EU Political Response May Increase Chance of Violence
By Staff News & Analysis - June 02, 2014

Despite election results, reason still rules Europe … When can a vote of 25 percent be described as a "stunning victory" or even a "political earthquake"? According to the European establishment, it's when these votes go to a rabble of odd-ball extremists, ranging from overt racists and even disciples of Adolf Hitler to unreconstructed Stalinists and comically naïve anarchists. – Reuters

Dominant Social Theme: The recent EU vote is no biggie. Steady as she goes. Additional European consolidation is necessary.

Free-Market Analysis: This Reuters editorial shows us clearly how pro-EU forces are reacting to recent elections (Reuters being one such). These elections made it clear that large parts of the European electorate are fed-up with the euro and the EU as well after some six years of eroding prosperity and rising unemployment. But that's obviously not how the Euro-elite sees it.

The idea then as now was that an increasingly troubled Europe would turn to "more Europe" to resolve the problems caused by the "Europe" that already existed.

And that is just in fact what this editorial calls for. Here's more:

The most alarming symptom of political breakdown revealed by the European parliament election is mainstream politician's hysterical reaction to a perfectly predictable — and justifiable — upsurge of populist anger after the euro crisis.

After all, people have suffered five years of unnecessary hardship as a result of misguided economic policies. Why then should anyone be surprised that tens of millions of voters decided "to give their governments a kicking" as British Prime Minister David Cameron put it? Especially when the European elections provided an ideal opportunity for people to vent their anger with national governments, with no risk of letting the populists get anywhere near true power.

While the media were banging on about the shock and devastation of Sunday's supposed political earthquake, this benign, and perfectly plausible, interpretation was quietly adopted by financial markets and the European business community.

… Europe's economic governance will have to be reconsidered if the euro is to survive. Though the acute phase of the euro crisis may be over, the single currency has been revealed as a fundamentally unstable system. For the euro to be viable in the long-run, national debt burdens will have to be shared or mutually-guaranteed; banks will have to be jointly backed by all euro-zone nations, and the ECB will have to become a lender of last resort in sovereign bond markets, like the Federal Reserve and the Bank of England.

Unfortunately, all of these reforms have been ruled out by the German government and the German courts have ruled them incompatible with the German constitution and the Maastricht Treaty. But if Europe desperately needs reforms that are incompatible with the German constitution and the EU treaties, then the rational response is surely to revise the German constitution and the EU treaties. Not to impose a ban on any discussion of reforms.

True believers in the "European project" now talk about responding to the upsurge of populist anger by revising the EU treaties and national constitutions to reflect the lessons of the euro crisis. But transforming national politicians into genuinely European leaders will require a bigger earthquake than this week's election.

Even a brief reading of this editorial suggests a solution of "order out of chaos." It doesn't recommend that the euro or the EU itself be done away with. Instead, it suggests spreading individual nation-state debts over numerous countries and doing the same thing for bank debt.

The ECB itself will have to be given a lot more power so that it may function like the US Fed, printing as much money as necessary to ensure maximum liquidity that will trigger additional employment and finally do away with the long-lasting "recession."

Ironically, the US has applied all of these "solutions" and is not in much better shape than the EU. Unemployment, bank debt and federal debt are all weighing the economy down despite fedgov power. One needs to assume from US performance that the suggested remedies may not do the job.

Nor are they meant to. It's all a kind of directed history, in our view. The solution to European problems is always more Europe – and in the case of this article, the takeaway is that the current "crisis" and EU voter response is not significant enough to truly galvanize "European" leaders.

The result the article wants to see is more leaders "committed" to the vision of a single Europe. Perversely, voter anger regarding current levels of European integration is seen as not yet deep enough to provoke the necessary globalism among national politicians.

It is always about Europe. If voters reject Europe, that's an opportunity to suggest a deepening of EU powers in order to address European dilemmas. If politicians become aware of the pervasive anger and malaise, this ought to be seen as an opportunity for them to grow in stature as pan-European statesmen.

These sorts of reactions could have been predicted, of course, and indeed, we have predicted them. But they are astonishing to read about and watch, nonetheless. The general consensus of the mainstream media – especially the British press – is that the voters' recent expression of repugnance is going to support a middle-way for Britain.

The idea here is that David Cameron's quest to ensure that Britain remains bound to the EU has actually been empowered by the anti-Europe vote. He will be able to insist that the EU halt its most vigorous integrationist approaches because otherwise an "anti" vote in Britain is all-but-assured.

Again, we can see that an anti-EU vote is perversely being used to generate outcomes that make the EU more likely to survive, not less. No matter what voters say about the EU, the leaders of Britain and Europe attempt to use the sentiment to support the EU – at least in some form.

Every setback is merely a further opportunity to create a more responsive and ultimately more amalgamated EU. The disconnect between political systems in both the US and the EU and the voters is growing deeper. This EU vote and the political responses to it do nothing to reverse this trend.

After Thoughts

If the political system is incapable of representing the "will" of the people – even at the most cosmetic level – then the chances for less civil and more violent change increases. Is that the "real" desired outcome?

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