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Imminent power centralization within the EU
Well it couldn't have happened to a nicer bureaucratic monster. As reported by Diario de Noticias; Brussels top aparatchiks aim at monetary centralization of all EU countries. Sovereignty and independence of each and every European nation is now firmly in the past. One does not need to look past the Sunday night 1 trillion dollar bailout to see why that is so. A model which was based on Federal Union of American States is now becoming a neo-USSR centrist model in which individual countries will have no saying in setting their monetary and fiscal requirements and policies. Furthermore; while both Angela Merkl and Nicolas Sarkozy downplay the significance of such a political [yes it is nothing but that] move, we here on ZeroHedge know better than to take their words at face value. Obviously nothing was solved by monetary infusion and the only thing keeping the EUR from not crashing towards parity with the USD are the markets, which suffer from a severe case of ADHD, which makes them look, for a prolonged period of time, at shiny stock gains and 0.2% GDP growths, and of course Uncle Ben's instant swap facilitiesTM. Some countries which have a leveraged position inside Krem... uhh Brussels will surely welcome such positioning and centralization of power, while the European periphery will suffer as it did many times in the past. Our take is that Brussels will demand currency pegs with other EU countries [as well with those who are in the process of entering the Union but have not yet finished their negotiations] in order to impose control even further. The main beneficiaries of such a move could be Great Britain, Germany and France; countries which could exploit their dominant position within the European parliament to further their goals disregarding the needs of other Union members, a behavior which would not only admit the multi-tier nature of the EU and different treatments for different countries, but also make ground for radical political ideas to enter mainstream politics and further poison a very much poisoned political environment. I am 100% sure nothing beneficial will come out of this in the longterm, but will surely make EU bureaucrats tap their backs in a congratulatory manner for the brilliant job they have done.
The eurozone countries will lose sovereignty over the preparation of their budgets, if approved a European Commission proposal which aims to strengthen economic cooperation in the EU. Brussels wants to create a mechanism for warning of macroeconomic imbalances and to align the budgetary policies of member states with the political objectives of the Union
The Commission's proposal is only the first step (be prepared for another long run) to combat the crisis of the euro.If the European Council in June, to support this plan, will be institutionalized mechanism to stabilize the financial approved a week ago and the budgets for 2012 are already built (over 2011) in accordance with these rules. Brussels will have more powers in the supervision of macro-economic objectives.
The idea is to anticipate the presentation of the Stability and Growth Programme, under what the report calls "half European." Each PEC is analyzed more rigorously than hitherto. Only when approved or modified this program is that the country draws up the budget. Eurostat will also gain powers to audit the accounts of each country.
The excessive deficit procedures will be faster than the current document and prompts the need to prepare secondary legislation. And here comes one of the crucial points of the proposal will not only alert to the budget deficit, but also for the public debt.
For example, if a country has more than 60% of GDP in debt, will not suffice to meet the 3% deficit, but this "has to be consistent with the continued and substantial decline in public debt."Basically, the increased coordination takes into account more indicators and the debt is emphasized, as was the case at the beginning of the Stability and Growth Pact governing the euro zone.
Nonetheless, the Commission only has powers to notice and recommendation. In the case of risk analysis for a poor country or denial of a stability program, sanctions shall be paid by the European Council, under rules not very clear in the document. "In case of obvious mismatches in budget plans for next year, will recommend a review of the plans," reads the proposal. "The Eurogroup will have a crucial role in the new system of enhanced coordination and, where appropriate, may seek a formal decision in accordance with the Treaty of Lisbon."These powers are not very evident, and may be limited community funds or bonds, but the Council shall take decisions by qualified majority and has the means to compel a small country to amend its budget in this case be denied the services of committee.
In practice, the plan is tantamount to creating an embryonic European economic government, an idea that some countries have advocated since the single currency, but that never materialized due to opposition from a group of states led by Germany. The crisis of the euro has eliminated this opposition.
http://dn.sapo.pt/inicio/economia/interior.aspx?content_id=1568536
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Hasn't the concept been around since Woodrow Wilson was president? I mean the creation of the League of Nations was the primary formation of the one-world government. Considering that 20 percent of the world's population still live in conditions that equal that of England in the 1400's, it is no wonder we are running to toward the land mines.
"Europe has been forced into a union of states. Not as Napoleon dreamed it would be,under the French flag, and not as Hitler planned to subjugate it under the Swastika. But, by a stroke of irony, as both Napoleon and Hitler sought to unify Europe under the Eagle standard, so does the Eagle emblem represent the United States, and high powered Americans have worked in secret and in public to dismantle independent sovereigns to create today's European Union.
Ambrose Evans-Pritchard tracks this American push to European unification in and article in The Telegraph of London from September of 2000. 'The U.S. Intelligence community ran a campaign in the Fifties and Sixties to build momentum fro a united Europe. It funded and directed the European federalist movement'
During the period mentioned, the CIA was directed by influential members of the Council on Foreign Relations: Allen Dulles, General Walter Bedell Smith, and William Donovan, the former head of the OSS, precursor to the CIA. Donovan led the American Committee for a United Europe, which ran and supported the European Federalist Movement...
The dots leading to the unification of the European nations travels from the Marshall Plan, to the European Coal and Steel Community, to the European Economic Community, and its not far-reaching to say that America's Council on Foreign Relations paved the path for the present European government. CFR members have been involved in every step of the journey." Daniel Estulin "The True Story of the Bilderberg Group"
Not that I have stayed up on the subject, but isn't the CFR an outgrowth of the Royal Institute on International Affairs, headed by British Col. Milner and Lady Astor? Itself a creation of one worlder South African/British Lord Cecil Rhodes? It seems CFR has an awfully British lineage to be just an American tool. With the way American foreign policy has been run since that day in Dallas, I would ask who is a tool of whom?
Its all about global government - a global financial system and global currency -its all right here:
World Government and US Sovereignty
http://www.meetup.com/RLCNF-org/pages/World_Government_and_US_Sovereignty/
Wait a minute. Last time I check, all the EU nations are democracies. All the "leaders" are voted in. Whatever they are doing is what they want. They are free to do it. No?
The EU is not a real democracy. Just look at what happened with the "European Constitution", few countries allowed their citizens to vote on it and the plan received a big NO in the French and Dutch referendums. Instead of listening to the people, the legislation was renamed and last year they shoved the Treaty of Lisbon down our throats.
EU is now trying to coordinate the budgets because obviously the current system did not work. More than a few countries did not follow the rules at all, the three percent deficit limit and so on. They are not taking over, they are trying to set up some kind of control for punishing misbehaving countries.
Like Greek leaders which did not give a shit about fiscal responsibility and spent like drunken sailors. If you run into troubles, EU/IMF will take over. That is key message. But of course Yanks and Brits continuosly yap about "Heil Hitler" #2 coming any minute now like a fucking parrots.
"They are not taking over, they are trying to set up some kind of control for punishing misbehaving countries."
Here's a history lesson for tim73:
History is filled with this kind of behavior: A crisis becomes an excuse for those in charge to acquire more power. I suppose if tim73 had been around in 1931 he would have said, "The Japanese are not taking over, they are trying to set up some kind of control for punishing misbehaving Chinese."
Oh, I get it. It is ALL BAAAD if Europeans somehow unite but it was ALL GOOD when Americans created the USA!
Actually, no. Americans are learning that they creation of the federal system gave birth to a Leviathan that they cannot now control. I wouldn't call it "good".
"Good" and "bad" are defined by the winning side.
The killer here is the even the biggest winners are losers.
Only when we all die.
EU budgetary proposals draw immediate rebuke
http://euobserver.com/9/30071
They are calling this "peer review". I'd call it something else.
CB,
Great piece that gets right to the heart of the issue. The political class, historically at the behest of the banking class, has always been about creating insulating layers of seperation between themselves and the people they pillage. Of course the creation of Euro / Euroland was about creating a new taxing authority / monetary authority, but it was sold to the people on their fear of more European wars. Of course they're creating a new bureacracy with taxing and monetary authority. Of course the U.S. federal system has morphed into a national legislature.
I've said this before, but I will continue to say it: Most of the interactions that most of us will have during our lives with other on this planet are economic. The ability to control the value and availability of money is the ability to control life itself. When this ability is in the hands of bureacrats who are sufficiently insulated from the common man, plunder and injustice are virtually guaranteed.
We all can come here to ZH to gather and share useful information, but ultimately we must defend ourselves in the legislatures as a means to avoid defending ourselves on the streets. We all know it's true. Lots of commenters come here and tell us it's pointless, we're doomed, there's nothing you can do, TPTB are too powerful, blah blah blah. Fear is their most potent weapon. We can't even control the U.S. federal legislature because it is too big and too corrupt. How in hell would we ever influence a world government? Of course, we could not, and that is exactly why they are trying to establish one and why we must prevent it.
We must prevent it.
No; money is an abstraction, a fiction.
Take the FRN away, something else will spring up as an emergent phenomenon.
What *is* indispensible is energy. Money only has the power that we give to it.
Well, I hate to be that glass half-full but the problem of sustainability will lead to the death of millions. So we vote in some new jerks. Then what? NOW we can pay for unfunded liabilities and 40,000,000 on welfare? We'll just get everyone to agree and play nice.
"Everyone please just put down your guns and get along! You too, drug cartels. Stop it now. Just forget our differences and lets work this out. This is America!" (now wave your flag)
In reference to Cheeky's poisoned political environment there is no antidote for the USA.
If just about ANYTHING happens our JIT distribution system will crumble. Mako talks about tanks. I talk about empty supermarkets.
Where will the money come from? How will people get to their jobs with $10 petro? How can we possibly ensure 2,000 calories a day for ~300 (+12) million inhabitants of the US of A? How? I really do appreciate your posts, SW, and maybe you're right: the fear has gotten to me. But the math...there can be no solution other than total collapse and reset. Starvation is a regular dish served up in many parts of the world and especially last century. Can't happen here? We can stop the 15' rolling boulder coming down the tube after Indiana Jones? Is there such thing as a point of no return when altruism becomes fatal? Please, go cast your ballots. Vote for whomever promises to save us all from calorie deficits.
http://www.energybulletin.net/node/23259
WW,
I really do appreciate the predicament. Collapse is not off the table, but if one happens we must be ready to meet it rationally and not via our silence assent to a new dictatorship. I think as long as people believe they have a future they will be willing to work for it. Is "sacrifice" in our future? You bet it is. My simplistic view is that things have been too easy for about the last 25 years, and now they're going to be harder than they would otherwise have been for awhile. Energy is a technical problem that can be and will be solved. There's nothing I'd like to see more than for crude to be relegated to "petrochemical raw material" status. I want to ensure that the "sacrifice" is truly shared, and also to ensure that when things improve the old pillage system isn't merely reimplemented in a political takeover by blaming the hard times on the very ones who fought through the difficult measures to reinstate financial and fiscal sanity.
We must, must convince a critical mass (though a minority) that they can do this and we must be ready with a mechanism in place. The alternative is much uglier, too ugly to contemplate other than as motivation for avoidance. AFAIAC there's not really any choice. This is the burden of citizenship.
Edit: I'm not just about casting ballots; I'm about giving people the opportunity to vote for regaining control of their own lives, and voting for making government their servant again.
people are the most unruly when they have dashed expectations...seems in West we expect to do as well as our parent (will not) and in China/India/Latin America, things were really looking up...now it seems we will all be disappointed for a good long while, our kids will be able to take it better than us, because we expected more...
I appreciate the thoughful reply.
I can see the advantage of making the human connections now that will keep survivors strong for whatever happens - especially against an open dictatorship.
Well put. Thank you.
Question: Do you think a Constitutional Convention is possible? That is, to dissolve bonds between states (and effectively the Federal gov't) and restrike and new path? I hope I am clear - I view consent (by voting) to be governed by DC as more apathetic than patriotic now. Current mentality: "What can we do? I just vote for the lesser of the two evils and hope it works out okay."
Best conversation of the morning
SW
Thank you for your effort and commitment in trying to return sanity to the Union of our States.
Trouble follows an imbalance between the Macro & Micro worlds of governing.
Here Here. I believe we can make a difference.
This will lead to riots and war. I can't see the EU coordinating a one car funeral much less something of this complexity and magnitude.
Welcome to the dark ages, 21st century addition
More power to the money power... yeaaaa!
This looks like a model for the US Fed/Treasury to audit/approve state finances here in the US, a model that must be adhered to for international finance. A slippery slope into the death of what's left of state's rights and eventually US sovereignty.
Considering Obama's involvement in the process over the weekend, I wouldn't be surprised.
What's different in the US is that individual states are typically bound by their state constitutions to *not* have an annual deficit. That's not true in the EMU -- those individual states actually print their currency (the Euro), and they're all cheating.
The US states won't be audited like that, because it's not necessary. However, a state could go into Federal receivorship, like did Washington D.C. (not a state, but close enough). Now THAT would be interesting, when a state becomes a mere administrative extension of the federal government (it's constitutionally ambiguous).
At present, US states are sovereign, even if that's not practiced. But, the federal government can't audit, and states have state militias specifically to defend themselves from the federal army (which are not allowed to operate in any state without explicit permission by the State Governor).
Do you mean the National Guard?
Perpich v. State. The NG is a reserve unit of the United States Army.
Their deployment anywhere will be avoided by the Court as a political question. We have kind of a planetary alignment for despotism in this country now, with a Court that is non-activist in terms of personal rights and "political questions," citizen standing, etc., and one with bullwarks like Scalia who can apparently find NO limit to the "legitimate interests" of the State in terms of its police power.
As much as I hate judicial activism, we really need one branch of government that will stand up to the other two and defend goddamned liberties and the law.
That was my point, when CA or IL default, then "QE shock and awe II" is implemented, but the strings include federal approval of state budgets, suspension of Posse Comitus, etc. Can't let a crisis go to waste. A perfect opportunity to do away with those pesky state's rights.
A constitutional crisis, you bet. A red-state/blue-state civil war?
Ah, gotcha. We agree.
Yep. People won't put up with that in the "fly-over" country.
I'm thinking it will actually result in the dissolving of the federal government, because they can't occupy-and-control that much territory, especially since they won't have any revenue to do it (states won't send money to the feds to give back to the states, which is the current source of fed power).
It will be a return to the non-federalist USA ...
The problem is states do not touch the money sent to the feds. Individuals and corporations send their money direct to the feds.
In AZ, I thought the state should withhold any money due to the feds for failing to protect the national border. But is there any money to withhold?
A fair point: The individual/business mails a check to the US Treasury, and a separate check to the state.
However, when the federal government doesn't send you the Medicare, Social Security, or Pension check that you are "owed", or when it seizes IRAs and 401Ks that you rightfully believe are "yours", then you won't send the federal government those IRS tax checks anymore. The system will collapse. That's how I expect it to play out.
And Palpatine becomes Imperial overlord.....Zero Hedge Jedi's need to launch a fresh attack.
If the financial elites own Europe/its centralized government, is USSR appropriate comparison? Sure both will be tyrannical and both will be bad for general economy but I'm not quite sure Haiti style mass poverty with dictorial elite is same thing as Cuban style tyranny. Elite central bankers owning us, or Stalin?...some choice.
I know many at ZH would not agree with him, but I like Michael Hudson’s take on the European bailouts…just as in U.S. with TARP, bailouts not about saving general economy or the commonwealth because, of course, money could be spent (or not spent) in many other productive ways. Rather bailouts are about enriching banksters/oligarchy, thus making taxpayers into debt slaves to the bankster class .
http://michael-hudson.com/2010/05/euro-bankers-to-greecethe-wealthy-won%...
excerpts:
“…The Greek bailout” should have been called what it is: a TARP for German and other European bankers and global currency speculators. …“
“…What really was bailed out is the principle that economies should be stripped so that finance capital may rule…”
“…[Foreign bondhodlers] will make a killing, as will buyers of hundreds of billions of dollars of credit-default swaps on the Greek government bonds, speculators in euro-swaps and other casino-capitalist gamblers. (Parties on the losing side of these swaps now will need to be bailed out as well, and so on ad infinitum.)”
“This windfall is to be paid by taxpayers – ultimately those of Greece (in effect labor, because the wealthy have been untaxed) – to reimburse Euro-governments, the IMF and even the U.S. Treasury for its commitment to predatory finance….”
“Bank lobbyists know that the financial game is over. They are playing for the short run. The financial sector’s aim is to take as much bailout money as it can and run, with large enough annual bonuses to lord it over the rest of society after the Clean Slate finally arrives. Less public spending on social programs will leave more bailout money to pay the banks for their exponentially rising bad debts that cannot possibly be paid in the end. It is inevitable that loans and bonds will default in the usual convulsion of bankruptcy….”
“…On Sunday, May 9, German voters expressed their anger at the government’s role in bailing out German bankers (euphemized as bailing out “Greece”) at the expense of German taxpayers…. Many German voters may have wondered whether taxing the poor to pay the rich to engage in usury was really as “Christian” as the party claimed to represent.”
“…Iceland, Latvia and now Greece are the opening shots in the resulting global campaign to roll back the great democratic reform program of the 19th century and the Progressive Era: taxation of land and the “unearned increment” of price gains for real estate, stocks and bonds, and subordination of the financial sector to the needs of economic growth under democratic direction…”
“..In truly Orwellian fashion, right-wingers in Europe and the United States (such as Fed Chairman Ben Bernanke) call this the “hallmark of democracy.” It actually is the stamp of oligarchy, stripping away control over the economy’s credit allocation – and hence, forward planning – while giving high finance a stranglehold over public spending programs….”
"Many German voters may have wondered whether taxing the poor to pay the rich to engage in usury was really as “Christian” as the party claimed to represent.”"
Careful there with that antisemitism...
Always surprised when people keeps clinging to the illusion of communism. Communism has one extremely convenient feature: it disappeared.
Just like any option that disappeared, it makes the situation clearer. People depicting situations as being communist driven are only side tracking to avoid a more actual assessment.
Communism is out of the picture. And irrelevant.
In a way, the collapse has already happened; the collapse of a system of beliefs introduced in the 18th. This is the only collapse to be expected.
Pimping up labour (hard work) in a society struggling to increase the inflow of resources is going to be funny.
M&M bailouts are about enriching banksters/oligarchy, thus making taxpayers into debt slaves to the bankster class.
What's there to disagree with?
As a French resident, I can say that none of the 27 members of the EU are ready to give up their sovereign right to decide on their budgets. I also concur with Nick Lenoir's comment yesterday about the likelihood of riots in France if the government tries to pre-empt a crisis by tightening now.
The Commission's proposal is just a desperate attempt to be appearing to do something.
It would be better if the European reaction to the current crisis were to re-affirm the Maastricht criteria as the guiding principles and to open up the possibility for a country to exit the euro if it's getting battered in the markets and if it hasn't respected Maastricht. Bailouts would only be available to those who respected it.
The application of the "respect of Maastricht" principle couldn't come into effect before 2013. At first glance, this seems like too late, but it might possibly sway the markets.
"The application of the "respect of Maastricht" principle couldn't come into effect before 2013. At first glance, this seems like too late, but it might possibly sway the markets."
Markets won't buy "extend & pretend". Countries like Greece lied their way in, they lie to stay and there is no reason to believe they will get religion...
This is sadly the correct take on how things will go. Much as I would love those predicting the demise of the Euro and EU to be right, they are not. They fail to see the Political determination and fear on Nationalism behind `the project`. The aim has always been FULL political as well as monetary union. The stage is now set for a raft of `initiatives` to further undermine the Nation states of Europe and to further centralise economic and political control. There will be nothing democratic about this at all. The European Commission is already unacountable to those it seeks to govern, and the European Parliament is the rubber stamping mechanism it uses to pass its edicts into law. All current pretence at national sovereignty will quietly dissapear. A new era of even bigger, less acountable and more centralised control will be ushered in. Dissenting voices will be accused of petty nationalism and antiquated thinking.
Certainly this will not be good for individual freedoms, private sector job creatioin or economic flexibility. But for those who like red tape, corruption, secret dealings between the unelected power holders and even higher taxes it will be great.
By the time the majority of Europeans realise what has happened it will be too late - this is the way the European Commission has always increased its power - stealthily at times of fear. The United States of Europe - run by the few, for the few has always been the end game. The rise of the political and Beaurocratic class seems unstoppable.
Fear on nationalism? What nationalism do you speak about?
The EU project is about nation building, about aggregating different people/nations into a new one. A big nationalistic project.
EU leaders do not fear war, war between European nations. They fear the very fact that a war between European nations would only be a regional war.
European nations have reached the point when violence must be considered carefully as the outcome might be a decrease in general standing and no longer an increase.
Up to WW2, European wars were about determining who would lead the world.
Nowadays, similar wars might mean that a european nation will move up relatively to its enemy but might also fall down in the general ranking of nations as other nations in the world seized the opportunity of moving up.
I think Europeans learned their WW2 and the loss of global power lesson the hard way.
Didn't this just what French have on their
minds all along?
speaking of power centralization
Jim Ricards World Currency / the SDR
(audio MP3 format)
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/13_J...
via Jesse (who has different perspective)
http://jessescrossroadscafe.blogspot.com/2010/05/jim-rickards-on-may-12-...
I think we'll see the Deutchemark before we see full centralization. The Germans are already being exceedingly patient.
Exercise for the class:
Write the words for the new European anthem:
http://www.lyricsondemand.com/b/beatleslyrics/backintheussrlyrics.html
At least a switch to the Euro has dropped off the political radar in the UK. It was always going to be hard for them to win a referendum, but now...
The UK will remain concerned that Ireland, Iceland and the home front don't start massive spontaneous regurgitation in the vomitoriums of lore. (Although mass exits aptly apply)
As CB discusses, it looks as if the central planners want to return to the tried and true of free bread & games. As we appreciate that the bread isn't free and the games aren't.
Informative article. Been one goal since the start. About to be reached. Much more predictable than current economic gyrations. And this without mathematics involved.
As the treaty of Lisbon opened up the possibility for the EU government to re-define its own purposes and adapt accordingly, it should be much easier than passing a new popular vote round.