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Wednesday, 22 April 2020

Should the EU split up?

The French president used a recent FT article to promote his idea for a political union, a.k.a. the Federal Republic of Europe. China, Russia, Turkey and USA would probably prefer ending the existing European Union. Northern European countries are getting more and more annoyed by southern demands for sharing European (read: southern) debt.

My blogs of January 2015 to 1 October 2019 were mostly in favour of a Federal Republic of Europe (my blogs). I'm less sure nowadays, probably due to (i) UK's departure (Brexit), (ii) the imminent departure of the German chancellor, and (iii) the self-inflicted economic ruin by southern European countries following the coronavirus pandemic.

The Great Moral Bankruptcy of China, Russia and USA is, however, an argument in favour of filling the vacuum caused by the moral departure of existing superpowers.

The economic models within Europe are quite different:
- (free) market models: the harsh Anglo-American (UK) and the moderate Rhineland model (eg, Germany, Netherlands);
- public sector and state models: the moderate Nordic model (Scandinavia) versus rigid "state capitalism" in Southern Europe (eg, France, Italy).

A political European union is likely to put its rubber stamp on a future European economic model. Without the UK, the Continental European balance seems in favour of a public sector and/or state model. That development might be disastrous for countries like Germany and The Netherlands, which are also net-contributors to the European Union.

In and of itself, the French president's proposal for a political European union makes (some) sense. A political union without France, and its view on pan-European nationalism, would be preferable. An expanded Federal Republic of Germany probably stand a better future chance against (opposing) countries like China, Russia, Turkey and USA.

In my 2015 blog, Mergers between countries, I proposed that The Netherlands should merge with Germany in case of a deteriorating European Union. From an economic perspective, The Netherlands would immediately rank as the #1 German state; Flanders would probably rank as #6. Obviously, the German language and its passport would be a serious Dutch issue.

Forbes-2011: "The problem is not that Europe has a common currency; the problem is not that Southern Europe has a serious spending problem; the problem is that Europe has a common currency AND that Southern Europe has a serious spending problem. [] Hence the Neuro, the Northern Euro, which is basically the Euro with the southern spendthrifts thrown out."

Games without frontiers (1980) by Peter Gabriel


Note: all markings (bolditalicunderlining) by LO unless stated otherwise.

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