Saturday, December 18, 2010

To form a more perfect Union

It can be a lonely business following European news in the American press. For instance, last Wednesday's alleged donnybrook in the German parliament, with opposition members calling the Chancellor an enemy of Europe and worse, got no mention at all in the Times or anywhere else that I could find. It has therefore been mildly heartening to find a number of op-ed pieces recently in that journal that address the problems of the Euro and the Union as if these somehow mattered, even at this distance.

Yesterday the Times reprinted a piece from Le Monde by Jacques Attali and Haris Pamboukis, calling for European treasury notes (a version of the Euro-bond idea Mme. Merkel has summarily dismissed?) that might absorb member states' sovereign debt up to 60% of their GDP--a bold expansion of the EU's financial regime. Today a rebuttal appeared, authored by the conservative Dutch professor of finance Harald Benink, calling for a version of the North/South division of the Eurozone (in this case, winners stay, losers like Greece, Portugal, and Ireland take a 10-year time-out, returning to their own currencies until they get their houses in order). Clearly the Eurozone and the EU itself are at some sort of crossroads, and will either adopt measures to effect more centralized control, or dissipate altogether. How to design those measures is a problem of compelling interest.

The Times might have shared with its readers (but didn't) another scenario (of the many), also drawn from the forum in yesterday's Monde. This piece, by Pierre Khalfa of ATTAC, the progressive activist organization, takes a different view, one Khalfa notes is likely to be ignored by the financial barons who run the EU. Khalfa observes that most solutions to the various debt crises involve private financial institutions making large profits as they lend money to Greece, Ireland, Portugal, and such, while insisting on destructive austerity measures to insure their investments. Why not, he argues, simply empower the ECB itself to lend directly to member states, 'monetizing,' as he says, their deficits, and requiring holders of speculative sovereign debt to take their well-deserved losses? (Perhaps someone better schooled in economics will tell me exactly which taboos Khalfa would have us violate here.) Under this regime, freed from the control of the commercial banks, the EU could reinvent itself as a guarantor of the social values European workers are in imminent danger of losing. Thus socialized, the EU and the EMU could fulfill a different historic mission, building a continental system based on social welfare, environmental justice, and economic cooperation, not competition. This was surely not what Delors and the 'founding fathers' at Maastricht had in mind--but given the ongoing financial crisis and the threatened shredding of the social fabric in so many EU countries, might it be worthwhile to imagine a radical change in direction?


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