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Europe and Optimism

January 13, 2016

Europe and Optimism

 

Why the fracture of Europe is a good thing.

A united statist entity that is only aligned for the aggregation of economic, political, and even aspirations of military power cannot reform. There is only more rules upon rules which make growth improbable and population restless as their needs are taken care of less and less with each passing day. My sense is Europe will fracture into many regional alliances that will carry certain interesting characteristics. It is very likely that an overarching European defensive alliance will exist provided in a different format than it is today.

Currency competition will intensify as Euro exits begin. Two countries that come to mind that aren’t often mentioned are Finland and Slovakia. Finland is not happy with the budget and re-distribution of it’s resources nor the ability to accommodate it’s trade gravity impact from the Ruble devaluation. Slovakia on the other hand borders Czech Republic, Hungary, Ukraine, and Poland each of whom has a national currency, and to a certain degree will have ameliorating effects on exports of its’ manufactured goods into these and other countries via the relative strength of the euro. Both countries have relatively easy exits out of the Euro. In the case of Slovakia it is possible for Czech Republic to act as a medium of transition via expanding the monetary base via the krona that would translate either into a national currency of its’ own via an exchange rate or keep the krona for both countries for a period of time. Similar action is possible with Sweden for Finland. Both exits would remove Euro monetary base and relatively stable economies from the overarching budget. The real problems will be readily apparent when BREXIT occurs and EU budget looses UK support to a degree. Any or all of these actions will create a necessity to cleanse the monetary base for both euro and non-euro countries via discharge of bad debts and other aspects that were held at bay for too long without adequate resolution. Competition in this sphere will make it more likely to allow greater ability for the body politic at large to gain the most in the least desirable situation since robbing the public would imply forfeiting monetary control for the foreseeable future.

Ideological and psychological competition will intensify. Hungary with its’ far right parties in a sense is providing some vision of the right swing that is underway in Eastern Europe. Consensus is dead, it is decay and brings nothing but stifling of discussion within Europe. Social structures in Europe will most likely be cut down through budgetary means and all those whom relied on them will scream but to no avail, there is no money. All of these waves of change that are occurring simultaneously will create a storm of rebelliousness in individuals. Why comply and agree to a social contract that is being rewritten without your participation at every instance both economic and political? The problem at this point will descend into how the confrontation occurs instead of why. Migration will cease more or less due to border controls being enforced first mildly then harshly. Eventually all of these aspects will create a sense of external self actualization most likely directed at North Africa at least for some of the European actors. The malaise in social groups that is now dynamically shifting to fear will eventually translate to anger push some sort of re-negotiation at the social contract level. It is very likely that there will be a direction of removing overhead taxation, ergo anything relating to quietly being in one place since movements will dwindle. Once there is a push to reduce gov’t graft and budgetary redistribution for the sake of contracts of some form or another there will be winners and losers, some countries will sacrifice big inefficient industry and contracts for the well being of the population others will do the opposite. Marginally everyone will have to cut back as global growth turns into decline. Theoretically if debt re-set occurs on a large enough scale without destruction of productive capacity there would be a very large deflationary shock across the continent and globally.

Perhaps success or failure of independence movements like the one in Catalonia will create imperatives to solve problems or have them solved for you. It is possible that disintegration will also have some states merge as well to better be able to survive in this new environment.

 

The most optimistic aspect of the new and coming Europe is the discovery of whom one is. What makes one a nation and which definitions are applied to themselves by the groups at large. The EU experiment that attempted to wipe away national character will instead spawn more ingrained belief in certain character that is and certain character that will be there in the future. Perhaps this whole experiment of EU bureaucracy where the rights of migrants are above the rights of locals will have a drop of ruthlessness carry through the European bloodstream. But to what other effects?

 

“Put your lights on”

Be well dear reader.

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