On Mon, 2 Mar 1998, Doug Henwood wrote:
> Can countries as different
> as Spain and Germany be under the same monetary space with no possibility
> of national countercyclical fiscal or monetary policies? As a single euro
> financial market emerges, it's almost certain that U.S.-style trading and
> governance practices will come with it; see the IMF working paper at
> <http://www.imf.org/external/pubs/CAT/longres.cfm?sk=2233.0>. That could
> produce a US-style boom, but that's not what you mean, is it Dennis?
Nope. I'm afraid you're right -- I do have these fevered, hallucinatory
visions of a gigantic, Continental-sized Denmark, which taxes the rich and
funds the poor, but the dominant tendency is towards a United States of
Europe, ruled by an iron-fisted, intolerant, remilitarized Central
European elite of Teutonic bankers lording over their Visegrad serfs. That
said, the resistance to Maastricht monetarism in Europe is several hundred
million degrees hotter than the feeble, disorganized sparks of resistance
in America to the rule of Wall Street. Practically every Germany
university was rocked by humongous student strikes last December; the DGB,
the German version of the AFL-CIO, has been getting uppity recently, doing
protest demos and doing some active politicking (mostly to make the
Conservatives look bad, but there are some interesting new initiatives in
the field of reducing work-time and shifting to ecological production).
The disconnect between Europe's elites and their citizens is certainly as
great as the one between US elites and ordinary folk, it's just that those
socialist traditions are stronger and the workingclass more organized.
My own feeling is that the Euroelites do indeed want to become like
America, but that they'll fail miserably -- and thir failure may yet be
the Europroletariat's (potential) gain. The EU has too many powerfully
localized cultural traditions to have a US-style mobile jobs market; labor
is not mobile, not even in multi-cultural Switzerland, where each ethnic
group mostly keeps to its own domain. Nor is capital freely mobile,
either; pension funds are mostly administered nationally, banks are tied
in with industry through long-term shareholding structures, and most
European firms are neither dependent upon nor interested in playing the
stock market. This may change over time -- information technology will
probably make it possible to create a new kind of labor mobility, and
Germany may, in thirty years, develop something like a US-style credit
market to administer all the surplus-rents being extracted from Visegrad.
But it's not going to happen overnight. If the euro goes ahead, and I
think it will, an economy of 200 million people with living standards
superior to that of the average American will suddenly be confronted with
the curious paradox of being the world's first parliamentary-elected
superpower. Let's not bury the European Parliament, the Green Parties and
the other Left parties of the new multi-lingual and multi-cultural Europe
too quickly here.
-- Dennis
