Blog 2023 Malcolm Blair-Robinson

The Euro Zone finance Ministers are now on their way home. There was no agreement to increase the size of the bail out fund nor to introduce a Euro zone bond. Germany opposed both. More important, if you want to look beneath the surface, is the number of German voters who want to quit the Euro, or for Germany to effectively take control of it.

Clearly this currency cannot go on as it is. It will do so for the moment but there are very big troubles ahead. This is because although policians speak in robust terms of the solidity of the Euro and their determination to defend it at all costs, they no longer have the political consensus behind them to make the changes which would make that survival possible. The predictions in the previous post may be coming true already.

NATO Plans

The latest Wikileaks contain an interesting plan for the defence of Poland and the Baltic states from a Russian attack. On the one hand this is just military  preparedness for any eventuality. On the other it is stoking tension to no purpose.

Russian military doctrine, though nervous of NATO encirclement, no longer sees a NATO attack as likely or realistic and the proposed modernisation of Russia’s somewhat creaky armed forces, recognises this. Above all it knows that  Russian attack on Western Europe to create some huge Russian Empire in the west, according to the earliest and wildest dreams of the early Soviet revolutionaries, is as daft as Britain setting out to reconquer Africa.

Unfortunately the U.S. military has always played a disproportionate role in the direction of the United States, upon whose success the very foundation of the country rests. Thus instead of a wind down after the end of the cold war, there was a cranking up, given fuel by 9/11. British foreign policy needs now to exercise a more restraining hand on the Pentagon. We have to go back to our Viet Nam posture. Do it if you want but we are not with you. Thus there should be no British division in this rash Nato plan. France has already said no.

No wonder the Russians have a network of spies. They do not trust the west and with good cause. Yet it is not Western Europe which is the problem It is the U.S..  President Obama has done  quite a bit to ease relations with Russia and build bridges. He needs to do more of the same. Meanwhile we all need to remind ourselves of the difference between WWII and WWI. Fighting Hitler and the Nazis was justified and necessary for the preservation of freedom and decency. It was a fight against one of the most bestial, cruel and tyrannical regimes ever to blacken the pages of history.

WWI was not like that at all. There was no great ideological divide. There were rivalries and jealousies and over powerful militaries. There was much more to be lost by fighting than by not. Civilisation, or European civilisation, was not in fact under threat. It was an entirely useless war for no honourable purpose, whose only lasting outcome was carnage of young lives on an unimagined scale and the creation of the conditions which made the second world war, not only certain but necessary, with even greater carnage across the globe.

There is nothing meaningful to fight for from one end of Europe to the other now and we should use all our powers of planning to make use of the peace which past suffering has bequeathed us. It is time for the U.S. to shrink the Pentagon establishment by a quantum and concentrate on the problems in its own backyard. These are considerable and growing.

Euro Zone Bond

This is the latest idea for bringing a more uniform approach to sovereign debt, supported by some countries but opposed by Germany. So that is that. Even more so, if non- euro members of the E.U. were to be asked to guarantee such a bond. There is absolutely no chance of the U.K. agreeing.

For the moment the pressure has eased and Euro finance ministers are cautiously optimistic. Stock markets have recovered from their fright of two weeks back when Ireland was on the brink. But for how long? The problems remain and remain the same. The Euro has a central bank, but no unified government. It has no common economic policy; only various rules, which are regularly violated by its members when the fancy takes them.

There are two options ahead, neither of which is accepted by those in the zone. Without a unified system of economic management the Euro will eventually conk out. The other is that such a system is put in place and the Euro is secured. It has to be either the one or the other. Well not quite.

There is a third option. Nothing is agreed but, bit by bit, everybody has to go with whatever Germany wants, because it is the paymaster and it is calling the tune. The Euro has always been Germany’s currency shared, but now it will begin to claw back control. Indeed it has already begun to do so. Thus the Euro will have a central government and a unified economic policy but it will be in Berlin.

Those who gain advantage from this will remain. These will include the smaller countries and the old communist states of the east. The others, including the Mediterraneans like Spain, Greece,  Italy and Portugal will leave. So may Ireland. The interesting one is France. If she stays there will be a Franco German dominance. If she goes, there will be German dominance on its own.