Wednesday, April 13, 2005


French chauvinism may soon sink the EU and the euro; (GOOD RIDDANCE!):

Three articles from today's European press make me think that the ENTIRE EU EXPERIMENT will soon be in DIRE need of MAJOR re-tooling -

(1) from the

Deutsche Bank warned yesterday that a likely French 'No' to the European constitution could begin a wave of currency speculation across Eastern Europe, setting off a chain of economic disruption. Norbert Walter, the bank's chief economist, said rejection of the treaty in France's referendum on May 29 could halt the eastward expansion of the euro-zone. The Turkish lira is also vulnerable."There could be a wave of currency attacks in the new member states. These countries would then have to raise interest rates. We could see enormous exchange rate swings," he told FT Deutschland. "The problem is that the EU has no strategy for dealing with a rejection of the treaty. People may well question whether the eurozone should have any new members at all," he said. The warning follows eight consecutive opinion polls showing the 'No' side are ahead. An Ipsos survey for Le Figaro yesterday gave a six-point lead to opponents of the treaty prompting a front-page headline: "The No takes root".

(2) from the UK TELEGRAPH:

A top European Union official said France, Italy and Spain faced a catastrophic" slump in exports as a fresh batch of gloomy data hit the eurozone yesterday. French industrial output slumped 0.5pc in February, following a 2.2pc contraction announced last week by Germany. The slide was blamed on high oil prices and the continued strength of the euro against the dollar and key Asian currencies. The French prime minister Jean-Pierre Raffarin admitted yesterday that he now had no hope of fulfilling his pledge to cut unemployment below 10pc over coming months. The yield on 10-year French bonds fell to near historical lows of 3.58pc. The aborted recovery is causing growing alarm at the European Commission and the European Central Bank. Both bodies have slashed their eurozone growth forecasts from over 2pc to 1.6pc in 2005. A senior EU official said the eurozone was now acutely vulnerable to any slowdown in the United States, having failed to generate enough internal demand to sustain recovery.

(3) from the IHT:

At a meeting in Brussels, EU leaders took a strong turn toward entrenching Europe's high-tax social model by backing away from a radical deregulation of the Continent's services sector. They wanted to assuage fears among voters in France and Germany that cheaper workers from the free-market economies of Eastern Europe would steal their jobs.
These articles demonstrate that it's becoming increasingly obvious that the EU is a socialistic bureaucratic mess that's committed more to its own existence than to the betterment of the lives of ordinary Europeans.


Furthermore, if and when the French electorate votes "NO!" to the EU constitution - as NOW APPEARS LIKELY - major banks and major investors from all over the world may BAIL OUT of the Euro currency - creating a major financial crunch, if not DISASTER! (Think of Mexico and the "Asian Flu" financial crises/bailouts - during the Clinton era - and multiply by five!)

Who could come to the rescue? Of course: the decidedly un-continental Texas "yokel" and "unilateralist" American president George W. Bush, and the "ultimate unilateralist" - World Bank president Paul Wolfowitz. How DELICIOUSLY IRONIC!

You know what would be DOUBLY DELICIOUS? If Bush and Wolfie DEMAND that - to get the bailout - the EU WOULD HAVE TO LIBERALIZE their economies and HAVE MORE TRANSPARENCY at the E.U.

This would have the added bonus of actually helping Europe!

As I have written in this blog many many times: Continental Europe needs a Thatcher and they need her NOW. WHY IS THIS INCONTROVERTIBLY TRUE? The ONLY nation in the EU with a robust economy and low unemployment is Britain - and only because of "classically liberal" Thatcher policies: the dismantling of socialism and the welfare state, lower taxes, looser labor/employment requirements for busineses, and a pro-entrepreneurial government. You'd think that the rest of Europe would've noticed the results in Britain, and already emulated Thatcher's policies - (as Blair has!)!?

Only massive denial and cognitive dissonance on the part of the Euro-left - and the strangle-hold they have on their governments - prevents the continent of Europe from having a new birth of freedom and of the prosperity which only freedom creates.

France and Spain and Italy and Germany - and the rest of Old Europe - need presidents and PM's who have the courage of Thatcher, and are willing to suffer unpopularity and the onslaught of non-stop reactionary attacks in order to bring about the REAL CHANGES that Europe so badly needs.

Stay tuned. France votes on May 29... I can't wait!

UPDATE: WELCOME BELMONT CLUB READERS! Please check out a few other posts while you're here. AND: If you're not a regular reader of THE BELMONT CLUB, you should be - EVERYDAY; (wherever his URL happens to be!).

UPDATE: Welcome DISSECTING LEFT readers! If you haven't read DL lately go there NOW for more on the looming problems in the EU(SSR!).


Pancho said...

Thanks for this synopsis! I can't wait for the fun to begin....!

Anonymous said...

Good read, Just adds more reason for My Europhobia, why not, everything else is in play

Anonymous said...

Please guys. As conservatives we should not get any enjoyment in the idea that one half of the west is getting ready to implode on istself. This won't be any good for anybody least of all the rest of us in the west.

I understand that we have a right to be pissed off in the way the French have handled the whole Iraqi affair and that they are now downright hostile to the US. But it does no good if the whole region is going to implode as it most probably will over the course of he next 15 years or so. These are not good times. Recall, WW11 when we had to pick up the pieces.

We should look at the France as a country in deep crisis that is acting like a punch drunk boxer striking out in all directions without any logic behind it. They are our cousins and rather than gloat about their situation we ought to sit on the sidelines and try and help them when they come running because they most certainly will.

Anonymous said...

I agree that France and Germany are in sorry shape, but GB is not the only nation in the EU with a robust economy. Ireland has lower unemployment, faster growth and lower taxes, including the lowest corporate taxes in the EU.

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