Two articles caught my attention today (it's raining in HK :'( ): one by Martin Wolf in The
Financial Times and the other by Niall Ferguson in
Newsweek. Both aim to explain what's happening in Europe but both, it
seems to me are more prescriptive than explanatory and both
appear to prescribe the same harsh remedy:
union.
It
seems to me that the EU has been, broadly, a runaway success story. The
European civil wars that dominated 20th century history are over: Germany failed to unite Europe by force but, now, as Ferguson said, Germany risks losing all it has gained - and make no mistake Germany is the big winner in the EU - by being timid and
isolationist. It is time to
save the
euro (€) the EU itself by going the next step: a confederation. Some countries, notably the UK but, likely, also Denmark and Norway and Switzerland (which are not even in the EU) will not wish to join the new
union but they will wish to revise the European Free Trade Area and secure a full free trade deal with the
union.
But isn't the EU already a
union? Yes, but not a full one; that's why it can even consider kicking Greece out of the
Eurozone and that's why it
cannot have sane, sensible economic policies. What else must they do? First they need to make themselves look a lot more like Canada: a very loose, highly decentralized federation but one in which a single,
sovereign government sets economic (fiscal and monetary) policy, trade and foreign policy and even defence policy.
I would suggest that the new
Union of European States (or whatever one wants to call it) should be even looser than Canada. The member states should have
full control over their social policies and programmes - but they
must be able to fund them through their own state taxes and through a system of
transfer payments copied, in aim but but not in too much detail, from Canada. They must pay taxes to the new, federal
superstate for areas of federal responsibility, which includes M. Hollande's call for
growth because, right now, the EU/Eurozone cannot "do" growth - austerity is the only course open - because it has no resources of its own. Nations should retain their "own" armed forces but some fixed amount (say 75% of manning levels) must be assigned to be "under command" of the
superstate's MOD. (It must be recognized that states have legitimate
internal security requirements that requires state level "national guards," but hundreds of thousands of European men and women must be enlisted in
national ships and units (flying squadrons and wings, regiments, brigades, divisions and even corps) which will serve under a
combined command.) (NATO will have to die.) The
superstate will be big, strong and rich and able to pursue a
strategy comparable to, say, America's or China's.
Oh, and since the new
superstate will set foreign and defence policy I am about 99.99% certain that the French nuclear forces are gone.
Thus, I
see a three level structure for Europe:
1. European Free Trade Group: the new European
superstate plus Britain, Denmark, Iceland, Ireland, Norway and Switzerland;
2. Independent states, which includes the new European
superstate and all other states in Europe including the ones mentioned above plus Russia, Ukraine, Turkey, etc; and
3. "Member states" of the European
superstate which still have "national" identities, are likely UN members, maybe even have "national" passports, but are no longer
independent in economic, foreign or defence policies.
I'm pretty sure the Germans don't want it and French will hate it, but ...