Euro 'will be dead in five years' … The euro will have broken up before the end of this Parliamentary term, according to the bulk of economists taking part in a wide-ranging economic survey for The Sunday Telegraph. The single currency is in its death throes and may not survive in its current membership for a week, let alone the next five years, according to a selection of responses to the survey – the first major wide-ranging litmus test of economic opinion in the City since the election. The findings underline suspicions that the new Chancellor, George Osborne, will have to firefight a full-blown crisis in Britain's biggest trading partner in his first years in office. Of the 25 leading City economists who took part in the Telegraph survey, 12 predicted that the euro would not survive in its current form this Parliamentary term, compared with eight who suspected it would. Five declared themselves undecided. – UK Telegraph
Dominant Social Theme: Ah, the horror! … But we must be realists …
Free-Market Analysis: We were surprised by this article in the Telegraph because we have come to believe that the power elite that is responsible for the Western world's dominant social themes tries to "keep a lid on" contrarian perspectives as long as possible. From our humble point of view, the presence of this article in the mainstream media begins to signal the potential demise of the euro, if not the current format of the EU.
The stresses and strains of the current EU formulation are perhaps becoming overwhelming. But what is not stated in this article is that those running the EU – and those who are in fact the "power behind the throne" – expected a more perfect union to grow out of the inevitable chaos that the euro would cause. It begins to look like a bit like a miscalculation. Nonetheless, we are not committing the Bell to the point of view that a break-up is inevitable, or even that those running the EU will not manage to invoke a more powerful union (though we doubt it). What we do believe is that the smug supposition of Western powers-that-be has likely been rattled by the Internet's truth-telling combined with the anger generated by the latest economic downturn.
Yes, what was certainly serene confidence in the 20th century over the implementation of dominant social themes has apparently turned to doubt, even grave concern. We read of tensions at the recent Bilderberg group conference and also that at least some of the invited did not show up for fear of being identified as part of this secretive, powerful and unelected element. This would seem a manifestation of a level of discomfort that did not appear in the past. Here's some more from the article:
A year ago or less, few within the City would have confidently predicted the currency's demise. But the travails of Greece, Spain and Portugal in recent weeks, plus German Chancellor Angela Merkel's acknowledgement that the currency is facing an "existential crisis", have radically shifted opinion. Two of the eight experts who predicted that the currency would survive said it would do so only at the cost of seeing at least one of its members default on its sovereign debt.
Andrew Lilico, chief economist at think tank Policy Exchange, said there was "nearly zero chance" of the euro surviving with its current membership, adding: "Greece will certainly default on its debts, and it is an open question whether Greece will experience some form of revolution or coup – I'd put the likelihood of that over the next five years as around one in four."
Douglas McWilliams of the Centre for Economics and Business Research said the single currency "may not even survive the next week", while David Blanchflower, professor at Dartmouth College and former Bank of England policymaker, added: "The political implications [of euro disintegration] are likely to be far-reaching – Germans are opposed to paying for others and may well quit." Four of the economists said that despite the wider suspicion that Greece or some of the weaker economies may be forced out of the currency, the most likely country to leave would be Germany.
Here at the Bell, we have been writing of the EU's potential demise for close to a decade, in one forum or another. We have tended to believe that it would be Europe's fractious tribes themselves that would put paid to this ludicrous attempt to rebuild Charlemagne's empire with Brussels' bureaucrats. It has thus been most instructive to see how the current situation is unfolding.
The proximate trigger for the unraveling of the EU (or at least the euro) is the current economic crisis and the serial "austerity" measures that are being inflicted throughout Southern Europe. Europeans, generally, are a severe people in our opinion. No, they are not – as the EU likes to make out – happy socialists dancing about in commercials and participating in song competitions. The insipidness of Euro-rhetoric masks ten-thousand wars and, oceans of blood and millions of dead. Culture is hard to compromise. In aggregate, the tribes put up with Europe so long as the money was flowing. The money has stopped. The Euro-dancing competitions continue, but perhaps not for long.
People do misunderstand Euro-socialism. There is the idea that Europeans are content to work a few hours a day and then live off the government and go on as many vacations as possible. This has been purveyed as a "social contract" – and Europeans as naively joining in. We would argue it is not a social contract. It is the cynicism of tough tribes. The Americans, perhaps, are the naïve ones, trusting government (in the modern era anyway) to do the right thing. In Europe, there is little trust but much rhetoric. The tribes are old and tough. Old and tough.
And so, a long, hot summer … Again, the mainstream media will no doubt portray protests from a certain perspective: one of socialism versus the reality of austerity. It will likely portray protestors as those who are upset that illegitimate, undeserved benefits are being removed. But this will not be entirely accurate. The protests, in our opinion, will also be about issues mostly unspoken, certainly unreported by the mainstream press within this context. No, the protestors will also be confronting the authoritarian EU through its currents proxies (European nation states) to insist that the source of the larger problems – inflation, regulation and taxation – be held responsible … IE: the banking system, especially, and those who run it.
Moist summer heat rises; memes fall. The global warming theme subsides. The quest to impose Western-style regulatory democracy on the Middle East is not going well. Even central banking has come under increasing fire as its anti-market/price-fixing operations are increasingly revealed. Now the survival of the EU itself is being questioned.
We have mentioned that this particular fear-based promotion – the consolidation of money – is an absolutely critical one for those who wish ever-more unified global governance. The EU and its backers have fought frantically to turn the tide as regards this failing monetary meme. Yet, if they succeed, they will in our opinion enjoy a victory of ashes, as many in Europe have realized or are starting to realize exactly what the EU and its euro DO provide – versus the promises made. A few bubble years, in fact, and then decades of increasing "austerity." This is no promise at all. And the realization is only one that will grow as time goes on.
And so to war – the final solution. In war, the elite finds the chaos necessary to realign sociopolitical systems, extend governance and promote the further health of the state. And yet … maybe not this time. We would note the "war on terror" has not perhaps had its desired effect. The skepticism on the Internet especially remains and has grown, if possible. It is true that World War II snuffed out the West's then-nascent cynicism (see Remnant) as regards the elite's stated platform of an increasingly integrated world. But there is the problem of nuclear devices now – and a world war is hard to mobilize within a super-weaponized context. Lacking a long-term military plan and given the increased level of consciousness achieved via Internet information, the elite will have to work harder.
We have seen, despite all the admiring and fearful prose, that the playbook of the 20th century does not seem to work especially well in the 21st. The problems currently plaguing the EU are certainly evidence of this. It will be interesting indeed to see how the elite responds and if it can salvage this most important dominant social theme.
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