Goodbye Old EU, Hello New Multi-Speed Europe

Tyler Durden's picture

Authored by Peter Korzun via The Strategic Culture Foundation,

Hit by a wave of crises, the European Union is urgently searching a new model of functioning in order to survive in one form or another. The need to balance between unity and diversity is a dilemma faced currently by the bloc. Currencies, politics and interests differ to make a new pattern of European integration a reality.

It is expected that the final decision on the future functioning of the community will be made in December. The coming months are likely to see further turbulence. The EU faces legislative elections in the Netherlands this month, followed by presidential elections in France in April and May. Germany holds legislative elections in September.

French President Francois Hollande hosted his counterparts on March 6 in Versailles, near Paris, to prepare for a larger EU meeting in Rome on March 25. France, Germany, Italy and Spain used the occasion to express support for a multi-speed Europe in a joint effort to cushion the impact of the Brexit. «Unity does not equal uniformity», French President Francois Hollande told reporters ahead of a working dinner with German Chancellor Angela Merkel, Spanish Prime Minister Mariano Rajoy and Italy’s Premier Paolo Gentiloni. «For this reason I support new forms of cooperation», he said at a joint press conference with the other leaders. Some EU member states could «go more quickly» and «further in areas such as defence and the eurozone, by deepening the economic and monetary union, and by harmonizing fiscal and social policy», the French president said. Other EU members could choose to opt out of measures intended to deepen integration, he added. Hollande also emphasized the need for a European defense that would operate in coordination with NATO.

He was backed by his German counterpart. «We must have the courage to accept that some countries can move forward a little more quickly than others», German Chancellor Angela Merkel said. She insisted that other member states should be able to join the more advanced ones when they are ready. «A Europe of different speeds is necessary, otherwise we will probably get stuck. If Europe gets stuck and doesn't develop further, then this work of peace may run into danger faster than one might think», Merkel noted. The chancellor was one of the first to mention this solution in February at the informal EU summit in Malta.

The concept allows some member states to press ahead with integration faster than others. Those in the «slow lane» would restrict themselves to participation in the single market and co-operation on foreign and security policy.

Besides Germany and France – the European Union’s «engine» – the concept of multi-speed Europe is supported by Italy, Belgium, the Netherlands and Luxembourg and several other rich EU nations. The Baltic States are likely to back it too.

In the preparation for the EU summit in Rome on the occasion of the 60th anniversary of the Treaty of Rome, the European Commission unveiled on March 1 new ideas to keep the bloc unified. The White Paper on the Future of Europe foresees five possible scenarios for the continent by 2025: to carry on as usual; function as a single market only; do less but be more efficient; allow groups of member states to advance at their own pace; or do far more together. Thus, the EU’s executive branch is passing the buck to the member states to decide in which direction the EU should be heading.

The Commission President, Jean-Claude Juncker, argued in the European Parliament that a multi-speed Europe was the best solution. EU leaders are now considering Juncker's options ahead of the Rome summit, where they will make their own declarations about the way forward after Britain's expected departure in 2019.

The implementation of the multi-speed Europe concept would see some EU countries grow more united on economic and defense matters while allowing other states to catch up later. The «core» EU states could move faster and further in deepening the eurozone and harmonizing their fiscal and social policy.

The idea presupposes breaches in the basics of European integration, such as the single market, or the four freedoms of movement, capital, goods and services. In a nutshell, it all boils down to EU integration in subgroups, which is already de facto happening.

Today, the EU is divided into clubs, at times overlapping mini-coalitions based on shared geography or interests. Some countries belong to the Eurozone, some belong to the Schengen Zone, and some EU members strengthen cooperation within the European Patent Network. Germany, Sweden, Belgium the Netherlands and Austria consider the idea of creating a «mini-Schengen» and collectively close off their borders to the rest of Europe to halt the flow of refugees into their countries.

Last September, Greece organized a summit of Southern European countries – the so-called Club Med. They are prone to support more protection measures and want Brussels to give individual governments more leeway to spend and borrow as they see fit.

There is the Visegrad Group of emerging Central European powers – Poland, Hungary, Slovakia and the Czech Republic (V4). There are the tiny Baltics who share much in common. And there is the Nordic Council (whose members include non-EU Norway and Iceland). Actually, Scandinavia is already a bloc within a bloc. These nations are historically close to make them natural bedfellows. The Nordic Council’s activities never hit media headlines, but this union already exists to aid the Northern European international governance.

The Visegrad countries have refused to take asylum seekers and migrants despite EU demands for solidarity.

Hungary's leader Viktor Orban wants to build an «illiberal democracy« and the Polish government is under EU monitoring over alleged constitutional violations. On March 2, a day after the White Paper came to light, the Visegrad group members issued a joint declaration to the effect that find the idea of a multi-speed Europe unacceptable. They look upon a multi-speed Europe as a sign that they will be treated as poor relatives or second-class citizens.

Multi-speed Europe would create rival blocs and perpetuate divisions, with France and Germany setting the rules with others left to catch-up. Countries outside the core will be marginalized being kept outside of the decision making process. The EU is to become a loose alliance, a patchwork of blocs within blocks.

Calling a spade a spade, the EU is a bloc on the verge of destruction. The process of disintegration has started and it is unstoppable. A multi-speed Europe is merely recognition of the reality. This is the time to say goodbye to the EU we once knew. A patchwork of clubs is emerging instead to change the European political landscape once and for all.

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phead's picture

Everything changes, but CAP will still be eating 40% of the budget 25 years from now.Gotta subsidise those voters!

J. Peasemold Gruntfuttock's picture

Multi-speed Europe?

My initial observation is that all of Europe is on 'speed' the way they are currently acting.

What reasonable thinking person not addicted to noxious substances would bring the Union into a state of turmoil under the banner of 'equality'.

Barry of the Bath House has shown without doubt how well that plan has worked out for the other Union. NOT!

The world is not equal nor is it fair, and while admirable efforts are made to make it better it seems to bring out the worst in the bleeding hearts and breed corruption in the damned, the many duplicitous 'foundations' are the prime examples of this in our time.

At least dear old blighty has come to realise that speed, multi, 'mutti' or otherwise, is not the objective but progress is.

As the EU heads full pelt towards the 'Shyte Creek' 1000 ft waterfall in a barbed-wire canoe without a paddle, with the 'Shyte Greek' economy and others in tow.

 

J. Peasemold Gruntfuttock.

Mr 9x19's picture

each country has started to focus on their own dept and buy it back, internally, it smells burnt like never before, has if they plan the euro explosion, weird, isn't it ?

flicker life's picture

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Fireman's picture

Today Geert Wilders will show the Pedophile Politburo in Natostan sewer BrUSsel$ the future of this totalitarian disaster aka EUSSR.  The nation states of Europe will NOT be imprisoned in their satanic dystopia and milked and shorne for evil scum like Rothschild and their ilk.

The Europeons will no longer take this s#it and the Netherlands will be the first to show them.

 

Onward to the collap$€ of fiat filth and the political whores that peddle it!

flaunt's picture

Europeons, I like that. Definitely what the politicians think of the people they pretend to represent.

Ghordius's picture

a few factoids, a few soundbites and... a conclusion that is neither here nor there

shallow. the author could have written something on the spat Poland's gov had in the EU Council, where all other national govs, all 27 of them, voted to keep Tusk at his place... and Poland's gov the only dissenter

infotainment replaced with mis-info-tainment, the trend of our times

rondellio's picture

A few generalisatiions, a few labels from the agitprop kit...Why don't you, Ghordius, write something on the latest totalitarian move in EU: curtailing speech and excising speech-in the EU Parliament itself.  Too tough, even for a euro fanantic? 

scoutshonor's picture

It seems that when the world goes all in on stupid it is Poland that stands up and says NO.

I don't know what it is that makes them the way they are but I honor them for all the times they have stood up to stupid.

That Poland is there to keep an eye on the the E.U. gives a a bit of hope in a world that is increasingly a lost cause.

Erek's picture

"Germany and France – the European Union’s «engine»"

Time for an overhaul, or at least an oil change.

HenryKissingerChurchill's picture

"Germany and France – the European Union’s «engine»"
Time for an overhaul, or at least an oil change.

as far as I remember Germany is supposed to be the horse (engine) and France the driver...

adonisdemilo's picture

GOODBYE. IT WAS DEFINITELY NOT NICE KNOWING YOU..

Yen Cross's picture

 Great song

 

 As Rome was sacked...   The Greeks are starting to repeat history.

 Schmegma Wave tarders making some cash ??? London

Batman11's picture

Is the Euro the problem?

The Euro was an experiment that relied on economists and monetary theorists coming up with a workable solution.

There has been a fundamental shift in the assumptions on the capitalist system during the last forty years from the Keynesian era that preceded it.

Today we think capitalism will naturally converge to stable equilibriums.

Forty year ago we thought capitalism tended to polarise and the surplus needed to be recycled on the personal and national level.

This was done on the personal level through strong progressive taxation to pay for free and subsidised services that lowered the cost of living for those lower down the scale.

This was done on the national level through the Bretton-Woods system where the US was the hub of the global recycling system. Initially the US was the global creditor nation and its surplus was re-cycled. This then flipped over around 1971 when the US became the global deficit nation and its debt was re-cycled through US treasuries.

On the personal level the new system uses debt to take the place of re-cycling the surplus, e.g. Payday loans, sub-prime mortgages, sub-prime auto loans, student loans, etc .....

On the national level the system uses debt again, so deficit nations can keep on consuming while the fundamental imbalances between the West and East are ignored.

The EU has the four economic freedoms to allow these ideas to reach their ultimate conclusion as fast as possible.

2014 – “85 richest people as wealthy as poorest half of the world”

2016– “Richest 62 people as wealthy as half of world’s population”

2017 – Richest 8 people as wealthy as half of world’s population 

Inequality is the problem everyone is now talking about.

Is the system diverging and polarising or tending towards a stable equilibrium?  

Greece consumed on debt until it collapsed, the Club-Med nations, France and Ireland are in serious trouble.

Is the system polarising or tending towards a stable equilibrium?  

The answer to this question gives the answer as to whether the Euro in its current form will work or not.

The Euro is based on the assumption that it will naturally converge to a stable equilibrium.

Is that assumption valid?

Batman11's picture

The United States has 50 states that all use a common currency, the richer states subsidise the poorer states.

The United Kingdom has four countries that all use the same currency, England subsidises the poorer nations with the Barnett formula.

They don’t seem to have endless crises like the Euro-zone.

Was the Euro just the wishful thinking of economists riding on the crest of the wave of the new, neo-liberal ideology?

They had a new economics that was scientific and could be used to run the world.

The 2008, “How did that happen?” catastrophe was far away in the distant future.

The fault lines in the global economy hadn’t yet opened up, the Euro was designed when everyone was full of optimism about the new ideas and the prospect of a new normal of secular stagnation was impossible to even imagine.

“Fault Lines”, R. G. Rajan 2010 - Former chief economist at the IMF and Governor of the Central Bank of India, has realised capitalism needs help and has actually produced unsustainable outcomes that will not heal without intervention.

The Euro-zone is a flashback to a time when it was thought that capitalism was a self-stabilising system that should be left to run itself as it moves to natural stable equilibriums.

rondellio's picture

Knowledgeable posts, but isn't the obvious conclusion: economists change their minds a lot.  So much so that we can safely conclude they are unreliable.

 Further:

1. "capitalism" (a perjorative term) is not the issue.  Property rights and civil rights are.  "Capitalism" is a thing that may develop when these conditions are met, depending on the work related ethics of the people.

2.  Economics, like sociology, assumes the coercive power of the state.  Without that it wld be a past time, like stamp collecting, and as about as useful. 

shovelhead's picture

The primary function of any common polity is the protection of the individual from abuse and theft from inside or outside of the community and this requires force to be effective. It also requires a method to adjudicate disputes between parties and to mete out justice to offenders and this also requires force to assure compliance within that polities standards.

Any study of commerce and money flow that doesn't account for or acknowledge that vested power would be quite useless in a practical sense.

Capitalism is not a pejorative term, it is a mere descriptor of a process, that pared down to it's essence, is delayed consumption for future use with (hopefully) an additional benefit. Capitalism works quite well independent of any moral judgements about it's practitioners with the caveat being that dispute resolution outside of the law can be extreme and/or violent.

 

Mr 9x19's picture

technically, in a long timeline ? yes, but don't downvote you will get my point.

 

We have a single market today with the free movement of capital, goods and people.
At the same time, we have social standards that can vary widely between European countries.

Competition between companies, employees or countries no longer depends on the quality of work and the possibility of innovation, but on the ability to propose the lowest labor costs or conditions
Lower working hours.  

From then on, market choices are not based on surplus value, which is a surplus value of quality, but of a social depreciation.

 As a result, countries must adapt their social standards to these competitions.  

This poses the very big problem that high social standards are pulled down and weak social standards are not significantly pulled up.

And then, there is no real interest for countries with low social standards, since the gap in social standards is precisely a factor of competitiveness!

 

so, at the end,  people are all loosing the game, but the fact that the goal is the equilibrium, hmmm yep !

 

FUCK THE EU, END IT.

BarkingCat's picture

It is a valid assumption. 

When you spend more than you make, eventually you end up completely broke.

When vast majority of population is broke they rebel and when they succeed,  they cut off the heads of those who are at the top.

For that brief moment equalibrium is achieved 

Batman11's picture

The strong nations have an under-valued currency with the Euro.

The weak nations have an over-valued currency with the Euro.

It naturally tears itself apart.

The strong nations get stronger and have more under-valued currencies.

The weak nations get weaker and have more over-valued currencies.

Positive feedback leading to it's eventual demise.

 

Batman11's picture

It was always that way but they used to be able to re-value their currencies to compensate.

Professor Werner ......

"Like many economists, at the time I pointed out that the plans by the eurocrats to introduce a single currency were thoroughly misguided: monetary policy is the most powerful policy arm, and there is no reason why any government should amputate it. As I argued then, historically the German D-Mark had been strengthening since its introduction in 1948 against the currencies of its neighbours, and this reflected – and compensated for – increased German competitiveness. Their weakening currencies allowed German trade partners to keep their export industries in business and their workers employed. By introducing a single currency, future revaluations of the German currency were disallowed. This amounted to a de facto future devaluation of German purchasing power, revaluation of the currencies of the other European countries, and hence would render non-German economies less and less able to compete against German exports over time."

 

Batman11's picture

“The putative “father of the Euro”, economist Robert Mundell is reported to have explained to one of his university of Chicago students, Greg Palast: “the Euro is the easy way in which Congresses and Parliaments can be stripped of all power over monetary and fiscal policy. Bothersome democracy is removed from the economic system” Michael Hudson “Killing the Host”

Nearly every other economist outside the Chicago school thought the Euro would fail.

When visiting Europe at the time (I was based in Tokyo in the 1990s), and meeting my peers, the chief economists at other banks, I would of course discuss what in my view was the highly worrying prospect of these plans to abolish the D-Mark. I was astonished by their reaction. About half of them insisted that those plans were so lunatic that, of course, they would not be implemented.”

“The other half of the chief economists, like me, recognised that a single currency would be introduced, no matter how nonsensical the economics, since it was a political project. (The economics being bad, the politics was even worse: the end of democracy in Europe). They agreed with me that it was going to be a disaster. I asked the chief economist of what was then the fourth largest German bank: „If you think so, why don’t you speak up about this? You are forecasting gloom and doom, but I don’t see any reports by you or your bank about it.“ His answer was shocking: He said that there had been clear instructions from the boards of all the large German banks to their staff that no report on the abolition of the D-Mark and the introduction of a European single currency that was in any way negative was allowed to be published. The economists in the private sector had been muzzled by their bosses. The same I heard from journalists. So the German media only quoted the rigged reports from the banking economists.” 

WTFUD's picture

Any resulting/perceived monetary benefits for the so-called stronger EU countries (remember they are all bankrupt ) are divvied up among a few individuals & corporations as per your excellent illustration of the wealth falling into fewer hands, namely, the burgeoning wealth gap.

WTFUD's picture

'Was the euro just the wishful thinking of economists . . . ?' No, it was the brainchild of the Central Bankers, Goldman & JPM to further centralise/consolidate their Powers over the SOVEREIGN, much like, TTP/TTIP was intended.

Hence the demonisation of Trump who upset that particular Apple-cart ( Jolly-Boys Outing ).

Aussiekiwi's picture

The weaker countries with their over valued Euro will be fed upon by the richer countries, this is simply acknowledging that fact and trying to build a narrative to disguise it.

desertboy's picture

Let's see, how can I spin this?  "Unity does not equal uniformity"

yea, yea,.. that's the ticket.

 

 

BritBob's picture

The UK will opt for a hard Brexit especially when one country (or part of a country in Belgium) can stall negotiations for so long. Spain could act in a similar fashion over Gibraltar and has the cheek to maintain its Gibraltar sovereignty claim. Claim?

Gibraltar - Some Relevant International Law: https://www.academia.edu/10575180/Gibraltar_-_Some_Relevant_Internationa...

So it looks like a quick hasta luego !

 

scoutshonor's picture

Soon Catalonia will be independent.  This rock, she belongs to us.

shovelhead's picture

Do we have to worry about the Catalonian Armed Forces stomping around Europe?

scoutshonor's picture

We will rebuild the ships, and with the help of the weather channel to warn of the hurricans--who can stand before us?

;-)

Joe A's picture

"France, Germany, Italy and Spain used the occasion to express support for a multi-speed Europe in a joint effort to cushion the impact of the Brexit."

Three out these four have serious economic, financial and social problems and they think they can dictate their will on the rest. This will lead to the breakup of the EU.

gwar5's picture

So who wants to stop the unstoppable disintegration? Nobody.

 

me or you's picture

EU is dead, finito. 

shovelhead's picture

I guess they never quite figured on their "I have a dream" to come with a few albatrosses thrown in.

slammin_dude's picture

Multi-speed EU??? So basically Europe.... geeeeesus fuck these "think-tank" and "foundation" researchers and writers are like captain obvious....nice fucking tax scam....also why academics never had power before, and probably never again....they're imbeciles who can't do shit, spend millions to come to a conclusion that your average bum on the street could make for $5