We Must Save Europe from Its Leaders
On Tuesday this week the Finns Party made a strong non-confidence motion against the government. That gave me the opportunity to speak for 23 minutes live on the Finnish television about the euro crisis, the federalist agenda of the EU elite, and the government’s failure to stand up for justice and for the Finnish people.
These are the key points in popular language and our solution to the crisis.
Immoral Bailouts The European bailout plan is unacceptable. We are not against solidarity and helping those in need. It must however be done honestly and sincerely. The current symbiosis between the bankers and the political elite is not sincere. The bailouts are illegal. They break our jointly agreed rules. They question the integrity of our fundamental institutions.
The bailouts are immoral. The money goes primarily to well-off bankers, who will not admit and accept their mistakes, which they made while enriching themselves with highly profitable business during the last 10 years.
The bailouts are economically mad. The over-indebted states are unable to get back on track this way, especially in this state of the world economy. The only certainty is that the bailouts will create huge costs to other European states.
In the worst scenario, many others will fall, as in a giant domino effect, before the dust settles.
The Summit of Failure The European summit was a scam of massive proportions. First, it was a complete bluff. ”Europe will collapse in 10 days unless…” Unless what? Why did it not collapse, then, given that the summit solved nothing?
Maybe it will collapse, but that has nothing to do with the summit.
Second, the summit is making things worse. Trying to force everyone to cut spending at the same time risks aggravating the macroeconomic situation.
Besides, the root causes of the crisis have surprisingly little to do with deficits. Until very recently, Ireland and Spain were in surplus. Even Italy still has a primary surplus. The fundamental issue is… the euro itself.
A flawed currency union that violated almost all the tenets of Optimum Currency Area theory, the euro created the structural conditions for huge imbalances, the loss of southern competitiveness, and reckless borrowing in both public and private sectors.
No one would have lent such amounts at such interests in liras, drachmas or pesetas. The crisis was no surprise. It was predicted years ago by economists both from the left (Krugman, Roubini) and the right (Friedman, Feldstein).
Even Jacques Delors knew it. He pushed ahead anyway, hoping that a crisis would provide the golden opportunity to usher in the federalist vision which the common man would never accept in ordinary times.
Loss of Sovereignty and Democracy Third, the European summit was a loss to national sovereignty and democratic principles. Merkozy bullied other leaders to sign something that no one knew what it really contains.
It is downright silly to suppose that the goal is merely to ”strengthen” the existing rules. Every economist knows that the fiscal rules are flawed and incapable of solving the real issues, anyway.
What they are trying to do is to bring in a federal state through the backdoor. First, more powers to the Commission, in effect a European Ministry of Finance. Then, the Eurobonds. Finally, federal taxation.
It will be interesting to see how all this is done in practice. The politicians seem to be so used to breaking their promises that following it has become a national pastime in many countries.
This time they may also have to break the law.
In Finland, the Constitutional Committee gave a clear verdict before the summit: it would violate the constitution to be part of a bailout mechanism in which we have no veto. Prime Minister Katainen went ahead anyway, and now they are figuring out how to wiggle through.
Legal scholars in Germany have pointed out that Germany could never accept a similar situation (in the new ESM deal Germany will always have a veto due to its size). Yet they are asking, even insisting, that Finland and others accept it.
What about Ireland? Will they put the changes to the people in a referendum? Or will it be another Lisbon Treaty? Yet it is evident that if the new deal is supposed to have any real meaning, it will have to imply a transfer of sovereignty, so that a referendum is necessary.
No Other Solution? The correct solution is simple. It will cost, of course. There is no painless way out of this mess.
Remember Iceland. It suffered one of the biggest crises in recent history. It took the right measures, taking big haircuts on its external debt (despite vocal protests from international bankers and their political puppets!), and tightening the belt.
Now it is undergoing a promising recovery. Of course, Iceland had a clear advantage: its own currency. That gives flexibility.
Yet the basics are repeatable. Tough haircuts on external debt. Aid only through ordinary IMF funding, along ordinary principles and ordinary funding.
No special politically motivated deals.
Tough on banks and bankers. Bail them out only if necessary: not indirectly, but openly and directly, with demanding conditions.
Will there be a recession? Maybe. Perhaps even a depression. But if so, then it is something that cannot be avoided in any case. The current, flawed plan is not ”buying time”. It is only making things worse.
Wanted: Political Courage In the Finns Party, we are in favour of co-operation. We are favour of Europe. We are in favour of national sovereignty and effective responsibility.
The British have made their choice. I cannot express in words how grateful we are in Finland to Cameron and the British leadership for their courage to say No.
It makes a huge difference. Other countries like Finland, Sweden, Denmark, Austrian and the Netherlands must ask themselves: what is really the right thing to do?
To us one thing is clear: Finland should not participate in a flawed and dishonest bailout plan. The Finnish parliament has the power to say No and stay out, completely.
However, Mary Ellen Synon is right: The Big Question is referendum.. Now is the time to listen to the people, for once for real throughout Europe.
Tämä Timo Soinin kommentti on julkaistu Mary Ellen Synonin blogissa
Daily Mailissä 15.12. 2011 http://synonblog.dailymail.co.uk/