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The Break-up of the European Union
read in Macedonian


There has been some worry and angst in Macedonia for several years now over the fact that while Macedonia is ready for EU talks, it cannot enter into those talks because of Greece’s effective veto.  I’m here today to tell you: worry no more!  The European Union – in its current form and with its current rules – is no more!

I don’t mean that literally of course.  But figuratively, the EU – as it was dreamed up by its fathers as a common trading zone and as it has become – no longer exists.  And it will physically (and fiscally) transform in the years – perhaps months – ahead.  In the real world, the financial markets for instance, are moving much faster than the politicians, the European leaders, can or are willing to move.  And the markets will soon dictate the necessity of the EU transforming into something else – my prediction being perhaps a much smaller club – say 10 countries – with everyone else being on the outside in some other form, hooked up to those 10 but something less at the same time.  And that new club will also have a much more integrated political system with more power focused in fewer unelected and unaccountable hands.

(On the question of NATO membership, I also firmly believe that NATO, in its current form, will change into something else and that Macedonia not a part of NATO – now or when it changes – is not something to get anxiety over.)

I follow global news and especially financial news more than most Americans; I have a keen interest in it knowing full well that the economy dictates politics.  “He who has the gold makes the rules,” is an old saying but just as true today as it was when it was first uttered.  As the global economic crisis continues to deepen, and specifically as the EU crisis continues to deepen, certain core countries will look to consolidate their economic power but will also accumulate more political power. And then they will dictate the rules.

Over the weekend, the Wall Street Journal, writing about the UK’s role in the EU and whether or not the EU should join the Euro wrote about this new political union that will ultimately come about.  “Some say this proves the euro was a mistake. History may judge it was. But the architects of the single currency always knew it was only a step in the European project, that economic and monetary union would ultimately require a political union. Indeed, this was why the U.K. refused to join. The true measure of the euro's success, therefore, is whether out of the current crisis it gives rise to a genuine political union—and if so, what type of political union.”

On Sunday, the UK Telegraph reported that “monetary union was in danger of disintegration” and “the European Central Bank said it was unsustainable as constructed.” Germany’s former Vice Chancellor over the weekend said the EU has “two weeks” to save the EU project.  Billionaire financier, atheist and leftist George Soros said “three months.”  The New York Times on Sunday warned that “On consecutive days last week, two of the most powerful figures in Europe — Mario Draghi, president of the European Central Bank, and Olli Rehn, the most senior economic official in Brussels — warned that the future of the euro zone was in doubt. In the words of Mr. Rehn, the union might well disintegrate unless policy makers took steps to bind the euro’s 17 nations closer together.”

Others give varying timelines for the break-up of the Euro and the EU but all agree on one thing: if things continue as they are (and they will), the Euro and the entire EU project will be over soon, but they will be replaced by something else; power, you understand, abhors a vacuum.

While the EU has monetary union – a common currency – there is no fiscal union.  The calls for fiscal union – “more Europe” as so many have said this year – are coming from more and more leaders and more often; the Spanish and Italian prime ministers called for more unification over the weekend.  But while many are calling for “more Europe” and more power, just what that means is anybody’s guess.  My guess, as noted above, means a smaller club with more power in fewer hands, dictating policy to every other country that wants to do business with them.  And everyone will want to do business with them because they will have the gold and the power.

What does all this mean for Macedonia?  Macedonia will probably never be a member of the current EU because the EU will transform into something else.  The best course of action for Macedonia right now – June of 2012 – is to continue to make necessary internal reforms, continue making stronger your free market economy, put safety guards in place (as much as you can) to cushion the external financial shocks, and work as hard as you can to produce as much as you can internally for your own needs.

As former US Secretary of Defense Donald Rumsfeld was fond of saying, we are facing a known unknown.  We know it will happen (the break-up of the EU); we just don’t know what it will be replaced by.  And that is a somewhat frightening thought.

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Jason Miko
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