[PEN-L] is the EU on a path towards monetary disintegration?

[Charles Brown]

What do no votes mean for the union?

Voters have clearly rejected closer union and Europe will start to
unravel, says Larry Elliott

^^
CB: What Europe needs is an international union organized by the working
class of Europe ,not the bourgeoisie, based on Proletarian Internationalism
in a 5th International. A Union of Soviet Socialist Republics of Europe, not
a United States of Europe.

Workers of all countries , unite !

Re: [PEN-L] is the EU on a path towards monetary disintegration?

[Doug Henwood]

As I recall, there's no provision in the treaty on monetary union for
reversing it - it's supposed to be "irrevocable." Could be an
interesting legal and political adventure.

Doug

Re: [PEN-L] is the EU on a path towards monetary disintegration?

[Bill Lear]

On Friday, June 3, 2005 at 11:44:28 (-0400) Doug Henwood writes:
>As I recall, there's no provision in the treaty on monetary union for
>reversing it - it's supposed to be "irrevocable." ...

When, in the course of human events, it becomes necessary for one
people to dissolve the political bonds which have connected them with
another ...


Bill

Re: [PEN-L] is the EU on a path towards monetary disintegration?

[Jim Devine]

in international finance, the really dramatic depreciations occur when
exchange rates are rigid and are defended by the Central Banks "to the
death."

whether or not the various currencies that make up the euro end up
breaking up, however, depends on how close their values are to
fundamentals and how easy it is for the various economies to adjust to
the exchange rates.

On 6/3/05, Doug Henwood wrote:
> As I recall, there's no provision in the treaty on monetary union for
> reversing it - it's supposed to be "irrevocable." Could be an
> interesting legal and political adventure.

-- 
Jim Devine
"Segui il tuo corso, e lascia dir le genti." (Go your own way
and let people talk.) -- Karl M., paraphrasing Dante A.

Re: [PEN-L] is the EU on a path towards monetary disintegration?

[Michael Perelman]

Has anybody looked at the savings that come from the decline in uncertainty 
regarding the relative values of
currencies within the EU, such as the elimination of the need to hedge against 
currency shifts?  I assume
that it would be small for some countries where the central banks tightness has 
stifled growth.
 --
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu

Re: [PEN-L] is the EU on a path towards monetary disintegration?

[Doug Henwood]

Jim Devine wrote:


whether or not the various currencies that make up the euro end up
breaking up, however, depends on how close their values are to
fundamentals


There are no constituent currencies anymore - they ceased to exist,
allegedly forever.

We're probably going to see some "divergence" plays in the government
bond markets (we're already seeing hints of them), the opposite of
the pre-euro convergence plays.

Doug

Re: [PEN-L] is the EU on a path towards monetary disintegration?

[Chris Burford]

Larry Elliott comes from a long standing critical point of view about
the European Union which differs from mine. In my opinion like Marx
and Engels I believe in looking at the balance of power between the
major states and making judgements about which sides are more
progressive.

That leads to some uncomfortable and apparently unprincipled
tergiversations but I think there is a principled materialist basis
for it.

On the other hand I really do not think Larry Elliott shows any signs
of signalling even in code a more profound marxist inspired critique.
Yet the contradictions are getting more complex, as my previous post
also argued. My hunch is that there will be cross cutting tendencies
both to integrate more and to break up.

But Elliott does not seem to refer to certain general trends of
capitalism that should be recognisable to a marxist, if not to a
radical moralist: the tendency for capital once it has gone beyond the
size of the nation state, to want increasingly "free trade" and
essentially global trade to be able to maximise its control of
markets, and ability to choose out of a range of possibilities to
increase exploitation.

Secondly the tendency of capital to uneven accumulation. That is so
Marx argues an *absolute* law. Without more intricate political
measures than the EU has at present to smooth out these tendencies,
there will be considerable insecurity among the population.

The main problem for the European Economy is that it has had to stay
loyal to monetarist ideas of the 90's when Bush's USA has thrown this
to the winds, and because it does not issue world money like the
dollar, although it certainly gets some substantial benefit from its
super-imperialist position, this is significantly less so than the
USA. Therefore its currency rises in value while the USA can maintain
economic turnover on massive borrowings a little longer, while Europe
stagnates.

In the last five years I think Europe has been useful as something of
an alternative pole to the USA. Imagine if the USA had been able to
charge into Iraq even faster than it did, or if it could threaten Iran
or North Korea with nuclear weapons.

But the main reason now that the US is getting tangled in a web of
power calculations is the rising economic power of Asia not the
existence of Europe.

Europe may evolve as a wider common market, even involving not just
Turkey but say Syria Lebanon, Israel and Egypt, but with measures for
close financial and industrial planning in core areas of western
Europe who feel comfortable with this.

Besides, when thinking of money these days, it is necessary to have a
relativist view. There are many forms of money in circulation as we
move towards greater integration not just on a European but on a
global level. The largest finance capitalist countries essentially
calculate with the aid of computer models on some sort of world money
which is a resultant of the relative strengths of existing moneys.
What matters more is about local and regional measures for
coordinating investment, perhaps in public private partnerships.

No, I would not be triumphalist about Europe unravelling, nor wish it
to unravel. I think the bigger contradiction is on a larger scale -
that of the multitude against the imperium of finance capital in all
its forms.

Chris Burford

London


- Original Message -
From: "Charles Brown" <[EMAIL PROTECTED]>
To: 
Sent: Friday, June 03, 2005 2:53 PM
Subject: [PEN-L] is the EU on a path towards monetary disintegration?



<http://www.guardian.co.uk/Columnists/Column/0,5673,1498334,00.html>

What do no votes mean for the union?

Voters have clearly rejected closer union and Europe will start to
unravel, says Larry Elliott

^^
CB: What Europe needs is an international union organized by the
working
class of Europe ,not the bourgeoisie, based on Proletarian
Internationalism
in a 5th International. A Union of Soviet Socialist Republics of
Europe, not
a United States of Europe.

Workers of all countries , unite !

[PEN-L] is the EU on a path towards monetary disintegration? [Dr. Doom]

[Autoplectic]

What do no votes mean for the union?

Voters have clearly rejected closer union and Europe will start to
unravel, says Larry Elliott

Larry Elliott
Friday June 3, 2005
Guardian

It was business as usual for the European Central Bank yesterday. Just
as it has at every meeting for the past 24 months, it left interest
rates on hold. The no votes in France and the Netherlands were brushed
aside. The public may have spoken, but what does the public know?

Rather more than the policy elite, it seems. In Britain we've been
here before. In the 1950s, the great and the good - the people who
really knew what was in the best interests of the lower orders -
decided to bulldoze the slums and decant people into tower blocks. In
1968, there was a gas explosion at one of the tower blocks, Ronan
Point, which collapsed like a house of cards. It was not the end for
tower blocks, but it was never quite the same again.

This week has been Europe's Ronan Point moment. France and the
Netherlands were given the chance to pass judgment not just on the
next phase of European integration but on the previous phases. The
message was that voters don't think the process of ever-closer union
is working. In particular, they think monetary union is a dog.

Naturally, that is not a message policymakers want to hear. Voters
just don't get it, they say. Ciao Koch Weser, Germany's deputy finance
minister, said yesterday that any discussion of the euro being a
burden was "crazy". The single currency had been a success which
helped boost economic growth.

Sadly for Mr Koch Weser, his analysis does not appear to be playing
well with Germany's 5 million unemployed, or with the Dutch voters who
blamed the euro for economic stagnation. The ECB yesterday cut its
growth forecast for the eurozone this year and predicted another year
of economic underperformance.

The problem for Mr Koch Weser is that Europe's voters do get it; they
are starting to realise that monetary union was founded on dumb
economics and foisted upon the countries of Europe for political
reasons. The idea that a one-size-fits-all monetary policy would work
across a continent as diverse as Europe was always flawed. Europe is
not America. It is divided by economics, geography, history and
culture, and lacks all the ingredients that might compensate for these
basic impediments - a single language, labour market mobility, a
unified system of taxation and spending that can redistribute
resources to poorer regions.

Europe's policymakers understood that. They knew very well that there
has never been an example of a monetary union that has survived
without political union. That's why the constitution was important. It
was a further step on the road to the integration deemed necessary to
make political union a reality, but the votes in France and the
Netherlands have stopped that process in its tracks and, as a result,
left the entire "project" in limbo.

The reality is that either monetary union is a staging post to
political union or that a rejection of the next phase of integration
starts a long process of unravelling.

Already, there is talk of which country will be the first to announce
it has had quite enough of monetary union. Will it be Italy, already
in recession and unable - as it did in the past - to devalue its way
out of trouble? Will it be Germany, where the Bundesbank and finance
ministry had to issue ferocious denials this week that they have been
discussing the failure of the euro? Will it be France or the
Netherlands? Who knows? What is certain is that the ostrich-like
behaviour of Europe's policy elite hastens the fragmentation process.
A success story? More like denial on a grand scale.

Re: [PEN-L] is the EU on a path towards monetary disintegration? [redux]

[Autoplectic]

The week the monster turned on its creators

Eurocrats had a vision of integration that would never work. But now
there is a chance to rewrite the script

Larry Elliott
Monday June 6, 2005
Guardian

The dream is over. For the past 17 years, large parts of the left and
centre-left in Britain have believed in the vision presented by
Jacques Delors at the TUC conference back in 1988. Fed up with
Thatcherism, Delors said to the assembled brothers and sisters: do you
want an alternative to mass unemployment and attacks on the working
class? Then sign up to my vision of Europe.

What might be called the "sensible left" duly signed up. It liked the
talk of solidarity and internationalism, but there was more to it than
that. The Delors vision also appealed to some of the less attractive
traits of the left - the worship of power, the notion that there is
always a big solution to the smallest of problems, and the feeling,
identified by Orwell long ago, that there is something unseemly about
loving your own country.

Ever since, it has been urging that Britain fulfil its destiny and
whole-heartedly back the "project". It has berated Gordon Brown for
allowing the Treasury to put economic obstacles in the way of
political engagement. It has turned a blind eye to sky-high levels of
unemployment, seen simply as transitional costs on the way to the
promised land. It has contented itself with the comforting thought
that euro-scepticism, fanned by the Murdoch press, is something
peculiar to Britain.

The events of the past week have shattered this cosy little fantasy.
In France and the Netherlands, opposition to the constitution was
strongest among the poor, the young and the excluded. Even with
Europe's political class scuttling around looking for scapegoats,
nobody had the chutzpah to claim that it was the Sun - by some kind of
cross-Channel infection - "wot lost it".

The vote in France could just about have been shrugged off as the last
roar of a nation of luddites against the inevitability of
globalisation. But the Dutch? For these model Europeans to vote by
almost 2-1 against the constitution was a hammer blow. The Netherlands
is one of the countries the British left has always admired: liberal,
tolerant, prosperous, generous. And now in open revolt against its
political masters.

The response from Brussels and the European capitals last week was to
pretend that nothing had really changed. It was all a bit reminiscent
of Eric Honecker hailing the brave socialist dawn as the Trabbies
spluttered their way towards the iron curtain in the last days of East
Germany.

Some big lessons now need to be learned. The first is to understand
how it was that in France and the Netherlands last week, and in Sweden
in 2003, a big initial lead for the yes camp was turned into a
resounding no vote by polling day. The reason is that those making the
case for the euro and ever-closer union do so with the arguments and
language of management consultancy. They talk of "the project" making
markets more efficient. The "no" camp does not talk of "projects". It
taps into the things that matter to people: the urge for security,
identity, a sense of belonging. Like it or not, people love their own
country more than they love the abstract notion of the European Union.

A second lesson is that unless the prime minister is a secret
masochist, there will be no referendum on the constitution in Britain.
If the government were stupid enough to hold one, it would be lost by
a landslide dwarfing that in the Netherlands. The odds on Britain
joining the euro are longer than the odds on monetary union
collapsing.

The sensible left should stop whingeing about that and admit that
Brown did us all an enormous favour when he came up with the
Treasury's five economic tests. His argument has been vindicated by
the anti-euro sentiment evident in the Netherlands last week. The
chancellor said that joining the single currency when the economics
were not right would foster a massive backlash when things went wrong,
as they assuredly would. If voters in the loyally pro-European
Netherlands have turned against the single currency and the European
Central Bank, just imagine what it would be like here if the economic
brown stuff hit the fan.

Thirdly, the left has to wake up to the fundamental reason for the
unpopularity of Europe. It is that the Delors model was perhaps
appropriate for the Europe of the 1940s but not the Europe of the 21st
century. Europe's social model, which was rightly envied from this
side of the Channel in the 1980s, was only affordable if there was
strong enough growth to generate the tax revenues to pay for the
welfare state. Delors, with his rigid, inflexible command and control
model, ensured that unemployment would be high, growth low and the
costs of the social model unaffordable.

Europe today is only socialist to the extent that the Soviet Union in
the last years of Bre

Re: [PEN-L] is the EU on a path towards monetary disintegration? [Dr. Doom]

[Shane Mage]

I will take seriously Mr. Elliott's prediction that the Euro is on
course to be replaced by a dozen or so national currencies
when he serves me an omelette that he himself has unscrambled.

Shane Mage

"Thunderbolt steers all things...It consents and does not
consent to be called Zeus."

Herakleitos of Ephesos

Re: [PEN-L] is the EU on a path towards monetary disintegration? [Dr. Doom]

[Massimo Portolani]

The good thing of all this (wishful) talks and writings is that
hopefully the Euro will lose some value to the dollar.
Once was 0,80 now it is 1,25 and most of the problems of EU economies
lay into this exchange rate,
that seems to me due more to the weakness of the dollar (and US
economy) rather than to any
risk of EU disintegration.

Massimo Portolani



Already, there is talk of which country will be the first to announce
it has had quite enough of monetary union. Will it be Italy, already
in recession and unable - as it did in the past - to devalue its way
out of trouble? Will it be Germany, where the Bundesbank and finance
ministry had to issue ferocious denials this week that they have been
discussing the failure of the euro? Will it be France or the
Netherlands? Who knows? What is certain is that the ostrich-like
behaviour of Europe's policy elite hastens the fragmentation process.
A success story? More like denial on a grand scale.

Re: [PEN-L] is the EU on a path towards monetary disintegration? [Dr. Doom]

[Daniel Davies]

Shane is entirely right on this one; I was a junior tick on one of the more
than twenty Bank of England working groups on "preparations for EMU" and we
were a central bank that knew full well that we weren't going to be in it
(apologies to the Governor & Company if I am breaking an official secret by
revealing this).  The practical issues are daunting; everything from
rounding conventions to reinforcing the floors of bank branches (because of
the weight of extra currency at changeover) is covered.  It took five years
to carry out the practicalities to get in; it couldn't be reversed in less
than four (the difference being because about 20% of the time was taken up
in ludicrous standardisation issues ie: the euro coins are made of a special
funky alloy because lots of Swedes are allergic to cupronickel).

dd

-Original Message-
From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Shane Mage
Sent: 03 June 2005 05:35
To: PEN-L@SUS.CSUCHICO.EDU
Subject: Re: is the EU on a path towards monetary disintegration? [Dr.
Doom]


I will take seriously Mr. Elliott's prediction that the Euro is on
course to be replaced by a dozen or so national currencies
when he serves me an omelette that he himself has unscrambled.

Shane Mage

"Thunderbolt steers all things...It consents and does not
consent to be called Zeus."

Herakleitos of Ephesos