EU members. Controls can only be put in place for six months, at which point an application would have to be made to renew them.
Such strict regulations, and there are thousands of them, will be another hugely detracting factor in the scenario that is expected to unfold following the fall of the euro. Countries are expected to demand long periods for planning and implementing domestic control mechanisms, such as protectionism, which so far has been out of the question as far as EU has been concerned.
The situation is indeed explosive and the EU as we have come to know it may very well be a thing of the past soon. PROUT stands for united and well-integrated continents and indeed a one world political unit instead of a platform of financial exploitation and opportunism.
May the euro and the present EU both rest in peace.
Copyright The author 2011