Tuesday, 6 December 2011

My 2 Cents about the future of EU

Nowadays news are full of reports on the financial difficulties that European countries are facing: rising interest rates, high rates of unemployment, political turmoil, economic malaise, but once you look for the real source of these systemic risks, you realise that this is window-dressing for something bigger. The fact that the European Union is under a process of fiscal and budgetary unification followed by the political unification and it is using the financial and economic news-bombs as excuses for the loss of sovereignty of some less fortunate EU members.

Europe in 2020

Most likely, the new Europe will centre around the former euro-core countries: Germany, France and Benelux (Belgium, the Netherlands and Luxembourg). These states will serve as policy and political centres for the rest of the pack. The budgetary, fiscal, economical policies and even monetary policies will be formed and dictated taking first into account the interest of the core-Euro countries and the the interest of the other countries. This will come in exchange of monetary and economic "protection" against further crises and of economic stimulus plans for the less developed counterparts. The "edge" will nevertheless be kept among the high export countries (Germany, France and the Netherlands) and the other EU countries will be import markets.

Interesting enough is what will happen in this case to the rather independent Great Britain and to the economically solid EU Nordic countries (Sweden, Finland and Denmark). The way things are going right now indicate towards a separation from the European Union, or at least, an increase in the sovereignty of their decision making. For instance they may keep some of the rights and obligations of regular EU countries, but may not accept a common European budgetary and fiscal policy. The first signs of this divergence is in the reluctance of English officials of any further concessions towards the European Union, and in case of a double dip recession in the Great Britain, they will have to make a tough choice between independence or EU protection. As far as I know British people and politicians they will choose independence.

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