This past week various leaders of the European Union have been meeting to create a structure for preventing future economic crises.\u00a0 Also important was their effort to try and create a framework for how to deal with crises when they do unfold.<\/p>\n
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Most of us who were watching the proceedings of this meeting in Brussels were looking for an explicit, crystallized, concrete action plan for how to bolster the European Financial Stability Facility (EFSF).\u00a0 Instead, in typical EU fashion, we get a press release indicating that the EU countries that use the euro as their currency need to come up with concrete plans for how to solidify the EFSF.<\/p>\n
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This has to be considered a disappointment and is likely an indication of a lack of agreement internally at the EU proceedings.<\/p>\n
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Further evidence of the discord is that one of the items on the agenda was how to make the bailouts for Greece and Ireland less onerous for those nations.\u00a0 But what was decided was that the current course of action would be the future course of action.<\/p>\n
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One sign that something was accomplished was that in March EU members are going to be asked to sign on to a “competitiveness pact.”\u00a0 But, <shockingly> no details have been released.\u00a0 Instead, the details are supposed to be worked on over the next month before being put to the membership.<\/p>\n
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The microscope has been on the EU for most of the past year.\u00a0 This was the moment when they could take action to prevent future crises.\u00a0 But it seems that sans an immediate threat to the EU they are unable to act.\u00a0 Instead, what we have agreements to discuss things later.\u00a0 We have discussions tabled until later.\u00a0 We have indecisiveness.\u00a0 All of these things are sure signs of internal discord and fractures in the EU foundations.<\/p>\n
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You see, the EU is dominated by two countries: France and Germany.<\/p>\n
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The EU was France’s idea for how to create political and economic balance with the global hegemon, the United States, during the cold war era.\u00a0 This was especially important to the French at a point when its long-term rival Germany was emasculated post-World War II.\u00a0 The Germans still had manufacturing strength, but no political or military heft.\u00a0 Unfortunately for France things have changed.<\/p>\n
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Under the leadership of Chancellor Angela Merkel Germany is asserting itself, not just economically, but politically, too.\u00a0 Germany is the undisputed economic powerhouse in the EU.\u00a0 Now that there is true economic crisis in the EU, the Germans are able to leverage their economic strength into political gains.<\/p>\n
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These political gains are something that they have been wanting to do for decades.\u00a0 In short, the Germans are trading their ability to backstop the Eurozone economic crisis for a greater say so in the goings on of the EU.\u00a0 The problem is that the EU isn’t currently working for most of its membership.\u00a0 In fact, it predominately benefits Germany.<\/p>\n
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