Back in the 90’s, when the EU had ceased to be a mere trade agreement and had become a full-blown oligarchy that would eventually gobble up most of western and eastern Europe, my belief was that it had not only been a doomed concept, it had additionally been rushed into being far too quickly. Although, at that time, the governments of Europe were gleefully joining up, I said, “I give it twenty years, tops.”
It was an offhanded remark and, in truth, I was throwing a dart at a board regarding the time period, but twenty years did seem about right to me. And this shouldn’t have been a difficult prophecy. There were three major reasons for its validity.
“Good Fences Make Good Neighbors”
First off, the countries of Europe had perennially been at war with each other since long before gunpowder was invented. Europe is basically tribal and there is simply no way that the mindsets and objectives of, say, the British are going to be the same as, say, the French. If under the EU diktat, British fishermen were then told that they could no longer fish their own waters because Brussels had decided to give British territorial waters to the French so that they could fish, there would be greater cause for enmity between countries than ever before in history. (The quote above from Robert Frost was meant to pertain to individual property owners, but it applies equally to modern-day tribes.)
Sudden Change Breeds Resentment
Second, the rulings from Brussels came in a torrent after its formation. Nearly every country in Europe was shoehorned into fitting in with Union objectives. As a result, whilst some countries gained some advantages, all countries lost the basic freedom that comes with self-determination. Those who objected were threatened that they’d better behave. Those who suggested departing from the union were further threatened that that they’d be shut out of EU trade and destroyed economically.
Most people behave like sheep in most situations. That’s a basic trait of mankind, in any culture, in any age. However, sudden change (in either events or public opinion) often sparks revolt. Certainly King George of Britain discovered this when he chose to make up for a wartime monetary shortfall by imposing a stamp tax on his colonies in America. A decade later, the French people, when they heard (falsely) that Queen Marie Antoinette had replied to the shortage of bread amongst her minions, “Let them eat cake,” it served as a jolt to public opinion that would send many Frenchmen over the edge to the point of rebellion.
The elite in Brussels have grossly overplayed their hand, time and time again, by imposing sudden and dramatic change on the countries of Europe, whilst behaving arrogantly, bringing many of Europe’s people to the boiling point.
It Wasn’t the People that Joined the Union
To add to the tyranny, no country’s population voted in a majority to join the union. Half-hearted referenda were undertaken by some countries, but voter turnouts were often poor. In other countries, the referenda were not binding. In the end, each government went ahead with only minority support and plunged headlong into a union that would benefit them, the leaders, but would not serve their people well.
The EU was, from its inception, the antithesis of “ Government of the people, by the people, for the people.” It was, instead, an “Uber-Government of the political leaders, for the political leaders, by the political leaders.”
All the above contributed to the likelihood (at least in my view) of a short-lived EU.
But the easy task is to predict the event. The more difficult task is to predict an approximate date, so that investment decisions and major life decisions may be timed to avoid the individual becoming collateral damage. The important question therefore would then be, “What will be the trigger to begin the collapse?”
As the years passed and the cracks in the EU started to appear, the race was on as to whether the undoing would be as a result of the economic failure of the southern member-states, or by the social strains of immigration that Brussels forced onto its member-countries. In each case, it was predictable that the political leaders would defend the EU policies at all costs, although each would increasingly lose the support of constituents by doing so.
On the economic front, all eyes were on Greece and the other Mediterranean members, as they clung stubbornly to their collectivist economic policies. They would continue to bleed red ink at the expense of their more economically responsible northern brethren. Along the way, in order to appease her voters, German Chancellor Angela Markel stated firmly that the EU would not bail out the Italian banks; that they would have to rely on bail-ins (a measure that had been approved in 2014 for all EU countries). Then the news came that the German Deutsche Bank was on the ropes, threatening to cause a bloodbath for the German people. Germany, having lost billions of its money to the other EU countries, would need $14 billion to pay for Deutsche Bank’s mis-sold mortgage-backed securities and that would just be the beginning.
The German people had paid through the nose to support other EU members, but a line had been drawn in the sand as to future bail-outs, just before Germany realised its own crisis.
Suddenly, Mrs. Merkel has been caught between her obligation as Chancellor to the German people and her personal commitment to the EU. Her problem is exacerbated by the fact that she is up for re-election in 2017.
Ironically, in the race for the collapse of the EU, it may be that the trigger that begins the process is Germany, the country that was most responsible for its creation.
The comparison with the Titanic is an apt one. Like the Titanic, the EU was presented as a “super-state”, one that would be bigger and better than all the others in Europe. It was declared unsinkable. Yet, soon after it was launched, it hit an unexpected iceberg from which it could not recover.
Years from now, historians and economists will debate the identity of the EU iceberg. Some will say Brexit; others will say Deutsche Bank. Still others will cite events that we have not yet seen. However, for our purposes, it matters little. The dominoes have begun to fall and all of us that may be impacted by an EU collapse should make sure that we have all our own ducks in a row - to assure that we are impacted as minimally as possible.
Courtesy of Jeff Thomas via Sprott Money News
The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
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