‘Two-speed Europe’ is a fair solution

If the Eurozone countries agree to more centralization of economic power, they might quite easily be able to impose that on the whole EU at some stage in the near future, believes Philip Booth from the Institue of Economic Affairs.

­“Not surprisingly, the French and Germans in – slightly different ways – are trying to use this Euro-crisis as a means to centralize even more power within the EU institutions,” Booth told RT.

Non-eurozone EU countries, such as Britain, are posed in a very dangerous situation, where a refusal to sign a “fiscal union” treaty might create a two-speed Europe. But Booth believes that a multispeed European Union is, in many senses, a good outcome.

“I hope that a two-speed Europe is the outcome of this, and I hope that a more decentralized Europe is the outcome of this,” he said. “David Cameron has got to negotiate very hard, but from a position where he outside the main negotiations, to try to reclaim other powers that are currently centrally held by the EU.”

One of the powers Brussels could get is to impose austerity measures on countries it bails out. When individual governments did this to their own people, it was met with large-scale protests – but, Booth says, that there is no easy and centralized way out of this mess “that does not involve individual member governments facing up to their own problems.”

“The only real sanction that the Eurozone countries can impose on an offending member is some kind of fine, which actually makes the situation worse,” he explained. “That was rejected when the European Stability Pact was first drafted. It is up for discussion now, but it is no more obvious how this would work in the future.”

­‘First-class passengers in a Titanic’

­EU politicians are somewhat oblivious to the consequences of the current economic situation, believes economic analyst Michael Mross.

“They behave like first-class passengers in a Titanic that is already sinking,” he said. “And what politicians are saying right now, is, ‘OK, we have time. Everything is alright.’ But this ship is sinking and there is no solution to keep it alive.”

Mross is pessimistic on the prospects of finding a solution at the upcoming EU summit.

“I cannot hear anything which comes close to a solution. The only thing they are producing there in Brussels is catastrophe, a catastrophe of rescue efforts. And this will lead next week more or less to chaos, catastrophe – and collapse of the whole system, possibly.”

Leave a comment