STAFF NEWS & ANALYSIS
EU Spins Out of Control
By Staff News & Analysis - May 31, 2010

Euro under new pressure after Spain's debt rating is downgraded … Markets set to fall after ratings agency Fitch strips Spain of AAA score … French debt rating also threatened, says budget minister Francois Baroin … Spain's Jose Luis Rodriguez Zapatero (left) struggled to gain support for austerity measures. His government may also face a general strike. … The euro is expected to come under further pressure tomorrow as Spain's minority government teeters on the brink of collapse and traders fear contagion throughout the eurozone after a senior French minister admitted that his country's top-notch credit rating was under threat. Stock and debt markets are likely to take a battering after the decision on Friday by the ratings agency Fitch to strip Spain of its coveted AAA credit score, the second downgrade in a month. Fitch's decision was announced after the markets in closed, so traders will have their first chance tomorrow to react, although London and New York will be sidelined by bank holidays. – UK Guardian

Dominant Social Theme: Things are tough and demand austerity.

Free-Market Analysis: What a mess. As can be seen by the article excerpt above, the European Union threatens to come apart at the seams. The debt "contagion" is obviously not stopping, nor can it, given the monstrous overhang that is now being presented to world markets. Spain has been downgraded and other countries teeter on the precipice. We predicted recently that France was in bad shape, and events seem to be moving even faster than we expected – with French officials admitting that French credit ratings could also soon drop.

While we have written that the EU crisis when combined with the truth-telling of the Internet is giving the power elite all they can handle and more, there is nothing now to do but move forward. Iacta alea est … The die has been cast; the promotion will continue. Thus, we predict, the elite's dominant social themes are going to be in full cry over the next months when it comes to the European Union. As the EU spins out of control, there will be more and calls for political unity of EU nations and also for some sort of international financial system.

This all fits into the Bell's larger take on how the world works. While the elite is obviously in pursuit of ever-closer global coordination, we believe the communications revolution of the 21st century may have spoiled their plans, or set them back, anyway. It is not possible to pretend anymore, in our opinion, that each one of these modern sociopolitical and economic crises were not in some sense anticipated. Here's an excerpt from a scathing article in the UK Telegraph that appeared over the weekend:

Herman and his Frankenstein euro have done enough damage … Herman Van Rompuy, a profoundly uninspiring man who, somehow, is European Council President. Van Rompuy's position makes him, on paper, the most senior policy-maker in the European Union – with its 27 member states and 500 million people. No one elected him to high office and few voters know what he thinks. Until his elevation was stitched up in the well-upholstered Eurocrat backrooms of Brussels, his EU-wide profile was zero.

Last Tuesday, Van Rompuy deigned to comment on the fiscal, financial and political chaos that is the eurozone – a chaos now in danger of plunging the entire Western world into a second bout of systemic instability, similar to what followed the collapse of Lehman Brothers in September 2008. "We are clearly confronted with a tension within the system," Van Rompuy opined. "The dilemma of being a monetary union and not a fully-fledged economic and political union. The tension has been there since the single currency was created. However, the general public was not really made aware of it."

We can see the fear-based promotion a-building here. Rompuy speaks bluntly of the "dilemma of being a monetary union and not a fully-fledged economic and political union." The point of the writer of this piece, Liam Halligan, is that it was well known that the EU in its current form could not survive an economic downdraft, let alone what has actually occurred. Rompuy is not just stating a fact, he is being actively disingenuous, Halligan tells us.

Adds Halligan, "Despite what Van Rompuy says, some of us – economists, politicians and commentators – have been shouting about the dangers of the eurozone for many years. When we did, the trough-nuzzling, self-appointed EU elite, which Van Rompuy represents down to the tip of his Mont Blanc pen, dismissed our concerns as 'alarmist and 'anti-European'. Meanwhile, the Brussels publicity machine spent vast amounts of taxpayers' money on propaganda telling the Western European public that the eurozone was not only safe, but if their countries didn't join then 'jobs and growth' would suffer."

Halligan is also puzzled about why the EU wishes to impose an international bank tax – ("the EU-elite think they can instead placate the public, and win popularity, by throwing voters a bone in the form of a bank tax") – but we are not sure about that. Part of what the power elite is after is an ever-closer cross-border, global coordination. This can be seen not only in the elite's determination to create cross-border regulatory improvements whenever possible, but it can also be seen in other activities that have been undertaken recently. Here's an example. Fox reported on May 21, the following:

U.N. Internet Tax Dead – For Now … A controversial United Nations plan to impose consumer taxes on such things as Internet activity and paying bills online in order to drastically restructure the world drug industry hit a wall of disagreement on Friday, and is likely dead — for now. Delegates to the World Health Organization's annual World Health Assembly could not reach agreement on the plan — first reported by Fox News — to marry "innovative financing" for global public health with a radically reorganized research, development, production and distribution of medicines around the world, putting greater emphasis on drugs for communicable diseases in poor countries.

Over and over the powers-that-be are pushing for taxing authority to be developed by any means possible. This emphasis does not seem odd if one considers the mechanisms that the power-elite has put in place and is now trying to activate. There is the IMF – the monetary arm of global governance and the UN – a government in waiting. What else is necessary is a global tax structure. (Taxes being necessary to pay the interest on the kind of fiat money that the elite has in mind issuing, ultimately.) Last week, in an article entitled Euro Crisis to Set One World Currency, we wrote the following:

A hypothetical path to a world currency (with some speed) would involve certain very specific elements. It would include, obviously, a very serious sovereign wealth crisis spreading from country to country thoughout at least the Southern half of Europe. This crisis, hypothetically, would be averted by heroic Brussels bureaucrats but not before a significant amount of financial pain was inflicted – good and hard as H. L. Mencken might say. It might even involve the dissolution of the euro and the shrinking of the EU itself. But the pay-off for the power elite would be the ability to float a scenario that proposes a worldwide currency to avert additional difficulties going forward.

To read full DB article, click here: Euro Crisis to Set One World Currency.

There is no doubt that the EU has been set up as a stepping-stone to further consolidated governance, just as there is no doubt that Van Rompuy and other leaders of the EU anticipated the current implosion. The chess board is being reshuffled. But will this crisis cause the shift that the elite obviously hopes for? This is what people trying to follow the fate of elite promotions must decide. We have not provided the articles, but we also noted over this weekend a spate of articles on the rising discontent in Europe. Spain's large unions have scheduled a strike for early June. In France, there has been a dramatic resurgence of the Communist party and Greece remains powerfully unsettled.

Still to come, in our estimations are stronger reactions from Ireland, Portugal and Italy. These countries and their various regions constitute the "tribes of Europe" that we have long discussed and they are growing most unhappy. We will watch carefully to see whether the elite has overreached. The elite does not have a monopoly over communication anymore thanks to the Internet and it is our suspicion that once a serious opposition gets underway, it will not simply mimic the left-right lines of the past. Even in France, the Communists reportedly speak of "libertarian elements" within their platform.

Europe seems to us, to be headed toward austerity that will seem much like a Depression, or more and more as time goes on. The Southern PIGS will suffer from imposed spending discipline while the Northern countries will suffer from having to pay for it. In our opinion, this is likely an untenable situation, one exacerbated by the Internet and, plainly, by the elite's lack of ability to internalize (though they now seem to understand intellectually) just how angry – and increasingly informed – people are.

After Thoughts

Unfocused anger is one thing. But the 'Net effectively channels frustration and organizes anger. This is a "wild card" that will make both observing the EU – and investing in it – more difficult than in the past. There are no guarantees when it comes to the survival and implementation of elite memes, even the ones like the EU that are most important to them. Nor is a variant of global governance a sure thing anymore. If the EU breaks up, the larger plan for global governance will be seen to be foundering, much as the global warming meme has foundered. Look at how desperately EU leaders fought to save the EU project. It is most important to them.

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