Saturday, March 13, 2010

Towards a "United States of Europe"

The Indian economist Jayati Ghosh makes an interesting point when she says that Florida and California are in a worse financial position than Greece but that the U.S. government bails them out. Of course, not only is there fiscal federalism in the United States, something which the states of Europe just don't have, but there is also a political will that is sometimes difficult to find in Europe. Nevertheless, while it often appears that the mainstream media, including today's 'Guardian' , is quite happy to cultivate the political divisions within the E.U., we can be sure that although Greece and the other "PIIGS" (Portugal, Ireland, Italy, Greece and Spain) might not be allowed to gorge themselves on the European cake, they also won't be starved.

Firstly, however, we should put a 'Guardian' article that contends that Germany is playing a pivotal role in a bailout deal into perspective and on closer inspection we will discover that the "bailout deal" is in fact loans or loan guarantees to Greece. That is right, nobody is giving Greece anything. Moreover, while we will, no doubt, have the daily drivel, and it will be interesting to see how Germany's "Die Bild Zeitung", in particular, is going to report the so-called "bailout", playing to their respective galleries, the reality remains that this is a "compromise" solution for an E.U. which can have no interest in turning the Greeks over to the robber barons at the I.M.F.

Indeed, those "real" Europeans among us can feel happy today because what we are, in fact, witnessing is us saying goodbye to countries in the Euro zone pursuing that type of "independent" monetary policy that has seen them  disguise the true state of their economies with the "help" of those speculators at Goldman Sachs and elsewhere who then rub their hands in glee when those same economies flounder. Indeed, what are seeing is an irresistable shift in favor of those forces that want a real political union. Yes, while national sentiments are, once again, being whipped up, the E.U. has in fact taken a step closer to a "United States of Europe" and towards a fiscal federalism that will ensure real political and monetary union.

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