The Berlin based DIW economic research organisation has predicted that the German economy will fall into recession – from its present meagre 0.6% growth to minus 0.1%. Germany already has 4.5 million unemployed (the real level is probably over 5.5 million) and this level will now certainly rise again. The budget deficit is out of control, breaching the EU Stability Pact rules for the second years running and with new tax measures is likely to do so again in 2004.
BUT THE GERMAN GOVERNMENT HAS NO CONTROL OVER ITS OWN ECONOMY. AS FAR AS THE EU IS CONCERNED THE GERMAN ECONOMY DOES NOT EXIST. THE GERMANS HAVE NO INTEREST RATES, NO CURRENCY AND NO CONTROL OVER THEIR DEFICIT. BUT THEY ARE THE BIGGEST CONTRIBUTORS TO THE EUROPEAN UNION BUDGET AND LIKE THE RUSSIANS WHO REFUSED TO PAY ANY MORE INTO THE ECONOMICALLY DISASTROUS SOVIET UNION SO THE GERMANS MAY BRING AN END TO THE EU BY REFUSING TO PAY INTO THE EU BUDGET, IN ORDER TO SAVE THEIR OWN ECONOMY.
WE MAY BE SEEING THE BEGINNING OF THE END FOR THE EURO AND THE EU SUPERSTATE.
A recent French Institute for International Relations report predicted that the EU’s share of international trade would fall from 22% today to 12% in 2050 and the population fall by 60 million. In the same period North America would roughly maintain its share of trade and increase its population by 170 million.
We know that continental European pensions are in permanent crisis. The French alone, in order to balance payments in and pensions out by 2040 would have to add six more years work to each worker, rasie contributions by 50% and slash pensions by one third. In Italy and Germany the situation is similar. The EU budget is in serious crisis and if the Italian Presidency’s proposal is adopted that there would be a massive Euro 50 billion to 70 billion extra spend on “infrastructure projects” (by funding through the European Investment Bank, again bypassing their own budget rules!) then the same old corporatist statist policies which produced the crisis would applied to “relieving” it!
This is exactly the kind of political economy practised by the corporatist Japanese over the last 20 years – their stock market index has collapsed from 40,000 to 9,000 and interest rates are so low no one would want to save.
All the ingredients of an economic collapse in the so called “European Union” are in place. As in the collapse of the Soviet Union the cause will be the economic failure of an impossible empire, the fiscal cost of supporting it and the ultimate refusal of the main paying state to meet its obligations.
CHEER UP!
THE END OF THIS LUDICROUS EU HAS BEGUN!
