Gang of eight

[Lafayette]

From the Economist: Northern member states unite on euro-zone reform

Excerpt:

In the late Middle Ages the Hanseatic League, a confederation of merchant guilds in northern Europe, dominated maritime trade in the Baltic and North seas. Now finance ministers from the northern states, characterised by their fiscally hawkish and free-market views, are hoping to set the course for reforms to the European Union. Composed of Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden, the group, dubbed the New Hanseatic League, is starting to have some influence.

… But Britain’s withdrawal means that they have lost a champion of openness.

At the same time, the French and the Germans have an irksome habit of cooking up reforms to the single-currency area between them. The latest example of that was in June, when Emmanuel Macron and Angela Merkel agreed a common position …

Some proposals — such as those to strengthen the euro-zone’s bank-resolution and sovereign-rescue funds — have broad support. The league’s abhorrence of fiscal transfers, though, has put it on a collision course with the French. Mr Macron has pushed for a common budget to help stabilise unlucky countries struck down by economic problems.

But a joint paper by the league’s finance ministers in March stresses that “first and foremost” countries must be in “full compliance” with the EU’s fiscal rules*.

If each member acted responsibly and whipped its public finances into shape, then it would be able to deal with economic shocks without other states’ taxpayers having to bail it out. The hawks argue, with an obvious eye on Italy, that a stabilisation scheme that shares risks across countries would also encourage profligacy. The league would rather concentrate on unleashing market forces within the eu—for instance, accelerating reforms to the capital market, or striking more trade deals with third countries.

It's been a while since 1950 when the European Coal & Steel Community first tried to find common economic ground. And few can complain of the immense progress it has made since to what it is today. (Except for the Brits, but that is their problem.)

As of 1950, the European Coal and Steel Community begins to unite European countries economically and politically in order to secure lasting peace. The six founding countries are Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The 1950s are dominated by a cold war between east and west.

That last line in red above is the real-reason that there is a European Union. Thank you Communist Russia. Because the common-thought at the time (1950s) was, "It's better that we are all in this together than only partly". Behind this notion is another. Like it or not, Europe has a collective destiny to which individual national heritage must submit.

Key to that common-destiny economically is a common-currency, a common Central Bank to oversee the currency, and a common will that European Destiny is more important than just one nation's. Once that gets functioning correctly, the rest is child's play. And the economic rewards are delicious - just as they have been for the US.

That last part above, in Europe, is however easier said than done. It has taken Europe, since 1950, more than seven decades to get where it is today and the destination has not yet been reached ...

*How do you say that in Italian ... ? ;^)