The Nation

opinion

Smaller
Larger
overdrive

If it quacks like a duck, it might be a euro

"If it looks like a duck, quacks like a duck, it just might be a duck. When we are talking about the euro, it now looks like a currency, acts like a currency, it might as well be yet another currency," wrote Axel Merk of Merk Investment shortly after the European Central Bank's announcement of an unlimited bond buying programme.

"The new framework of the European Central Bank (ECB) morphs the euro from a currency of nations to a currency of the 'United States of Europe'.… Going forward, as weak nations in the euro zone ask for help, they cede sovereign control over their budgets."

The "United States of Europe" or the "Federation of Europe", whatever you might want to call it, is emerging as part of a grand design to tear down the nation states. Only a financial crisis of this galactic scale can alter the entire landscape of Europe.

European Commission President Jose Manuel Barroso on Wednesday called for more European integration to help tackle the euro-zone debt crisis, through the creation of a "federation of nation states".

"I call for a federation of nation states. Not a super state. A democratic federation of nation states that can tackle our common problems, through the sharing of sovereignty in a way that each country and its citizens are better equipped to control their own destiny," Barroso said. He added that the creation of such a federation would ultimately require a new treaty, to be ratified before 2014.

Barroso's statement was buried by the German Constitution Court's ruling, which cleared the way for Germany to participate in the European Stability Mechanism and fiscal pact with the EU, though both measures need further approval from the Bundestag. For the moment, Germany seems to play along the "Federation of Europe" game plan.

The bankrupt EU states are now at the mercy of the ECB and the bureaucrats in Brussels. If they don't sign away their sovereignty, they will be left in the cold to fend for themselves. But Greece, Spain or even Italy won't survive for very long as the euro takes flight from their banking systems for safe havens. Unemployment is rising. Economic growth is grinding to a halt. Social unrest is about to explode.

To qualify for the bailouts, they will have to cede their sovereignty - fiscal, banking and eventually nationhood. In return, the weak EU states will get bailouts from the European Stability Mechanism (about500 billion euro) and the European Financial Stability Fund (about 440 billion euros). At the same time, the ECB will be committed to an unlimited - if unlimited does exist - bond purchase programme to drive down the bond yields.

The "United States of Europe" will make it possible to transfer wealth from the northern European states to the southern European states. It will also end the disparity in the competitiveness levels among the EU states. In this new political landscape, Germany would become the California, while Greece would become the Vermont of the United States of Europe.

A process is underway not only to save the euro and the European Union experiment but also to force the EU states into the grand federation. The ECB is working on a Europe-wide banking union, at the heart of which lies a Single Supervisory Mechanism (SSM) for banks in the euro area. The plan will go into effect by the end of 2012. There are three components of an integrated banking union: a single rulebook in the form of capital requirements, harmonised deposit protection schemes and a single European recovery and resolution framework.

The question is, will the Europeans go along with the bureaucrats' game plan to cede their sovereignty and become part of the United States of Europe? A political minefield lies ahead for Europe. The Germans are likely to jump ship eventually, while France, Spain and Italy are attempting to contain their northern neighbours in a subtle geopolitical design that will make or break Europe.


Comments conditions

Users are solely responsible for their comments.We reserve the right to remove any comment and revoke posting rights for any reason withou prior notice.