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The cold shower for the sympathizers of a single Euro-currency started after reveal of the figures that showed that 9 European countries not included in the eurozone showed the best economic results in all respects: economic growth, debt, employment, inflation, etc. They operated much better compared to the 19 countries that use the single euro currency. The rejection of their own currency and the refusal, as a result, of their own monetary policy have brought more problems than advantages to most of the EU countries.
The fact that the introduction of a single euro currency without political integration, without a single budget, without a single ministry of finance and a unified tax policy, is an adventure, had been predicted by many economists, and firstly the Nobel laureate M. Friedman. But politicians did not listen to the opinion of economists and announced in 1999, when the euro was introduced, that a monetary union should naturally lead to a political union. However, all attempts of the European bureaucracy for 17 years to turn the economic union into a political one have not succeeded. Nations do not want to part with their sovereignty. The problem was aggravated by the fact that the EU itself began to expand unjustifiably, as well as the fact that a number of countries did not wish to part with their currency. Britain generally decided to withdraw from the EU, believing that its problems are already unresolvable.
At present, the situation with the euro has reached its climax and requires the resolution within 1-2 years. Countries such as Greece, Italy, Portugal, Spain, Ireland, are mired in sovereign and bank debts and can no longer solve their problems independently without political assistance from the major central powers. But such assistance requires a change in the character of the EU and the creation of a political union. The situation is paradoxical: all countries have become hostages of the euro, which does not unite the EU, but destroys it.
As a matter of fact now the EU has only two ways:
- either cancel the euro and return to its national currencies;
- or create a federation of the United States of Europe.
If you do not do both, and keep the status quo, then soon chaos will begin in Europe, and it means the collapse of the financial system, massive bankruptcies and sovereign defaults.
The problem, however, is that the rejection of the euro is an extraordinarily costly step; we are talking about thousands billions euros of losses. And the increased euroscepticism and nationalism in almost all EU countries in recent years make the task of creating a political union virtually unrealizable. Convincing all EU countries to abandon their parliaments and fully transfer their fate to the European Parliament, the European Commission and the ECB will become impossible.
What is the fate of the European Union? There is no answer yet. Merkel at one time proposed the concept of a "Europe of two speeds", hinting that numerous "poor relatives" would have to wait in the front room of a true EU. But the concept caused an immediate protest from those who have every reason to believe that they will be appointed by these poor relatives.
All eyes are now on Germany and France - what will the two most important EU countries say? Today the fate of the Union depends from their joint decision.
At the last EU summit, Macron and Merkel announced that they will make joint proposals on reforming the EU this fall. This is understandable: in September Merkel must first win the elections to the Bundestag, but there is no doubt about it yet. To win them, Merkel went on a hard choice for herself: she agreed to vote on the law of same-sex marriage legalization, but herself personally, as the true daughter of the pastor, voted "against".
I do not think that Merkel and Macron will be able to offer some radical solutions, most likely some kind of palliative. It's just not their nature. Both these politicians are cautious party officials, vivid representatives of the international establishment, a sort of patented nomenclature. Politicians of this kind are not able to offer revolutionary ideas and even more - to realize them. This requires the policies of another, charismatic kind. Their time has not come yet. At first the problem must mature to the point where a wave of popular indignation will bring out the modern Mussolini. And if the problem overrides, then there will be the modern Hitler.