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The Days Of The EU Are Numbered

Posted in Business and Law, and World Affairs

Looking back at the original intentions of the Treaty of Rome in 1957, the premise was to secure mutual economic benefits to neighboring countries and to strengthen allied defenses after two World Wars. All the countries needed rebuilding, yet there was always opposition and natural apprehension, sovereign states unwilling to share secrets or get too close and like anything, trust has to be earned.

Elements of free movement and a European Parliament came later and talk of a single currency went through many stages before it finally happened. Trying to band together countries with different cultures and economic systems was never going to be easy, so trying to tie in a united system of law was always going to come up against stiff opposition. They tried calling the currency the Ecu (Euro), but that was vetoed and then they tried to implement Esperanto as the European language and that phased out quickly too. The problem is that whoever was in government at the time makes those changes to join or sign additional agreements to EU policy. Subsequent governments then struggle to undo any mess it created.

This is what Greece faces and the anti-austerity measures. The Drachma is making headlines; Greece has been in crisis for more than the six official years it has asked for a bail out. Experts estimate it will take two generations before Greece can begin to stand on its own feet again. Consider a generation is about twenty-five years, so that’s a long time to wait for growth and hope. Would this have happened if the single currency never existed?

Is exiting the EU a sensible decision? I think it is the wisest one, yet the EU wants to keep Greece in, not because they want to help them, but if they leave it will look as if the EU has failed. It has been failing for many years, but clings to power and coerces other member states to stay the course; without the newer member states like Estonia, Poland or Hungary there would be little support. These newer states benefit greatly, but the price paid is to give up some of their sovereignty.

Despite numerous and fruitless emergency talks to resolve the Greek issue and proposals of EU reform, the Danes are also seeking measure for EU reform. The right wing party are backing the UK who have proposed a number of issues, mainly a cap on migrant workers and benefits as they have now defeated the left wing party. The anti-EU policies are what the public want and the mantra is, “To keep Denmark Danish.” The richer EU countries have suffered as those from poorer countries have moved to their states to make use of the welfare systems of other countries and take jobs for less pay, pushing down the rate of inflation and contributing to unemployment figures.

The recent decision of Iceland withdrawing its application to join the EU also speaks volumes. It has learned from other countries that find themselves financially unstable. Ireland, Greece, Portugal, Spain, and Cyprus; all have declared they needed a bail out. Why? Most over valued the Euro and lived off credit, prices rose but wages didn’t as migrant workers forced the cost of labor to be lowered. Residents then couldn’t afford mortgages or to buy things, resulting in a slump.

For an economy to survive it needs money to go full circle; workers earn, buy houses and goods and that money goes back into the community and the country. The circle is broken when goods are priced higher than the wages earned, workers earn lower wages as cheaper labor arrives from other EU countries and those migrant workers send all the money home and rent cheap accommodation. A small percentage was going back into the community and after a few years on credit could no longer survive and the full impact began to show.

Exiting the EU is not all doom and gloom. Tales of high taxation, companies leaving if the UK leaves the EU, higher import taxes and difficulty of moving around the countries are all scaremongering. If the UK left the EU then VAT (Value Added Tax, a pun if I ever saw one) would be lower. This is the tax that funds the EU bodies and the tax ranges from 15-27%. Imagine how much Greece would save as their VAT rate is 23% on all goods and services.

Norway is a prime example of having close relations with its European neighbors, but is not an EU member. As a member of EFTA (European Free Trade Association), which grants favorable trading terms and taxes, free movement of workers (they did not oppose this and have allowed it) and as a member of Schengen there is free movement for EU citizens to travel visa free. So they pick and choose what works for them without being obligated. In addition they can join and support other EU projects for example on defense. Leaving the EU and taking a page out of Norway’s book shows you can still be a part of Europe and not have to battle to retain a cultural identity or sovereignty.

The EU or the EEC as it was know has expanded into a structure that exceeded the intentions of the original plans. It has failed, but is too proud to admit it. Instead power hungry minor politicians bask in temporary unelected power while citizens of numerous countries suffer. The Euro has destroyed the economy of many countries, proving a single currency and interest rate doesn’t work in multiple cultures and countries. The pro-Europeans are concerned once a country exits, others will consider it. The fact is many countries have considered it and eyes are all on the UK and Greece. Both have poised the question; the UK will have to wait for a referendum after negotiations of reforms are completed and Greece needs to have control of its country and find a solution to pay off its debt.

Quite simply the EU have over stepped their mark and some states want out. The sensible thing is to let them go, but stay on good terms, just as you would with a friendship that wasn’t serving you well. There’s no point forcing someone to stay when they don’t want to, because it will lead to bad feelings and negotiations that will lead nowhere. In the meantime a generation of Greeks suffer and what hope has the next generation have? The Danes have spoken, the anti-immigration Danish People’s Party (DPP) has become Denmark’s second largest political party (after the right wing) and in the UK, UK Independence Party (UKIP) is now the third major political party. The people have spoken and voted; they don’t like how the EU has evolved and want to leave. If democracy really exists then it should be respected.

© 2015. S.T. Alvyn. All Rights Reserved.

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