The future of European stabilty?
Greetings to everyone here at SWC I've been fairly busy recently and haven't had much time to contribute.
This is question that I've had on my mind for sometime now after reading a number of articles on here and in FP as well as in a number of other sources. even though it may sound far-fetched and to many impossible, but given everything that has been happening on the continent is the future of European security stability in jeopardy? Especially since talk of a collapse of the EU and questions over the continued relevancy of NATO are increasingly being regarded as no longer impossible. To add on this topic Europe has fought two very bloody and geopolitically altering wars over the past 95+ plus years
Additionally, the financial and economic situation across Europe as a whole seems to be getting worse by the day. And the places where it appears particularly bad in countries that don't have a long tradition of being Democratic or having weak institutions or are thoroughly corrupt in many areas of society i.e. Greece or Italy.
For many the crisis appears to have no end in sight, and appears to be spreading not only are countries like Greece facing the possibility of default. But there has also been question's over Italy, Spain, Portugal, Hungary, and even France. The latter of which all could be impossible to bail out.
Likewise, the economic crisis in Europe has also exposed the limit's of European unity and cooperation ex. you have conservative politicians in Northern European nations like Germany and the Netherlands railing against " the lazy people of Southern Europe, saying that the German, French, or Dutch taxpayer is footing the the bill for Southern excesses and corruption". While Southern European and Mediterranean politicians and attitudes are bringing up such unwelcome memories like the German occupation of Greece during WWII and other things dealing with the fmr. the Nazi regime as if Germany owes these countries something for past treatment.
Also right-wing parties across the continent from Britain to Greece have seen their fortunes do pretty well in recent years. For instance, the FN in France is polling somewhere between 2nd and 3rd place under a new leader, Geert Wilders party has experienced a string of electoral successes and is still polling quite well, in Italy an anti-immigrant party and a Neo-Fascist sit in Silvio's Coalition government, and in Austria it looks like the Freedom party stands a chance of possibly forming a government in the next election. The success of these parties has been in large part due to wide ranging concerns in European societies, especially over the integration of immigrants mainly from the Middle East and Africa, further European integration, and the current financial crisis.
Furthermore, many have observed that the European social fabric is gradually buckling under the weight of the financial crisis. As there have been riots and other notable violent disturbances in a number of European cities ranging from Paris to Rome and most recently all over the UK and Athens this past summer. I was in London this past summer and the general impression I got from what happened was that the events there could have easily happened in any other European country say France, Spain, or Italy.
European governments seem to be splitting apart from each other on other issues also. For instance, France was strongly supportive of the intervention in Libya last Spring while Germany was the opposite and even abstained from it in a UN vote.
These are all just a few examples of why geopolitical stability n Europe is being question. However, what would things look like if the EU and NATO collapsed due to these pressures? Friedman's Stratfor said in a series of articles on this subject that things would go back the way things were a century ago in a way, with a large number of smaller European countries and three main Continental powers i.e. France, Germany, and Russia.
Even though this hasn't been discussed in much more detail other then the sources I mentioned, is the future of European security stability in jeopardy? Is the world going to have to worry about an unstable Europe again?
If there are any opinions I'd like to hear them.
European Integration and Security
Speaking as a Brit (and we have a distinctly ambivalent view of Europe) the problem with the European Project is that integration has been seen as:
- Too Fast
- Politically unaccountable
Too Fast: As Fuchs points out we are not yet 'European' with a common identity.
Unaccountable: In Britain we alternate between despair and cynicism with our political elite. We feel completely divorced from the European political institutions.
From a security perspective the economic turmoil is leading to political turmoil which historically has encouraged the rise of radical elements and movements.
RUSI has done an interesting paper on the possible security ramifications: RUSI: The shape of Europe to come
Arab Spring: European Autumn
A nice phrase used on the BBC's Newsnight yesterday as the parliaments in Greece and Italy voted in technocrats as their new, financial market credible prime ministers. The technocrats in both cases have only just become parliamentarians and have no electoral mandate.
There are numerous factors involved Kevin23 and it is easy to portray the situation as one where the key players are: the nationally elected politicians, the public, the international markets, bankers and multinational institutions in particular the IMF and EU.
For sometime now European democracy prided itself in elected politicians choosing the framework for a social market economy, principally at a national level and with some sleight of hand IMHO at an EU level. All appeared to work well until financial affairs upset the market economy, made worse as a recession looms closer and the public mutter why should I pay for this?
European democratic legitimacy appears to be increasingly challenged by the appeal to a technocrat at the helm and an institutional oligarchy. Sounds like the 'New International Order' to some.
It does seem odd after the 'Arab Spring'.
A riposte from a European, no a Brit!
AmericanPride,
You state two matters I will take issue with:
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1) The European states are still firmly loyal to the American global system...
2) Already Greece and Italy are required to impose stiff austerity packages and I'm sure we will see the continued destruction of national sovereignty by necessity.
Re: 1) There are many aspects to this 'system' and some of the changes are being made by the USA, notably a shift to the Pacific. Then there is the ex-UK Prime Minister John major making one of his rare forays into public policy:http://www.telegraph.co.uk/news/poli...ationship.html
And 2) There is a view that the technocrats in the national banks, international finance and EU institutions created the problem, so they are hardly the best choice to find a solution.
Nor should we overlook the apparently dominant role of Germany in the various "rescue" packages, the imagery of "bankers from Berlin" supervising national economies could set off a fuse in Greece and Italy.
I'm a banker, a technocrat trust me!
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The new Greek prime minister, Lucas Papademos, was the man who, as head of Greece’s central bank, fiddled the figures to enable Greece to get into the euro (against the rules) in the first place – before being rewarded with a senior post in the European Central Bank. He is no more democratically elected than Mario Monti, who will most likely be Italy’s new prime minister and had hurriedly to be made a “senator for life” to qualify him for the job. Monti’s main qualification is that, as a former senior EU Commissioner, he has long been a member of the Brussels elite himself.
Yes the author is not neutral in these matters, but IMHO this paragraph is factual:http://www.telegraph.co.uk/comment/c...democracy.html
Lack of ordnung, lack of linearity...
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Originally Posted by
Fuchs
They' have a between the devil and the deep blue sea. No answer is going to be nice.
Agreed. Risk is increasing for all of us in this interconnected world (..."the probability that an investment's actual return will be different than expected.")
In my previous post I posed some questions regarding how a Greek exit from the Euro and how that will impact the average Greek who uses banks to pay bills and save a bit of money. Retail banking is not the only sector that is impacted however. (Greece seems to have 20 main banks at the time of this post by the way - Citi and HSBC stand out).
The impacts upon Contract Law are interesting to think about.
Commercial Banking, Investment Banking, Central Banking (ECB and Bundesbank), and the IMF are also involved as bank runs are not limited to just the retail sector. We can see associated risk expressed as increased interest rates for sovereign debt, reduced interbank lending, and increased lending by central banks.
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“The market is pricing in an Italy event and assuming that Italy fails,” said Patrick Lemmens, a senior money manager who helps oversee about $13 billion, including Intesa Sanpaolo shares, at Robeco Groep in Rotterdam.
Household deposits in Italy still are expanding “at a moderate pace,” according to the Bank of Italy. That’s a contrast to withdrawals seen in Greece, Ireland and Portugal.
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Italy’s lenders started increasing their reliance on the ECB in July, when end-of-month borrowings from the central bank minus the amount deposited reached 58.8 billion euros, according to John Raymond, an analyst at CreditSights Inc. in London. Before that, net borrowings from the ECB ranged from 9 billion euros to 30 billion euros, he said.
The Economist Intelligence Unit has a timely, and interesting, read to consider: After Eurogeddon? Frequently Asked Questions About the Breakup of the Euro Zone.
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There are too many unknowns to make confident predictions about the trajectory of the crisis or the extent and speed of any break-up, should efforts to save the single currency fail. The following FAQ represents an exploration of alternative scenarios that diverge from our central forecast. We attach a 60% probability to this central “muddle through” scenario, not least because the catastrophic consequences of a break-up provide a strong incentive for policymakers to do whatever is necessary to save the euro. In contrast, we think there is a 35% chance of a break-up of the euro zone, in which the most likely scenario would be the exit from monetary union of the smaller so-called “periphery” economies, as well as both Italy and Spain. We assign a 5% probability to Greece leaving the euro zone on its own, without triggering other departures.