EU—R.I.P –1993-2018

Unlike India, households in Europe and USA have forgotten one simple word — savings.

Europe economic and social crisis is becoming worse with each passing day
Europe economic and social crisis is becoming worse with each passing day

“Project Europe”

The idea of Europe or “Project Europe” as it used to be called had its origins in the post second world war situation when some countries felt need for peace and deeper cooperation.

French Foreign Minister Robert Schuman presented a plan for deeper cooperation in 1950. This was essentially for control of Steel and Coal industries on a common basis to regulate production of weapons. Based on the Schuman plan, six countries- Germany, France, Italy, the Netherlands, Belgium and Luxembourg–signed a treaty to run their heavy industries – coal and steel – under a common management. In this way, none can on its own make the weapons of war to turn against the other, as in the past. The six were

In a sense, the European Union (EU) was created by the Maastricht Treaty on November 1st 1993. It is economic union between European countries which makes its own policies concerning the members’ economies and laws and to some extent security.

EU got expanded and there was clamour among many erstwhile Communist states to join. Romania and Bulgaria joined in 2007. Even Turkey was one of the candidates but not accepted so far. There was an understanding about Fiscal measures in respective countries—that deficit will not exceed 3% of the GDP and Debt will be within 60% of GDP. Many countries like Italy /Greece etc. fudged numbers and this could not be enforced. EU created a single currency—monetary union but not a fiscal union. It is like India having a common currency but each state having any level of debt and deficit. This is not obviously sustainable.

“The European economic and social crisis is becoming worse with each passing day. One business channel asked me in 2008 how long it might take to recover and I responded saying 40 quarters –After that no channel interviewed me .But now I forecast it may never recover.

Europe is facing three types of crisis – economic, demographic, and civilization and it is not in a position to come out of these. All three are not recent ones; they were developing over a period and are now culminating into a catastrophe.

The Debt to GDP ratio of most of Europe is at unsustainable levels with our own Britain having above 500 per cent — I say our own since we may be asked to help them run their country sooner than later. There are three major constituents of debt — Government debt, corporate debt and household debt. Of the three, we find household debt has reached nearly 80 to 100 per cent of GDP in most of these countries. The reason is simple — unlike India, households in Europe and USA have forgotten one simple word — savings. They live on debt and are interned by debt.

The root cause of the issue is the attempt in Europe to nationalise families and privatise business. Old age issue/ health issues/ child care issues are all normal family activities that have been taken over by the state and the state is broke. Funded security schemes are facing crisis since not enough numbers are getting in to labour force due to low reproductive rates and unfunded security system is in difficulty since taxes are not adequate due to low population growth.

The situation is made worse by the unemployment situation. Youth unemployment has reached 50 per cent in Spain and hovering around 30 to 40% per cent in most of the other countries. Youth is defined as being between the ages of 16 to 24, unlike in India where even a 47-year-old is a ‘youth icon’. The overall unemployment is at more than 25 per cent in most countries and it is creating social turmoil.

Along with this is the demographic crisis. The population of Europe during the First World War was nearly 25 per cent. Today it is around 11 per cent and is expected to become 3 per cent in another 20 years. This is mainly due to low reproductive rates and in some countries is as low as 1 when 2.1 is considered as equilibrating rate. Europe will disappear from the world map unless migrants from Africa and Asia take it over. That is why Europe is being referred to as Eurobia and London as Londonistan.

“Coupled with economic and demographic crisis is the crisis of civilisation in Europe. It has renounced the Church and has become secular. Church attendance has fallen significantly and churches have become tourist attractions rather than places of worship.

Most of the migrants, particularly those doing ‘brown colour work’ – like garbage removal, cleaning plates in restaurant, porter jobs, and grape-picking — are people from Mauritania/Syria/ Somalia/ Algeria etc. and most are Muslims by faith. Due to a high degree of unemployment, there is resentment against migrants and this anger is turning into anger against Muslims.

Nearly ten thousand is attempting to Enter Europe every day and one million refugees are waiting to enter Europe. Unfortunately many perish in boats near Italy.

Recent Poll in Netherland boosted anti-immigrant, anti-EU, anti-Islam party of Wilders. It became second largest. In France Le Pen—who is anti EU and anti-Immigrants may gain ground in the forthcoming Polls. If Le Pen wins then demise of EU will be faster. Hungary/Austria/Poland is in queue—BREXIT is the beginning—The project Europe is unsustainable and dead. Long live EU


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