The Issue at Hand
By Steven J. Grisafi, PhD.
The current edition, “Which way is Europe heading?” of the television show Conflict Zone demonstrates emphatically that Europeans are not having the proper debate they need to have now. The pertinent issue at hand is to address the motion urged by Chancellor Sebastian Kurz of Austria: that Europeans need to abandon the Lisbon Treaty and negotiate a new charter for a new European Union. I suggest a modification to Chancellor Kurz’s recommendation. I propose two possible paths towards a reorganization of the European Union. One may sprout from a merger of France with Germany to form the Central European Republic, around which all other willing member nations can coalesce later in stepwise fashion. Or a single step coalescence of all 19 member nations of the Eurozone to form the Federal Republic of Europe. It would be expected, when taking either path, that current member nations of the European Union as a whole, which do not participate within the initial merger, are to remain in the periphery of the core nation maintaining their current status as European Union members.
In the latest edition of Conflict Zone the panel discussion descended into an argument over cultural issues. That is not the pertinent debate Europeans need to have now. What is needed now is the determination whether or not Europeans wish to attain political unity. If they establish that political unity is not their objective then they need to question the legitimacy of the European Central Bank and its currency, the Euro Dollar. Without political unity the Euro Dollar is an instrument of destruction inflicting severe harm upon nearly all member nations of the Eurozone that have adopted its use. That is not to say that the Euro is not essential for political unity, and can become the primary strength of the European Union. Too often I read the complaint from Europeans, both economists and laymen alike, that only the United States can pursue the recommended fiscal policies of Keynesians because only the USA Dollar is desired by all of the world’s peoples. What the member nations of the European Union, which have not yet adopted the Euro Dollar, need to understand is that when more people are compelled to use the Euro the stronger it becomes in its ability to displace the USA Dollar as the world’s premier currency. But compelling Europeans to adopt the Euro without having first uniting them as a single people within a single nation is a recipe for disaster.
Europeans need to recognize the validity of Jean Claude Junker’s admonishment: that population growth and shifting economic wealth will cause Europe to dwindle into insignificance upon the world’s stage if political unity is not achieved. The appropriate debate now is for how to construct a federal government for either the Federal Republic of Europe or the Central European Republic. While watching the episode “Which way is Europe heading?” from the Conflict Zone I thought how foolish it was to have representatives from nations that have adopted the Euro currency argue with a representative from a country that has not adopted its use. I have tried to explain several times on my website for Finance Rheology that the value of any fiat currency sprouts solely from the compulsion to use it. Europeans ought establish priorities in their quest to secure for themselves, and their posterity, an enduring significance amongst the nations of the world. How can it be that Europeans ignore the glaring fact that all the peoples of the world eagerly lend to the people of United States a trillion dollars each year? How can it be that Europeans fail to recognize that Americans enjoy their privilege of world supremacy, not because of the size of their military, but because of the size of the balance sheet of their treasury. The Euro Dollar is the proper response of the Europeans toward their concern of drifting toward insignificance as the world evolves. But without proper implementation the Euro currency can do more harm to the Europeans that it can help them avoid obscurity in the world. Understanding this means that the Europeans must focus their debate on how to construct a single European nation from the many nations within Europe.
We need to proceed methodically. Either choose to merge in several steps starting as the Central European Republic or proceed in a single step to merge as the Federal Republic of Europe. Nobody ought focus now on the petty differences of cultural policies that each European nation may perceive that they have today. Those issues are to be resolved through the Principle of Subsidiarity. What is needed now is agreement upon the need to subsume all national identities beneath the single identity of European. You are to become no longer German, no longer Dutch, no longer French, etc., etc. You are to become European with a residency, not a citizenship, within a regional province of Europe; as much as I am a citizen of the United States of America and only a resident of Pennsylvania. I am not a citizen of Pennsylvania. Europeans need first to agree upon this and decide what authority the regional provinces are willing to surrender to the federal government of the united Europeans. Upon its initial creation the thirteen British colonies surrendered very little authority to the federal government of the United States. This has changed over time such that much greater authority is now the prerogative of the federal government. But the impetus for this was a situation peculiar to the United States: its initial division into slave-holding and nonslave-holding states and the resultant civil war. Europeans can avoid all of this.