The sound of cracking foundation was audibly prevalent in the power centers of Europe this past week, and sent shudders throughout the world. Having only recently applied a finger to the dike of the crushing debt obligations of the nation of Greece, the overseers of the European common currency turned around to find one of the “unbreakables”, the powerful economy of Italy swooning in crisis as its profligate barely sustainable spending habits became unsustainable, with its debt burden by creditors refinanced at the intolerable level of over 7%. The result was the crashing down of Italy’s democratically elected government led by its Prime Minister Berlusconi and its proposed replacement with an unelected technocrat of the European Union hierarchy. The process of collapse of governments elected by their own people to represent them, and their replacement by unelected “unity” governments appears to be the direction, only recently mirrored by Greece, under demands of Europe’s larger lending governments, is an untoward and dangerous trend. In Andrew Gilligan’s excellent UK Telegraph article on Europe’s current crisis, he puts this anti-democratic trend succinctly:
Many remarked that just as the Arab Spring has started to replace unelected old men with democratic leaders, the European autumn is replacing democratic leaders with unelected old men. But as in all previous rounds of this crisis, all it seems likely to do is win a brief breathing space.
The painful reality of what is happening in Europe is the inevitable outcome of governments assuming their innate intelligence is greater than the collective intelligence of the populations that elected them. The nidus of pre-mediated governmental failure is in all cases, “the Good Idea“. In this particular case, the good idea was a single currency linking the European Union countries into a single economic market, linked by a single currency of economic value. It was the high sense of mission that led individuals in search of a Europe free of the “petty” differences that had divided it since the fall of the Roman Empire, and led to the two cataclysmic events of the twentieth century, the European borne World Wars. A common currency would over time blend cultural and market differences and lead to a future of greater quality of life and peaceful co-existence. It was this particular “good idea” that saw fruition in the Treaty of Maastricht in 1993 that led European countries to sublimate the wills of their elected populations and their inherent self interests to join a monetary, and hopefully political, union. Like all unifying “good ideas”, the founders hoped that bad behavior would eventually be overcome by good neighbor examples, and therefore allowed countries fundamentally incapable of the long term responsibilities of such a union to join.
As wikipedia notes, quoting John Lancaster of the New Yorker: ‘The guiding principle of the currency, which opened for business in 1999, were supposed to be a set of rules to limit a country’s annual deficit to three per cent of gross domestic product, and the total accumulated debt to sixty per cent of G.D.P. It was a nice idea, but by 2004 the two biggest economies in the euro zone, Germany and France, had broken the rules for three years in a row’.
Italy, the seventh largest economy in the world was supposed to be above the calamity it currently faces. After all, even in the current recessionary times, its budget runs in surplus, and its debt is currently 120% of GDP, not dissimilar to the United States. But Italy under crushing debt responsibilities, found itself tottering never the less, and several other countries feverishly looking to find any device to prevent the inevitable collapse of the Euro.
Now we are left in the birthplaces of western civilization’s most sacred ideal, that of individual freedom and expression, Athens and Rome, with that most anti-democratic of processes, external demand for control. It wasn’t that long ago that a Germany strangulating under the external demands of the World War I Versailles Treaty nations, who determined what part of Germany’s economic lifeblood should be sufficient payback for her bad behavior, threw its lot with a dictator who offered a national salvation for the painful servitude. That certainly turned out well.
The accumulated debt burden of the European Union countries is estimated to be 4 Trillion Euros, beyond all expectation of what is supportable by any collection of investors, China or otherwise. The best news of all, is that the United States’ debt burden is 15 Trillion, and her unfunded mandates over 100 Trillion. All the money in the world is not going to sustain an undisciplined United States, if it does not learn by Italy’s current climatic example. We are at a true moment of clarity. Europe is about to face a year of unprecedented turmoil, the United States is going to debate whether the issue of our time can be shoved down the road again, and a western populous that has lost sight of what principles raised individual life quality to the highest level achieved in the long history of suffering humanity, ignores the lessons at their peril. As Shakespeare said: “The fault, dear Brutus, is not in our stars, but in ourselves.”