The future of the European Union ... The choice: A limited version of federalism is a less miserable solution than the break-up of the euro In recent months we have concluded that, whether or not Greece stays in the euro, a rescue demands more. If it is to banish the spectre of a full break-up, the euro zone must draw on its joint resources by collectively standing behind its big banks and by issuing Eurobonds to share the burden of its debt. We set out the scheme's nuts and bolts below. It is unashamedly technocratic and limited, designed not to create the full superstate that critics (and we) fear. But it is plainly a move towards federalism—something that troubles many Europeans. It is a gamble, but time is running short. Rumours of bank runs around Europe's periphery have put savers and investors on alert (see article). The euro zone needs a plan. – The Economist
Dominant Social Theme: A little bit of federalism is preferable to none.
Free-Market Analysis: Europe is discovering federalism. As we've long argued on these pages now, the "crisis" of Europe stands revealed increasingly as a phony one, a ginned-up ongoing emergency that is designed to provoke maximum centralization.
The crisis began as one that saw Southern PIGS unable to pay their bank debts – unnecessary debts that had likely been deliberately pressed on the political class to generate the current crisis. The solution has been first the illegal expansion of the European Central Bank's brief and now, as the Economist spells out, the putative implementation of Eurobonds.
If one grants the existence of a power elite, a group controlling central banks and gradually moving the world toward global governance all of this makes sense. The world is being centralized at a regular clip, though such an international policy has never been approved by the world's "democracies."
The use of Eurobonds is especially clever – if one grants the goal of the creation of a Eurozone super state. The ability to issue bonds is the first step toward monetizing the state. The next step will be taxes. It is an inexorable procession. Here's more from the article:
What will become of the European Union? One road leads to the full break-up of the euro, with all its economic and political repercussions. The other involves an unprecedented transfer of wealth across Europe's borders and, in return, a corresponding surrender of sovereignty. Separate or superstate: those seem to be the alternatives now.
That is why we have reluctantly concluded that the nations in the euro zone must share their burdens. The logic is straightforward. The euro zone's problem is not the debt's size, but its fragmented structure. Taken as a whole, the stock of euro-zone public debt is 87% of GDP, compared with over 100% in America. Similarly, the banks are not too big for the continent as a whole, just for individual governments. To survive, Europe has to become more federal ...
One can see the mechanism grinding along inexorably. Bit by bit, Europe is to become "federalized." First the ECB grabbed the power to monetize debt – to buy up the worthless bonds of Greece and other PIGS. Now the Economist is urging full-scale federalization of the "sovereign debt" problem via Eurobonds.
The EU is a dictatorship waiting to happen. The alternatives are not a democratic state versus separation but a quasi-totalitarian state versus something else.
Whether it is a torrent of economy-killing legislation pouring from Brussels or efforts to harmonize invasive wiretapping facilities with the United States, the EU is on the forefront of a kind of quasi-fascism that has not sprouted full-blown only because the powers of the EU are yet feeble. The harbingers are evident.
• Statist appendages: The EU has many of the trappings of a state including Eurocorps, its own army, now fighting in both Somalia and Afghanistan.
• Lack of democratic accountability: The EU remains entirely undemocratic with decision-making lodged in a small council that is not accountable to representatives from member states.
• Lack of auditing due to corruption: The EU's internal, financial workings have not been audited for nearly a decade because of obvious irregularities. No responsible accounting firm will sign off on the obvious corruption and cronyism that is rife within Brussels.
• Nonsensical regulation: Just last week EU gave China and India a month to comply with new airline carbon emissions fee or face penalties for European flights. The EU wants the airlines to provide "emissions data" even though there is no consensus that global warming exists much less that man-made carbon is responsible for it.
That doesn't matter to the Eurocrats, however. What matters is expansion of the state. The Economist newspaper wants to see further expansion as well.
Conclusion: "Limited federalism," the Economist proclaims. This is merely a euphemism for "cook the frog slowly."