Happy New Year – from Angela Merkel

Angela Merkel, leader of Germany wishes all Germany a Happy New Year in this profound message that says why a United Europe is so important.

Yes, Europe is slow. It’s arduous. It has to suffer deep incisions, such as the departure of a member state. And – yes – Europe should concentrate on what it can really do better than the nation-state.

But no – we Germans should never let ourselves pretend that a happy future could ever lie in going it alone as a nation.

Read it here.

The UK and the EU

The Uk is thinking about leaving the EU. Campaigns run to see if Britain would be better inside or outside the EY seem to address the advantages for Britain. The most significant advantage for the UK is that without the UK influencing the EU, the largest market in the world may not work as well as it does with the UK.

The EU needs the UK. Without its “Westernising” influence, it’s connection with the USA and the English language, it reduces the EU. Being a part of it, and influencing it, the UK of course benefits but if the UK left the EU, although it may experience certain advantages of independence the greatest loss to the world would be that of an integrated and successful EU.

Italian Left Lurch

Twenty five percent of the vote in Italy went to a party that want an exit from the EU and a return of the Lira. The Monetary Madness continues apace. When a country could inflate away its debts and then revalue again after it had cleared its path back to being an attractive place to spread into some of ones’ investment risks. As part of a common currency they can not con each other in this way – they have to borrow to cover the shortfalls that stem from corruption in the political class. Italy has rejected austerity but the 25% is not a protest vote. It is a game changer. It is a kick in the face of the EU. It may be fatal.

However, if the PIGS were to leave the EU, they could form their own trading bloc – one hopes they call it SPIG rather than PIGS or GIPS or the less pronounceable IGPS – they would then be able to inflate their way out of their primary problem, together.  And then they could then rejoin the EU as a block and create economic treaty zones, consider an example set of economic zones:

  • Central EU (Germany, France, Belgium, Luxembourg),
  • South EU (SPIG),
  • Eastern EU (on or adjoining the Eastern border),
  • Northern EU (Scandinavia, Denmark, Holland, UK)

Each part of the EU has an exchange rate balancer, so if they want to devalue, they can by negotiating revaluation elsewhere.  The four zones have floating exchange rate mechanisms with each other relative to capital value.  So any shift of liquidity between the zones has its economic effect.

Monetary conditions are created by a mechanism like the trading of bonds (not cash) between the Super Governments – here are a group of talented long range analysts can set the degree of valuation (this model may in effect be five currencies), the democratically preferred flavour of financial control and regulation levels that at least disallow fantastic risks with people’s pensions that maybe once paid off but now wear away at value.  Perhaps Super Governments have no other function.

Each bloc contributes to a common currency pool and sells bonds to it to maintain an economic state of relativity.  However something like that may or may not work it should be understood that the awareness of very different political system is required.

Europe without a central federal body probably leads to too many demands for regulation being imposed in the wrong markets as well as the more significant, in body count at least, the absence of regulations that would have prevented disasters evaporating vast tracts of wealth in an instant.  Such an ephemeral quality wealth can turn out to be. Protecting it irrationally may backfire.

The central purpose is to introduce long range capital increases where they are needed. The absence of any Government led stimulus or infrastructure corrections that long range planning needs to consider in its calculation of growth.  You can squeeze an orange once, but a healthy tree means more future oranges and you better have the infrastructure to squeeze them.    

“a far less great Britain struggling with a mere percentage of its economy left yet more people to employ and an inability of the state to collect fair taxes”

The apparent Tory creed of demanding tax fairness, while protecting the tax avoiders who support them, will seem shallow as the record shows a far less great Britain struggling with a mere percentage of its economy left yet more people to employ and an inability of the state to collect fair taxes means it stubbornly refuses to finance progress. Italy may serve to push the EU into progress and reform the lumbering beast.

Union of Europe – prediction

On October 26 Disturbing Trends predicted Europe is to become more of a financial union – except for the UK – the only state to opt out of this mutual arrangement.

On one hand we have 27 countries agreeing that there is a solution in unity, and on the other protecting London’s financial influence and therefore effectiveness – a crumbling cornerstone – a shambles of belief in a system that has massively artificially inflated the economy without deflating the currency because electronics and computer muscle provide a sea changing wealth of opportunities to create capital, that is financial obligations committed with regard to imbalances in the ratio of risk vs return when things went wrong.

A Unification of the rights and obligations of all European citizens is commended by all but the British. Mutualising the benefits of “state capital” to the benefit of Europe would require considerable contribution of raw capital power that London City is and unlike other major sponsor economies in the EU – Great Britain is reluctant to play ball. Being singled out as the new Switzerland is one thing.

Europe becoming what it will become is probably a better destiny for the entire zone with the UK integrated into it, but is what Cameron has done a bad thing for Great Britain? In the final analysis that is not what matters.

References:

http://www.guardian.co.uk/commentisfree/2011/dec/09/cameron-no-bad-britain-europe
http://disturbingtrends.org/union-of-europe/

Union of Europe

The forbidden measure that the European Union can take to immediately solve its problems are to unite as the Union of Europe.

By simply combining into one huge fiscal mass of commonly budgeted economies it can trump the “we will help, but we are not involved” UK Government. The Tory Revolt against the EU and a recent Guardian survey that reveals a demand by the UK electorate (or at least a large majority of those surveyed) a perception that separation from the EU is wanted. Is it the best things for the EU? Having another large economy on board to still the boat is the best thing for a united Europe but the perception seems to be that it would not be a good move in the current disunited state of Europe.

If Europe were to federalise with the UK a part of it, it could solve its debt emergencies. Why not have equalised pension opportunities across the continent? Why not follow the very successful model of unity that are enclosed Empires like China and the USA? It would seem the natural order of making it right for a larger population.

What is the population of Europe? 731 million? What if all of them worked together toward a common goal of the betterment of all Europe? Would this not have positive benefits for every economy if everyone was considered equal?

Equal? People in each country are not equal to each other. There are winners and losers. There are a percentage of winners and many who have less financial ability than the average level.

An obvious argument of the Right is to flatten taxes so that every pound is taxed equally rather the weight of taxes increasing as need subsides. If this were applied in a rigorous manner so that every person actually paid 30% of their income to the common revenue would the tax take be greater than it would be if millionaires avoid paying taxes?

The phrase “we are all in this together” is quite meaningless. If it were real, then solutions to Europe’s problems would be more obvious.