Almost exactly one year ago Greece was debating whether it should continue as a member of EU or to exit. It was my opinion then that the Greeks would be better off with BREXIT. I had written a post giving my opinion, the link to which is here . Eventually, however, the Greeks succumbed to the bullying of the European Parliament. I knew that this arrangement would not last for long, and Britain has now confirmed my thinking.
EU was always an artificial construct. It was okay till EEC and ECM existed until the fall of Communist Europe. The short-lived euphoria generated by the collapse of the Berlin Wall blinded the Europeans to the fact that historically Europe has never been one. Too many ethnicities have continuously clashed over millennia for space and resources.
The merger of the two Germanys after 1990 was applauded by the entire Western world as a great historical event. Which, to be honest, it really was. But perhaps there was only one man who understood the economic implications of this merger for West Germany. That man was Chancellor Helmut Kohl. A whole population of a nation used to living at almost 80% lower standards had overnight migrated into a society that was living at standards 5 to 6 times better than their own. The pressures that such awesome expectations generated would tear any society apart and there was huge potential for civil war within Germany.
Kohl deflected this danger by proposing the European Union and even went a step further by suggesting a common currency, the Euro. This was a masterstroke for Germany as it spread the cost of German unification across all of Europe, and as subsequent events have confirmed, made poorer European nations like Greece, Portugal, etc., to heavily subsidize it. Initially, it was camouflaged through liberal loans given by the European banks flooding the economies with a lot of cash. But such shoveling of money has never worked in the past and was unlikely to work now. During the oil price boom after 1973, a lot of petrodollars suddenly inundated the world and the banks were hard put to find parking space for them. The resultant bursting of the bubble in the 80s was so quickly forgotten and no lessons appeared to have been learnt in the aftermath of the euphoria generated by the collapse of communism. Britain, however, conservatively retained its currency and did not liquidate the pound in favor of the Euro. In hindsight, that was indeed a wise move.
EU temporarily put the ethnic distrusts in cold storage and appeared to be the answer to problems that had eluded first the League of Nations and then the UN. All looked rosy as a huge population of hitherto deprived people burst upon the consumer scene with unfulfilled desires and almost insatiable appetite for goods. Capacity expansions in manufacturing countries like China, India, and elsewhere churned out consumer goods at ever growing rates; there was huge demand for skilled labour. It was boom time and it felt as if the good times were here to last forever.
Francis Fukuyama predicted that history had come to an end and liberal democracy was the ultimate pinnacle of social development. Dyeing plants were installed on cargo ships transporting grey cloth from China, which was then dyed into requisite colors on high seas in order to save time. The ready, dyed fabric would reach garment-manufacturing factories in Spain, Italy and other European sweatshops, for conversion into clothing. Such was the madness that afflicted the world after the Berlin Wall. I was one of those few who had sounded a note of caution to my fellow-businessmen and warned against indiscriminate expansion of capacities. But hardly anyone listened. When customers are knocking on your doors with orders for quantities you have never heard before, it is very hard to say no and turn them away to a competitor. Even I was forced to add factories and machines, although my gut feeling was against it. However, that is another story.
The tsunami unleashed by the collapse that came in 2008, has not yet run itself out. Before it subsides it is bound to take many more victims in its wake.
Politically, Iraq war and the consequent destabilization of the Maghreb, the Middle-East and Afghanistan have converted the entire conflagration into a religious war with Sunni Islam in conflict with every other religion in the world, including it’s own, many offshoots. The human cost of this conflagration is yet to be objectively assessed, as it is still raging across the Levant and the Af-Pak region. Europe’s refugee problem has become acute and, I believe, has reached a tipping point. The EU is unraveling faster than we can think, and Merkel might eventually be left holding the baby.
On a side note, I would also like to point out that Europeans who emigrated to the Americas and Australasia created new ethnicities for themselves, after completely decimating the native populations of these lands. So we have Americans, Canadians, Australians and New Zealanders who may have come from different European ethnicities but have melded into one common ethnicity of the land they colonized. There is no possibility of them breaking apart like Europe can.
The British have voted with their feet and David Cameron has been swept out of office. Theresa May has a very tough job to steer the country out of the shoals into which German smartness and European greed had landed this island nation. Some fears that Scotland may look for an exit from Great Britain do not appear to me to be founded on reasonable grounds. The Scots and the Welsh have been a part of the British Empire for much too long and would hardly benefit from an exit now. Some ambitious politicians might wish to stir the pot, but I feel the people will repeat the results that Scotland gave after the last referendum. Ireland, I feel may also exit the EU but I see no possibility of it joining either Northern Ireland or Britain. Nothing for the Irish to gain from such a merger!
How Britain handles the exit from EU will perhaps determine the future course the European Union will take. Weaker nations like Portugal, Italy, Spain and Greece, of course, might also wish to hold a referendum and vote in favour of an exit. France is currently in the throes of a murderous Islamic militancy that seems to have gone completely out of control. That there is not much that Brussels and the European Parliament can do other than showing platitudinous solidarity is becoming apparent to the common French. Eventually, they are finding, that it is their war and they have to fight it by themselves.
Merkel is hopeful that by keeping German borders open she will be able to facilitate the passage of Islamic refugees from the Levant into the member countries of the EU, and not many will opt to live within Germany. But, gradually, the Europeans are discovering that the refugees are not an answer to their labour shortage as most of them are unemployable. A huge social problem is building up within Europe and threatening to spin into hurricane proportions. The Tunisian truck driver in Nice gave an ample demonstration of the coming catastrophe on Bastille Day.
Perhaps a return to the EEC or the European Common Market would eventually be better for Europe and the world. A common currency removes competitiveness from economic activity, and a common Parliament based in Brussels does not resonate as much as the one in each capital city.
By Vijaya Dar