« | 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

    • streetsj on Burning Injustices: The Tories seem to be behaving like football teams of old putting everyone behind the ball just to defend their lead. In this case obviously the lead ...
    • IPFreely on Burning Injustices: But it works, it works - in the sense that the voters (the tory ones ) will cheer and down another stiff one. She might not be Maggie but she's a dam'...
    • Ouessante on Post-Democratic Broadcasting: Nick Robinson was President of the Oxford University Conservative Association. Charitably, it shouldn't matter...but it does.
    • Peterson_the man with no name on Post-Democratic Broadcasting: The standard glib response to accusations of BBC bias is to point out that "left-wingers and right-wingers both think the BBC is biased against them, ...
    • Scaramouche on With Senegal’s Fishermen: In 2006, when the dangerous journeys by open pirogues to the Canaries were at their height, West Africa's traditional coastal fishing had been badly d...

    RSS – comments

  • Contact

  • Blog Archive

Advertisement Advertisement