The EU is Coming Apart

By Rich Kozlovich

Today Ryan Bridges posted the article The EU Goes to Battle Over Italy’s Budget, at Geopolitical Futures, which is a subscription site.  I thought it played into Dan Mitchell's article, A Helpful Solution to Italy’s Budget Standoff with the European Commission.

Bridges notes that Brussels has to look strong and the only solution is a market based solution because they don't have the tools to enforce any of their demands on Italy's budget, which is bankruptcy in the wings. 

But the reality is the EU is doomed, and that should be obvious to the most casual observers.  The EU is facing the exit of the United Kingdom and they're trying to impose sanctions of some kind against Poland and Hungary.  The Eastern European members of the EU aren't impressed with Brussels, or afraid, and now that the EU has rejected Italy's budget draft, they're facing what I believe is just one more unresolvable crisis. 

As Bridges notes, the EU now fears an exit of the EU by Italy.  It's the fourth largest economy in Europe, but it's debt load is staggering and this budget has spending at levels that will triple their deficit spending.   But who will lend them the money if they've become so deranged to believe they can spend unendingly and still be a viable economic power? 

He rightly observes the EU wants to end this problem as swiftly as possible, but the fact of the matter is - this is just one of many problems that will not go away swiftly or otherwise. 

To understand this whole EU mess is to understand Europe is a patchwork quilt of unending ethnic variations.   In so many of Europe's nations they're broken up into their own social paradigms and languages.  As Bismarck, the Iron Chancellor of Germany once noted, Europe is nothing more than a geographic designation.  Unlike the United States, Europe doesn't share the same language or the same culture.

The rest of the article goes on to explain - quite well I think - the different strategies being used by both sides to each get their way, but all this is nothing more than fighting to sit at the Captain's table for dinner while the ship is sinking. 

This is just one more plug being pulled out of the ship's hull.  When just one of these nations defaults, and it's going to happen, the rest of Europe will be flushed down the toilet economically, taking many of the world's banks with them, along with Russia and China, both of who's banking systems are a complete and fraudulent mess.