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Why The EU Has Failed

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It has all gone belly up if we look at the EU and we are honest. Yes, they might be trying to paper of the cracks and yes they might be shoving some super strong glue in their to stop everyone pulling in different directions, but if they are really truthful about it, the EU28 (now that Croatia has become a member since July 1st 2013) is just about as dead as a goldfish that has floated to the surface, belly up. We all know what we do with dead goldfish, too! The EU has hardly grasped the nettle and come to a quick decision over some of the failing states that are just dragging them further and further into the red, have they?

EU: belly up?

EU: belly up?

But, when the EU was set up it wasn’t what was meant to be. With the signing of the Treaty of Rome on March 25th 1957 between Belgium, France, Italy, Luxembourg, the Netherlands and West Germany, there was meant to be a reduction in customs duties, the setting up of a customs union, a common market, common workers, common services and a common transport system and agricultural inter-linking. That all went wrong even back then when the EU just produced butter mountains and milk lakes and little all else, through over-production and bad management of funding. Those surpluses returned in 2009, when the EU had enormous stocks of wine (2.3 million-hectoliter wine lake), cereals (717, 810 tons) and milk, to name but a few. The EU’s Common Agricultural Policy already keeps prices artificially high in the market due to high import tariffs (18-28% according to estimates). Thus competition is limited in the EU from non-EU producers, and the prices within the EU remain relatively higher than they should be.

But, the CAP is not the only thorn in the side of the EU’s already weary body. What are the reasons why the EU is floating belly-up like a dead fish that nobody wants to feed off?

Reasons Why

1. Numbers

EU28

EU28

The EU has just expanded and expanded and we know what happens to bubbles at they get blown up more. Inflated, hot air and nothing more. The EU finds its origins in a founding group of 6 nations. That quickly expanded and went up and up and up. The more the merrier? Hardly! Today they are still adding to the number. It would seem far from reasonable to throw tindersticks onto a fire that is already ablaze and roaring away, would it?  You think they would have held back and postponed the entry of Croatia to make the EU27 notch up one more. You think they would have told Latvia to hold its horses until the horizon looked somewhat better than it does at the moment before wanting to go full steam ahead crashing into the Eurozone in January next year! It’s numbers that are the biggest downfall of the EU. They just keep on adding in the hope that they will unite the world.

2. Growth

EU: growth?

EU: growth?

It would seem to be a bit of a no-brainer to suggest that the success of the EU could be based upon its growth. That’s what the EU was created for, to break down barriers and increase trade between the member states. In the beginning the united countries of Europe had a combined growth of 4% on average in the 1950s. That lasted right through into the 1960s too. But, by the 1970s it had started to slide and growth stood at 2.8%. It was at 2.1% by the 1980s and even lower at 1.7% in the1990s. It then hit zero and has declined even further still, going into negative figures. The EU contracted in 2012 by 0.6%. This year it is predicted that it will contract by0.1% again. When will successful growth poke through?

3. Politics

EU: Politics?

EU: Politics?

Governments in member states have over-ridden the desires of their populations. When a referendum is taken on some matter regarding how the EU operates or some treaty that is going to come into effect, the people might vote against it. But, that’s not a problem. The EU has removed legitimacy from successive governments further and further. When the governments get the wrong answer to the referendum, they just hold another one until they get it right. The Danes voted against (50.7%) the Treaty of Maastricht in 1992. A second referendum (admittedly with four opt-outs) was held in 1993 and passed. In 200153.9% of voters in Ireland rejected the Treaty of Nice. Another referendum was held in 2002 on the same treaty and it passed with 62.9% in favor of it. Perseverance is the order of the day. Will David Cameron do the self-same thing when it’s his turn? Beware people!

Portugal has a predicted contraction this year of 2.3%. The Portuguese Constitutional Court voted against certain austerity measures that were in line with the European Commission. But, the EU forced Portugal to accept by threatening to withdraw precious funding in the event of not complying. They listened up and voted for the austerity.

4. Rich Myth

EU: Get rich quick?

EU: Get rich quick?

Why are countries so dead set on joining the inner circle? Simply because they believe that they will strike it rich and be pulled up to the same level as the richest nations in the EU. They will suddenly transform themselves into the luxurious French, the industrial Germans or the financial Brits. It simply hasn’t happened. That’s a closed club. But analysts agree that countries that are poor and lagging behind will still be trailing it in the next few decades. The rich will grow richer and the poor will either remain where they are or they will advance at a snail’s pace. Judging by the Greek situation they will never be in a position to pay back their mounting debts.

5. Too Old

EU: old?

EU: old?

European citizens are ageing faster than they’d like. By 2060, there will be 12% of the population that is over 80 years old. Younger generations today will have not only the burden of paying back the sovereign-debt crisis, but they will also have the added burden on their shoulders of financing the growing ageing population. They’ll be working for next to nothing anyhow.

Conclusions

Apparently the banks in the world that we had built were “too big to fail”. The EU is exactly the same and we all believe that it too is too big to fail. But, if we look back at what the banks did to change their situation after we granted them the money to show them that they were indeed too big, we can see that they did nothing more than carry on doing what they had always done: investing, making money, making money hand over fist and telling the taxpayers that bailed them out that they wouldn’t be getting any more loans as they were not a good investment.

The EU will do exactly the same. The troika of the European Union, the European Central Bank and the International Monetary Fund has just decided yet again to bail out Greece as it is too big to fail (although decidedly smaller than it once was, admittedly). A tidy sum of $8.7 billion will be winging its way to the men in Athens to finance what (let’s hope it doesn’t go missing on the way)? Austerity, probably! That’s about all it will be good for. But, afterwards, what will happen, once they get the money? Just like the Goldman Sachs and the Citigroup Inc.’s of this world, the EU-member states that get bailed out will just carry on doing what they wanted all along. Maybe they should take a leaf out of the books of some of those banks that got bailed out, like Citigroup Inc. and the Bank of America Corp. The first spent $3 million and the second $1 million on lobbying the US, which was more than any other bank. They ended up with a bigger share of the pie that was worth the princely sum of $700 billion.

It’s kind of a case of the louder you shout, the more you will get. So, carry on shouting guys, you will probably end up with more than the rest. Then, you can carry on doing what you have always done best. You’re far too big to fail! But, if the EU is far too big to fail, then maybe it should be broken up. Being too big is not good for anyone (and certainly not the taxpayer) except the gigantic monster that is the beneficiary of the financial aid being doled out willy-nilly. It’s really no wonder that Latvia has gone against its polls (only 22% of Latvians actually want to join the Euro) and said that it will enter the Eurozone in January 2014. What the people in Latvia can’t see, is that they might well be brought down by the Club Medders of Portugal, Italy, Greece and Spain, but they will be bailed out if they go under by the troika. But, there are some out there that think that joining the sun-baskers on the beach when the tide has gone out already will mean they are doomed to failure. The EU has failed dismally, and nobody is prepared to admit that, least of all the ones that are in the driving seats today.

But, there are 56% of the British that would vote to leave the EU when (and still if, despite David Cameron’s declarations) the referendum actually happens. That might not surprise anyone given the euroscepticism for which the British excel. In the spring of 2012 a poll was carried out by TNS Opinion and Social for the European Commission.

  • Only 42% of all EU citizens believe that their own interests are being looked after by Brussels.
  • 31% of those polled believed that there was a positive image of the EU.
  • 60% of EU citizens do not trust Europe.
  • There is a growing feeling of mistrust of the EU today and every country from Bulgaria to Luxembourg has an anti-European political party waging war on the ‘leave-the-EU-now’ front.

The EU looks as if it could certainly make do with some image-enhanced marketing techniques to get their act together and make it look as if they are doing some good. When it comes down it might just come down in a cloud of dust and leave everyone in a massive heap on the floor.

Anyone want the job as EU marketing guru? 

Originally posted: Why the EU Has Failed

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Thu, 07/11/2013 - 15:29 | 3742489 robnume
robnume's picture

Me, i agree with Mohandas Gandhi, when asked about "Western Civilisation". "It would be a good idea", said he.

Thu, 07/11/2013 - 14:16 | 3742192 kchrisc
kchrisc's picture

Thanks for the article, I only needed to read the title.

The EU is not a failure, the owners of the EU are accomplishing exactly what they set out to do--rob and enslave the people of Europe.

Look, government is nothing more than a thieving and killing machine for the elites. One should always keep that in mind.

Thu, 07/11/2013 - 13:26 | 3742021 Richard Whitney
Richard Whitney's picture

The European Common Market is administered by elitist Europeans who hate the commoners, and who hate markets.

What could go wrong?

Thu, 07/11/2013 - 11:50 | 3741647 OneTinSoldier66
OneTinSoldier66's picture

"The EU is exactly the same and we all believe that it too is too big to fail."

 

Well personally, I do not believe there is any such thing as "too big to fail". It's something that exists only in peoples heads. A country, a government, or a bank is TBTF? Why? Just because someone says so, that makes it so?

 

I hereby declare that my mortgage is too big to fail and I need a bailout pronto, or else my mortgage is going to enter foreclosure proceedings. So now I will get a bailout, right? (yeah, I know, sometimes I'm a ridiculous dude)

 

Or is it a mob mentality thing? Where the rich and powerful get to mob the middle class and the poor simply by declaring something to be TBTF?

Thu, 07/11/2013 - 11:15 | 3741359 medium giraffe
medium giraffe's picture

Founded on the fear of further wars on the continent,  and realised through the polarised filter of a centralist wet dream, Europe is a disaster and the product of intellectual dishonesty.  The Europeans are diverse in their cultures, economies and religions - it isn't enough to draw a fucking great circle around it and plant a new flag.  What is good for Germany is bad for Spain, what works in France fails in Greece.  Removing individuality and the controls of statecraft from member states whilst facilitating economic diaspora is a bad idea. Because it's really obviously a bad idea.

As for the wars? Well, we should to be allowed to grow up and embrace enlightenment,  in the same way banks should be allowed to fail and stocks should be allowed to drop.  I agree that Europe is the mother of all TBTFs, but it it is an attitude that is pervasive, leading to perpetual baked in failure and zombie immortality. This is the rotten heart of the new normal and EU is just another analogue of that same misguided principal.

 

Thu, 07/11/2013 - 10:16 | 3741282 Azannoth
Azannoth's picture

It took the Soviet Union 70 years to collapse, and it was shaking and wobbling for at least 25 years prior to it's demise, so I would not be grave-dancing yet, as a young person I am planning to move out rather than wait for this sucker to go down

Even if the EU collapsed tomorrow, it would change nothing in European peoples socialist mentality

Thu, 07/11/2013 - 11:37 | 3741676 Umh
Umh's picture

People who believe government is the answer to every problem will never change their minds. They will just say that more should have been done or done sooner. The worst part is having the government do everything ensures the simultaneous failure of essentially unrelated functions.

Thu, 07/11/2013 - 11:01 | 3741523 angel_of_joy
angel_of_joy's picture

USSR was a much more serious enterprise from the very start. It had an unified banking system and an unquestioned central hub for collecting and redistributing its income (taxes). It even had an ideological doctrine, which helps rallying the great unwashed around an idea in time of crisis. When everything still failed, it had the KGB and the Red Army to keep the cover onto the pressure cooker. It also happened to survive and win a certain world war at a critical time.

THAT's how it lasted 70 years !

EUSSR on the other hand, will be extremely lucky to complete it's second decade...

Thu, 07/11/2013 - 09:18 | 3741103 the tower
the tower's picture

I don't think that the EU has failed, but I do think the Euro has failed. As has the dollar, and the yen, and every other currency.

Sure, the EU made its mistakes, bad decisions, and abuse of power. That's what politicians do. Nothing new there.

But it brought great opportunities and wealth too, plus consumer protection against cartels. It's not all bad.

I know that many contributors want to make a statement, but black/white reporting and fearmongering should be on their way out by now.

Try to appeal to our intelligence.

 

Thu, 07/11/2013 - 08:29 | 3740933 falak pema
falak pema's picture

Europe's failure is conversely the triumph of the German "Schroeder" model. 

We now have to rally around that flag, and try and tighten our seat belts, until a new continental paradigm emerges, hoping this financial shit gets eaten away by the termites of gradual decay or flash storm of magnitude unknown. 

I don't see the Euro zone imploding. I do see it in pain. But that is the price to kiss Pax Americana goodbye when US influence world wide will diminish and the world will climb out from under the petrodollar rock. 

What Europe has to learn is to walk on its own feet and throw down the crutches of post 1945 Pax Americana construct; that has morphed since the mid 60s into this impossible empire of convoluted evil. 

We have no common continental vision and that is the biggest failure of Franco-German rapprochement. It has not generated a level socio economic playing field. Will it ever is a good question. I hope so as its a question of civilization; preserving it.

Thu, 07/11/2013 - 11:15 | 3741439 Treason Season
Treason Season's picture

Fake fevered pema is a bankster kabal shill.

Caveat emptor

Thu, 07/11/2013 - 09:53 | 3741131 Element
Element's picture

Remember also that the trajectory of such great-power changes depend a lot on how the more insecure small and middle-powers feel about developments, and about their geography, current technology. And how they feel about the prospects for relations with other powers, as potential strategic partners and 'allies', will, or can progress. This is an interesting time because I sure don't think China can attract the close and trusting (gullible and dumb) allies needed to ever become more than a regional power. And yet the US is going to shrink back to being predominantly a North Pacific and North Atlantic power (as it should be).

Which means we seem to be looking at the end of the global-superpower paradigm. The associated 'global-alliance' sub-paradigm is also falling apart. No one actually believes it's more constructive than counterproductive. The previous international 'order' has shit the bed and we can all smell it, so no good pretending it hasn't.

In such conditions some fascist always thinks this is their chance to run amok and steal territory and resources, while others (i.e. 'good-guys') seek to manufacture thin excuses and pretexts to 'intervene', in order to do much the same things, just a little bit differently, a bit more finesse.

The lesson for the US from Iraq, Libya and Syria is that you mustn't seem too willing. You must wait and try to look like you really don't want to get involved which is hard to do when you have bases and offensive weapons literally everywhere. Though the US has been trying really, really hard over the past year to give the impression they don't want anything to do with invading Syria. But unfortunately, a former US general spilled the beans on that a few years back - they are very keen to smash Syria, and the next, and the next, and the ... and so on.

But then again, the US is not actually pulling-back to the Pacific and North Atlantic basins either, anymore than they're pulling-out of Afghanistan, or the middle-east. They are of course intending to staying while calling it 'leaving'. The long, long, loooonng farewell. Thus Washington is playing its latest great ruse on the world, determined to remain over-extended, and thus to collapse in-situ, in due course.

Eventually everyone will realize that the US is going to try to play the global-superpower role, minus even an accommodating and cooperative 'global-alliance' network, as the USSA expends all local patience and residual good-will around the world.

Then, we will see true-colors, and real ugliness.

 

Lay down with dogs, you get up with flees.

https://www.youtube.com/watch?v=6B8LEfXodzA

Thu, 07/11/2013 - 08:02 | 3740848 overmedicatedun...
overmedicatedundersexed's picture

ghord comes out swinging, who ,who, says EU kaput? WHO will not wear the ribbon of EU solidarity? (tlp of hat to sienfeld & aids march episode)

Thu, 07/11/2013 - 08:29 | 3740914 Ghordius
Ghordius's picture

nah, I'm just looking for a serious fight. and finding none. some parts of the article are fine, and others are so propagandistic that I won't even bother. example: statistics about how many EU citizens would like their nation to leave that club: missing

the funny thing is that for all what is wrong about the EU, most discussions here are about misrepresentations of it. in reality, most ZHer want to see it as a twin of the USA if American or moan about when the UK is going to leave it if British

meanwhile the financial shills want some money to flow back to the US markets and the punters want to talk about their EUR shorts book

and some are like this guy: "Crash, Europe, crash!..." - just posted in a different article, hoping for the world to reach a new age by having europe burning down first. Don't know why some think this way, but that's the way it is

Thu, 07/11/2013 - 11:03 | 3741509 Treason Season
Treason Season's picture

Hey Mr Smarm, just a gentle reminder but your cherished Eeeeeee You is NOT Europe despite your attempts to confound the issue.

Thu, 07/11/2013 - 12:16 | 3741783 Jonas Parker
Jonas Parker's picture

Ghordius is applying for the position of EU Marketing Guru advertised at the end of the article. Sounds to me like "de'ja moo"... "I've heard this bull before"...

Thu, 07/11/2013 - 08:59 | 3741025 andrewp111
andrewp111's picture

Come on. We all love to watch things burn. Especially large burning buildings with no exits.

Getting rid of the UK could be the best thing for the EU. They could then fully form the 4th Reich that they were designed to be.

Thu, 07/11/2013 - 11:57 | 3741734 Ghordius
Ghordius's picture

interesting point of view. let me see: slightly positive trade balance, self-sufficient about food, debt owed mostly to other eurozoners, biggest trade partner of the world, less financialization than all the others... are you sure you are talking about the eurozone with your "large burning buildings with no exits"?

and what is this 4th Reich thing? is it supposed to be more similar to the 1st, the 2nd or the 3rd? since you talk about "designed", do you actually understand that the EU is quite heavily designed as a confederation? or do you expect changes in that?

Thu, 07/11/2013 - 07:52 | 3740811 orangegeek
orangegeek's picture

The EU will remain intact.  There will be a lot of hardship along the way.

Thu, 07/11/2013 - 07:42 | 3740773 Hobbleknee
Hobbleknee's picture

Will someone please tell Sweden?  I've been waiting for the housing bubble to pop for 5 years.

Thu, 07/11/2013 - 07:54 | 3740820 Sudden Debt
Sudden Debt's picture

I've learned a few things over the years. A lot on Zerohedge and I must say I missed something untill I noticed it and hit me in the face.

ON A LONG ENOUGH TIMELINE

That shit has cost me a shitload of money.

Thu, 07/11/2013 - 08:01 | 3740845 Ghordius
Ghordius's picture

yup. on books, history gallops. with purpose. when you are in the midst of it, it creeps. and jumps back and forth, without direction

Thu, 07/11/2013 - 08:37 | 3740955 Hobbleknee
Hobbleknee's picture

But I need a house now!

Thu, 07/11/2013 - 07:13 | 3740735 new game
new game's picture

first they kicked a can, then a drum, now a tanker?

my fucking foot can't move that fucker anymore...

Thu, 07/11/2013 - 07:43 | 3740782 Element
Element's picture

Hope your foot's good to kick the first stage of a Saturn-5 rocket into orbit then.

http://blogs.sundaymercury.net/weirdscience/saturnv2.jpeg

Thu, 07/11/2013 - 06:59 | 3740720 fredquimby
fredquimby's picture

Mark to Market gold. Bitchez.

With that potential massive money earner hanging over the EU balance sheet, IMO the EU ain't going nowhere...... unless POG drops to 100Euro an ounce. Then the ECB balance sheet is super screwed with no leg to stand on. POG rises or doubles or triples(!) however, then the ECB will be dispersing enough M2M freegold euro spondoolies for most EU countries to pay off their debts.

H/T FOFOA for enlightening me to this, the EU's reset button or as per fofoa the "EU's Nuclear Option".

Thu, 07/11/2013 - 07:40 | 3740775 Hobbleknee
Hobbleknee's picture

Link please on the FOFOA nuclear option?

Thu, 07/11/2013 - 07:55 | 3740822 Ghordius
Ghordius's picture

you have to read a lot of FOFOA if you want to understand what they are talking about. this, from 2010, is as good as any other entry point

Thu, 07/11/2013 - 08:42 | 3740975 fredquimby
fredquimby's picture

Great choice of link :)

Thu, 07/11/2013 - 08:00 | 3740841 Hobbleknee
Hobbleknee's picture

thanks

Thu, 07/11/2013 - 08:08 | 3740870 Ghordius
Ghordius's picture

you are welcome. but I'd try to understand what he calls "freegold", first, then his theory about why the ECB is the "most modern" of the central bank setups, and then you are - after 500 pages, mind you - almost there towards his "Nuclear Option"

the real "architects" of the ECB thought on some points in similar terms, but they were thinking more in terms of historical scenarios

his theory describes something unprecedented, in this form, though not that dissimilar from the 19th Century

Thu, 07/11/2013 - 07:52 | 3740774 Ghordius
Ghordius's picture

perhaps, though Uncle Sam would be really, really pissed about that, wouldn't he?

though remember here the article is supposed to be about the EU. 28 members, a trade & commerce regulation zone. EU parliament, EU council, EU commission, EU budget paid by member nations

not about the eurozone. different club. 17 members, monetary zone. the EUR, the ECB, the eurosystem of national CBs

every article that starts talking about the bigger club but in reality wants to snipe at the second one is just trying to make some cheap propaganda. which is a pity, imho, then pivotfarm usually has higher standards

examples in case: the UK is in process of leaving the first club but isn't in the second one. Croatia just joined the EU, Latvia is on the way of joining the eurozone

Thu, 07/11/2013 - 06:57 | 3740718 EU victum
EU victum's picture

The UK is on track to be first member to exit the EU (DDR/Neo Roman empire), imho it's just a matter of time that this communist circus implodes, as they run out fast of people to pay for their moralist superior unrtealistic objectives! There is no perpective for our children, they are basically already inslaved!

Thu, 07/11/2013 - 07:58 | 3740834 Ghordius
Ghordius's picture

"moralist superior unrealistic objectives"? that's a good one. as they say in Missouri, show me

Thu, 07/11/2013 - 07:35 | 3740768 Ghordius
Ghordius's picture

the UK leaves the "communist circus" and suddently the UK is... what? free to have it's own regulations on bananas, olive oil serving portions, cocumbers and such? or as free as Norway? which means that if an UK producer wants to export something to the EU it still has to abide the same regulations?

seriously, as much as I welcome a BriXit I wonder about what Britons think that will really change. make one serious point in this scenario. just one. even the smallest of the pros

Thu, 07/11/2013 - 08:41 | 3740972 Reformed Sheep
Reformed Sheep's picture

I think we will become the European hub for Chinese currency and then ditch the EU. Picking a side and all...

Thu, 07/11/2013 - 11:47 | 3741707 Ghordius
Ghordius's picture

the City of London is already the extra-eurozone hub for EUR trade, and all financial centers want to become the hub for Chinese currency. what has this to do with belonging or not to the EU?

Thu, 07/11/2013 - 11:12 | 3741573 Skateboarder
Skateboarder's picture

Why has the EUR failed because of central wanking. The EU failed because they're wankers with a couple millennia of hatred for one another.

Thu, 07/11/2013 - 12:39 | 3741863 Badabing
Badabing's picture

Ever since the EU was formed Gold has been going up, or is it the dollar has been going down, whatever.

Once upon a time the Euro was anchored to gold by a % and this caused us to see gold without the fiat beer goggles on. But lately the euro has undergone a transformation onto the twilight zone of quantitative easing or to us laymen printing out the ass.

To destroy the EU the euro had to be destroyed and vice versa !

This whole fiatasko the housing crisis the whole ball of shit financial meltdown may have been orchestrated by the dollar PTB to keep control of the world currency.

MAKE NO MISTAKE the end of the EU is not a good thing!

JM2C

Thu, 07/11/2013 - 14:52 | 3742336 whotookmyalias
whotookmyalias's picture

All good comments, but you can boil it down to a few simple concepts.

  1. Greed
  2. Central bankers (see greed)
  3. Bloated Keynesian government spending (see greed)
  4. Attempts to maintain democracy and government in each member nation (see greed)
  5. Derivatives and Ponzi banking policies (see greed)

The only way it will work is to eliminate all semblances of nations and form one big centrally governed body.  See Germany, West absorption of East for an example.

Thu, 07/11/2013 - 16:00 | 3742607 ebear
ebear's picture

"The only way it will work is to eliminate all semblances of nations and form one big centrally governed body."

Ah, but then there'll be no place to hide (see Snowden).

Do NOT follow this link or you will be banned from the site!