« | Home | »

Terminal Decline

Tags:

As Wynne Godley observed in the LRB nearly twenty years ago, the current crisis in the EU, and governments’ inability to deal with it, were inevitable, given the terms of the Maastricht Treaty (yes, we’ve linked to the piece before, and may well link to it again):

The incredible lacuna in the Maastricht programme is that, while it contains a blueprint for the establishment and modus operandi of an independent central bank, there is no blueprint whatever of the analogue, in Community terms, of a central government. Yet there would simply have to be a system of institutions which fulfils all those functions at a Community level which are at present exercised by the central governments of individual member countries…

If there were an economic and monetary union, in which the power to act independently had actually been abolished, ‘co-ordinated’ reflation of the kind which is so urgently needed now could only be undertaken by a federal European government. Without such an institution, EMU would prevent effective action by individual countries and put nothing in its place…

If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalisation, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation.

Comment on this post

Log in or register to post a comment.


  • Recent Posts

    RSS – posts

  • Contributors

  • Recent Comments

    • Mark Dando on The Eighth Hill of Rome: Decades later on the other side of the world, I feel slightly guilty when I look at some pieces of broken amphora on my terrace pilfered when we livin...
    • Chris Lintott on A Meteor in the Saturnian Sky: I'm not sure it's true that Cassini could have been solar powered - no mission relying on solar power has operated so far from the Sun. Technology is ...
    • IPFreely on ‘Herr Müller wants to talk to you’: An AfD leader, Gauland, is now saying that Germans have nothing to do with the Nazi era and that it is time to move on - quite what he wants to move o...
    • vanini on A Meteor in the Saturnian Sky: While it's appropriate to celebrate Cassini's amazing scientific discoveries, there should be a mention of Cassini's dark side: it carried 72 lb of th...
    • Stu Bry on In Praise of Process: While I agree wholeheartedly with the sentiments in the blog I find it strange that there is no consideration of Process in terms of EU accountability...

    RSS – comments

  • Contact

  • Blog Archive

Advertisement Advertisement