True Debate: RabidAlpaca v. German Guy

[Redress]

RabidAlpaca and German Guy have decided to do a true debate. The topic is: Role of the Euro and EU. The length will be 1 opening post and 5 replies each. Starting time is today. RabidAlpaca will make the first post.

Discussion thread for this debate is here: http://www.debatepolitics.com/battle-grounds-and-disputations/158352-discussion-thread-rabidalpaca-v-german-guy.html

 

[RabidAlpaca]

I will start with my opening statement, after which German Guy can make his opening statement, and then I will begin elaborating on my points.

I vehemently oppose the common European currency, the euro, and am opposed to the EU in its current form.

For me the euro's faults can be summarized in a few concise points:

- A currency should be a direct representation of a nation's economy.
- A common currency requires a major reduction of legal and fiscal sovereignty of the nations involved.
- The risk of infection in a fiscal crisis is substantially higher with a common currency.
- The euro was a concoction of the politicians, and not of the people. It was more of a symbolic maneuver than practical.

As far as the EU, I believe:

- Forming a group of like-minded nations who come together to insure peace and free trade is not necessarily a bad idea.
- The more layers of government between the citizens and the politicians who make the big decisions, the less accountability the politicians have to their constituents. The EU is simply another layer between the people and the government.
- There's nothing inherent in the EU's structure that requires sharing a currency in order to function.

 

[German guy]

Here is my opening statement.

I strongly support European integration and believe the current EU is better than none. Economic integration is the key for a lasting European integration, which is why I support the euro currency.

Regarding the EU, I believe:

- Economic and political integration of European nations is the best historical answer to centuries of war, and the only way to avoid multipolar power plays along the lines we've seen in the 19th century.

- The problem of deficient democratic responsiveness of the EU can be best addressed by more integration, not less.

- Economic integration has so far been the key for political integration, which is why it is crucial.

Regarding the euro currency, I believe:

- While it was a mistake admitting countries that weren't ready and didn't meet the criteria, it's too late now crying over spilled milk. This mistake cannot be made undone by dissolving the euro zone.

- The costs of abandoning the euro today would be larger than the benefits, especially because a failure of the euro currency would probably mean an end of the entire EU project.

- The benefits of European integration, including a common currency, should be worth some investment from the side of countries such as Germany.

 

[RabidAlpaca]

Now to elaborate on my points:

- A currency should be a direct representation of a nation's economy.

When you couple strong economies with weak ones, the stronger economies will inevitably be liable for the actions of the weaker ones. This promotes a sense of contempt on both sides. Contempt by the weaker economies that sanctions and controls from other countries must be imposed on their own country, and contempt by the stronger economies that they must loan massive taxpayer funding and babysit. This makes Europe weaker and more divided, not stronger. Just as your friendship with a deadbeat friend who always borrows money but never pays you back might be damaged, so can this damage international ties.​

- A common currency requires a major reduction of legal and fiscal sovereignty of the nations involved.

For a currency to function, there has to be an overarching entity setting the rules of the game. In the Eurozone this is the European Central Bank. Individual countries lose a portion of their sovereignty and their ability to react to crises. Greece being able to devalue its currency to a certain degree or take other major action may have helped to ease their own crisis. They however were held hostage (and rightfully so) by the other Eurozone members who had a vested interest in the euro.

The overall trend over the past 11 years in the Eurozone has been more regulations, more laws, more central control, and as such less sovereignty. We're on a course to becoming the United States of Europe. Sharing a currency requires a certain level of cultural homogeny. This is simply not the case in Europe. There are too many different types of people with different languages, different cultures, and different beliefs to try to fit under one set of rules.
​

- The risk of infection in a fiscal crisis is substantially higher with a common currency.

When entities share a currency, their fates are inevitably intertwined. I'd be amiss if I ignored the fact that Europe's economies were already helplessly intertwined even without the euro, but it was certainly not to this degree. We've seen a chain reaction in the Eurozone. Starting with Ireland and Greece and moving along the mediteranean. As more Euro countries come to the financial aid to their neighbors, the worse their own situation becomes.

Many will argue that stronger countries like Germany have benefitted from the euro. I disagree. The only argument that could be made is that the other countries have kept the value of Germany's currency low, which in turn has helped their exports. However, if Germany had its own currency, it could have kept its currency's value low via many other methods that would've been far more beneficial, such as stimulus, artificially low interest rates, government projects, or pegging to other currencies as the Swiss did.

I'm personally against the intentional devaluing of a currency, but if we're going to do it, wouldn't you rather have it be to your benefit instead of someone else's?


​

- The euro was a concoction of the politicians, and not of the people. It was more of a symbolic maneuver than practical.

I understand the concept of a representative government, and that the elected, not the electorate generally make the decisions. However, for something as fundamentally important as a currency, there should be some level of involvement by the people. Germany, the powerhorse of the euro, had zero choice to join the Eurozone, because it was made a condition of reunification by the French. Force and coercion is not the proper way for a free nation to join a currency union.​

- Forming a group of like-minded nations who come together to insure peace and free trade is not necessarily a bad idea.

I think Europe coming together to form a bond of peace and mutual protection is a great thing. With mutual defense treaties and a combined coalition, the countries of Europe can focus more on economic prosperity and less on warfare. When deciding the balance guns and butter, they can share the guns and keep their own butter.

Free-trade is another extremely crucial attribute of the EU. This however has to be met with a balance. Breaking down the barriers between countries, both with the Schengen Agreement and the other economic agreements, the people of Europe can move and trade fairly freely with each other, promoting strong bonds and stronger economies.

Naturally, with open borders and free trade, there must be a set of ground rules to ensure the safety of all the nations involved. This however should not be led into a slippery slope of sovereignty degredation.​

- The more layers of government between the citizens and the politicians who make the big decisions, the less accountability the politicians have to their constituents. The Eu is simply another layer between the people and the government.

Let's say you lived in a small village (100 people) outside of a large metropolitan area. If you were having an issue with your local village governance, you could probably fairly easily get an appointment to speak with the mayor or other local official. If you had a major grievance that couldn't be solved, you could petition with your fellow neighbors, and more than likely you could get something done.

Do you think your odds of getting the attention of the mayor of the local metropolitan and ultimately enacting change would be higher or lower in the large metropolitan city? What about your county? State? Federal government? The EU? What do you think the odds of a group that you yourself started has of envoking change at the EU level? I would estimate near zero. It is a slow and clunky government that can not react to the needs of the people. Even if it could, there are far too many different types of people to represent under one set of rules.

Government is like an onion, there are many layers. More barriers between the people and the politicians mean less political accountability, more cries left unanswered, and ultimately less democracy.​

- There's nothing inherent in the EU's structure that requires sharing a currency in order to function.

What is it about forming a best friends club that requires sharing a bank account? This is similar to you sharing a bank account with your neighbors. Some will be frugal with their money, some will be highly irresponsible. When you share a bank account, like when you share a currency, the stupid decisions your neighbors make will ultimately devalue your net wealth.​

 

[German guy]

Dear RabidAlpaca,

thank you very much for your detailed arguments. I have to apologize if my answer will be a little long-winded. First, I have to explain my major argument, in order to answer to your points more directly in the second half.

- Economic and political integration of European nations is the best historical answer to centuries of war, and the only way to avoid multipolar power plays along the lines we've seen in the 19th century.

Europe has a long and bloody history. We have seen the worst excesses, needless competition, arms races and eventually millions of us killed in wars in the 19th and first half of the 20th century, when nationalism reached its peak. Ideological struggles shook our nations, be that communism or nationalistic dictatorship including Nazism. Many International Relations experts said this was an almost inevitable outcome of what they call "multipolar order": No leading nation, no single empire with satellites, but many medium to small size countries competing with each other.

Nationalism was the defining ideology of this political concept. And it resulted in a slippery slope where members of one nation would not just place their nation first, but even be ready to kill and die for it eventually. Even moderate politicians had to take the nationalistic sentiments of the population into account, and they could easily be abused. And this, although the ideology if nationalism was even relatively new: It was born in the French revolution of the late 18th century and then spread over Europe during the 19th century.

With the fall of the Iron Curtain 1990/91, we are facing an amazing new situation in Europe: Our nations are all in peace, and all of us share the values of constitutional republics, of freedom. But this amazing luck is not for granted. If we let it slide, we may well see another degradation of the situation towards our dark past: Economic unrest resulting in political instability, this resulting in authoritarian shifts of government, which then results in a rivival of nationalism to rally up our peoples against the others.

It is this historic perspective that makes me believe European integration is crucial, and is worth some money on the short term -- because these costs on long term could be much worse. It's even our very future as free countries that is at stake.

That in mind, I am going to address your points:

Now to elaborate on my points:

- A currency should be a direct representation of a nation's economy.

When you couple strong economies with weak ones, the stronger economies will inevitably be liable for the actions of the weaker ones. This promotes a sense of contempt on both sides. Contempt by the weaker economies that sanctions and controls from other countries must be imposed on their own country, and contempt by the stronger economies that they must loan massive taxpayer funding and babysit. This makes Europe weaker and more divided, not stronger. Just as your friendship with a deadbeat friend who always borrows money but never pays you back might be damaged, so can this damage international ties.​

If you argue that our nationalisms in Europe are a given, and there is nothing that could possibly balance this nationalism or form a counter-weight, I would have to agree with your reasoning. But I don't think this is the case.

It is not new at all that there are economically stronger and weaker regions within a nation, or a federation. The USA is the best example, as there are weaker and stronger states in its union. There are many more examples, not least Germany, where you have economically strong states such as Bavaria oder Baden-Württemberg, and weaker states such as the new eastern states.

Yet hardly anybody would argue that these differences are a reason why the US (or Germany) can't have national currencies. Should the US throw Mississippi or Utah out of the $US-zone? Certainly not. So where is the difference between the US and the Eurozone? It's the feeling of belonging together, a feeling of solidarity. In America, it is a certain patriotism that makes most Americans feel that they have to help and support each other, even when this does not always pay off.

It is my belief that, while old nationalism is still strong in Europe, that there is enough sense of belonging together as Europeans, united in the same values of freedom. Enough to convince our peoples to be ready for solidarity. For many young Europeans, it is self-evident to travel to other EU countries, maybe even spend a few semesters there, to look for a job there. I have Dutch, French and Spanish friends, and I get along well with them, better than with many Germans. And when you look at the larger picture, we Europeans have much more common today than divides us: Look at our neighbors, such as Russia or the Muslim world. In contrast, our differences within Europe are small.

So why not be bold and building on this European sense of togetherness?

- A common currency requires a major reduction of legal and fiscal sovereignty of the nations involved.

For a currency to function, there has to be an overarching entity setting the rules of the game. In the Eurozone this is the European Central Bank. Individual countries lose a portion of their sovereignty and their ability to react to crises. Greece being able to devalue its currency to a certain degree or take other major action may have helped to ease their own crisis. They however were held hostage (and rightfully so) by the other Eurozone members who had a vested interest in the euro.

The overall trend over the past 11 years in the Eurozone has been more regulations, more laws, more central control, and as such less sovereignty. We're on a course to becoming the United States of Europe. Sharing a currency requires a certain level of cultural homogeny. This is simply not the case in Europe. There are too many different types of people with different languages, different cultures, and different beliefs to try to fit under one set of rules.
​

I replied to your latter paragraph above already: No, I don't think Europe is culturally too diverse. All it takes is a focus on the many commonalities we have.

And sovereignty is a difficult thing: You can argue that many small and a couple of medium-sized countries do not really have much sovereignty left anyway. More and more decisions that affect these countries are taken in globalized markets, in international corporations and banks. Small countries are like small boats on the ocean: They can successfully surf on a wave, and maybe take care they don't sink -- but they cannot really change the direction. Only when we pool our sovereignty, we can make a difference globally -- if we Europeans are united.

The euro still is the second largest reserve currency after the $US, and Americans, or later Chinese, Russians and others will not listen to the Czech Republic, to Austria or even to France and Germany, but they will listen to a united Europe. So by pooling our sovereignty, we actually gain more leeway than we lose. But I agree that the EU bitterly needs democratic reforms to allow for more responsiveness towards the population, if this is supposed to work.

- The risk of infection in a fiscal crisis is substantially higher with a common currency.

When entities share a currency, their fates are inevitably intertwined. I'd be amiss if I ignored the fact that Europe's economies were already helplessly intertwined even without the euro, but it was certainly not to this degree. We've seen a chain reaction in the Eurozone. Starting with Ireland and Greece and moving along the mediteranean. As more Euro countries come to the financial aid to their neighbors, the worse their own situation becomes.

Many will argue that stronger countries like Germany have benefitted from the euro. I disagree. The only argument that could be made is that the other countries have kept the value of Germany's currency low, which in turn has helped their exports. However, if Germany had its own currency, it could have kept its currency's value low via many other methods that would've been far more beneficial, such as stimulus, artificially low interest rates, government projects, or pegging to other currencies as the Swiss did.

I'm personally against the intentional devaluing of a currency, but if we're going to do it, wouldn't you rather have it be to your benefit instead of someone else's?​

There is an interested fact that should be mentioned: The US as a whole is much deeper in debts than the eurozone as a whole is. Yet the EU is in much bigger troubles than the US. And that is not because all US states are much better off than Greece. How is this possible?

It is because when the common currency was introduced, no substantial efforts were taken to harmonize the economic and fiscal policies. Especially the interest rates for government bonds were still separate for each EU country. That is why the interest rates for countries such as Greece, Ireland or Spain skyrocketed, while they remained very good for countries like Germany or the Netherlands. In the US, on the other side, there is only one single, united interest rate for the entire currency zone -- which means that the stronger states can easily keep the weaker states above the water.

This can easily be done in Europe too. The cost would be a slightly higher interest rate for the stronger states, but it would get the troubled states out of the danger. As far as I know, such an idea was proposed under the label "Eurobonds". Many European governments like that idea, but so far, it has been German Chancellor Merkel's hardline course that kept it from being implemented.

I'm German, but I feel with my fellow Europeans in other countries. And at least I would not mind to take a slightly higher burden for the German economy into account, when this significantly reduces the problems for my European brothers and sisters in other countries. Which leads me to another statement you made above:

I'm personally against the intentional devaluing of a currency, but if we're going to do it, wouldn't you rather have it be to your benefit instead of someone else's?

This, obviously, depends on how you answer the question who "we" is. Why should I rather be German than European -- even when the former means deciding against the latter? Wouldn't most Americans say, too, that they are Americans first, and only then, they are New Yorkers, Californians, Southeners, Texans, etc? I don't see why I should rather feel connected with random other Germans, than with random Greek, French or Dutch people. We all are Europeans, after all, despite our differences.

(to be continued ...)​

 

[German guy]

(...continuation)

[/INDENT]
- The euro was a concoction of the politicians, and not of the people. It was more of a symbolic maneuver than practical.

I understand the concept of a representative government, and that the elected, not the electorate generally make the decisions. However, for something as fundamentally important as a currency, there should be some level of involvement by the people. Germany, the powerhorse of the euro, had zero choice to join the Eurozone, because it was made a condition of reunification by the French. Force and coercion is not the proper way for a free nation to join a currency union.​

On this point, I absolutely agree with you. As much as I dream of a united Europe where we all live in peace with similar values, I don't think this development should be forced on the European peoples. We shall do it if and when we are ready. This is why I support all measures to make the EU democratically more responsive.

- Forming a group of like-minded nations who come together to insure peace and free trade is not necessarily a bad idea.

I think Europe coming together to form a bond of peace and mutual protection is a great thing. With mutual defense treaties and a combined coalition, the countries of Europe can focus more on economic prosperity and less on warfare. When deciding the balance guns and butter, they can share the guns and keep their own butter.

Free-trade is another extremely crucial attribute of the EU. This however has to be met with a balance. Breaking down the barriers between countries, both with the Schengen Agreement and the other economic agreements, the people of Europe can move and trade fairly freely with each other, promoting strong bonds and stronger economies.

Naturally, with open borders and free trade, there must be a set of ground rules to ensure the safety of all the nations involved. This however should not be led into a slippery slope of sovereignty degredation.​

This sounds like a good idea, but I am afraid that once we take back some degree of political integration, then economic integration will slowly degrade and decompose again too. So far, it has been the US presense in (Western) Europe that kept the EU together, especially via NATO. But assuming the NATO will no longer play the role it currently still is playing, because for example the US feel they have to withdraw from Europe, I see the danger that severe mismanagement or political problems in some European countries may soon result in anti-European governments who fuel and abuse nationalistic sentiments. Soon, we'll have a situation again where authoritarian national leaders blame other Europeans as scapegoats. And the whole nice project will fall apart.

Look at the eastern European countries that are outside of NATO's shield, for example, such as Ukraine, Belarus or Georgia. They more or less fall prey to informal Russian rule. And even NATO and EU countries like Latvia have some troubles with Russia. I fear the same would happen if Europe's political integration failed: Most of our countries would become cue balls for more powerful neighbors, new alliences would form in Europe -- et voilà, we'd be back to the "multipolar order" of the 19th century described above.

The only thing we can avert that is by making our integration progress irreversible -- until the idea of different Europeans going to war against each other is just as absurd as it is for Americans to imagine Yankees fighting against Southeners again.

- The more layers of government between the citizens and the politicians who make the big decisions, the less accountability the politicians have to their constituents. The Eu is simply another layer between the people and the government.

Let's say you lived in a small village (100 people) outside of a large metropolitan area. If you were having an issue with your local village governance, you could probably fairly easily get an appointment to speak with the mayor or other local official. If you had a major grievance that couldn't be solved, you could petition with your fellow neighbors, and more than likely you could get something done.

Do you think your odds of getting the attention of the mayor of the local metropolitan and ultimately enacting change would be higher or lower in the large metropolitan city? What about your county? State? Federal government? The EU? What do you think the odds of a group that you yourself started has of envoking change at the EU level? I would estimate near zero. It is a slow and clunky government that can not react to the needs of the people. Even if it could, there are far too many different types of people to represent under one set of rules.

Government is like an onion, there are many layers. More barriers between the people and the politicians mean less political accountability, more cries left unanswered, and ultimately less democracy.​

This is a very good point, and in general, I agree with it. But I think the worst problem about the EU today is its lack of democratic structures. Even when it is a new level of government, one which I consider important because of the reasons I explained, it currently is not democratically responsive to a sufficient degree.

That why I would, instead of disbandoning the EU, which is way too risky in my opinion, propose to do the best we can under these conditions: Democratize it. More power to the parliament, and let important offices be directly elected. It would be great if the different parties were running with different candidates for the Head of Commission, for example, and the outcome of the election would decide who gets the office. The commissioners could directly be elected by the respective voters in the member states, like US Senators. And so on -- there are many ideas how the EU structures could be made more democratic. It is my belief that a democratic EU is much better than no EU, even when you have more democratic influence on your local politicians.

Another idea I support has often been used by some German politicians regarding the EU: "The principle of subsidiarity". That means that a maximum of decisions should be taken on the respectively lowest level of government -- first the counties, then the states, then the nation and only finally, eventually the EU. Scale back the power of the EU and make sure only those decisions which can really be better decided on transnational level, should remain there. Everything else should go back to the lower levels. I like that idea.

- There's nothing inherent in the EU's structure that requires sharing a currency in order to function.

What is it about forming a best friends club that requires sharing a bank account? This is similar to you sharing a bank account with your neighbors. Some will be frugal with their money, some will be highly irresponsible. When you share a bank account, like when you share a currency, the stupid decisions your neighbors make will ultimately devalue your net wealth.​

I agree that it was a mistake to introduce the euro currency in 1999, the manner it was done. The officials turned a blind eye on countries that were not ready. The "stability pact" was broken again and again without consequences (even Germany broke it). And it was not made sure that fiscal and economic policies get harmonized too. That was a big mistake -- and we see the result today.

But I don't think disbandoning the euro would solve our problems. If Greece, Spain or Ireland were required to leave the eurozone, they would still have to pay back their debts in euro (or in a new Deutschmark) and they would immediately bankrupt the same moment they bring their new currencies onto the markets.

Also, I believe the euro benefited and still benefits Germany (sorry, I didn't address that above): IIRC, roughly two thirds of Germany's export trade is within the eurozone. One of the main reasons for the florishing of Germany's economy in the years after 2006 was because all the other eurozone members bought our products -- with money they had borrowed (not few from Germany). So if you want to be cynic, you might even claim we're bailing out Greece at al, in order for them to continue buying our exports.

And the worst problem I see with disbandoning the euro today is the political fallout: If the euro fails, people would all blame the EU and the project of European integration in general -- right or not -- for all resulting troubles and chaos. I'm afraid that if we give up the euro now, we would give up the entire EU. This seems like throwing out the baby with the bathwater. Considering these risks, I'd prefer giving our politicians a chance more to prove that European integration can be successful, and even be good for all of us.

We have this unique historical chance of peacefully uniting Europe today. We should better take it, because it may take a long time before we get this chance again.

 

[RabidAlpaca]

Sorry for the late response, I've had a crazy busy weekend.

Dear RabidAlpaca,

thank you very much for your detailed arguments. I have to apologize if my answer will be a little long-winded. First, I have to explain my major argument, in order to answer to your points more directly in the second half.

- Economic and political integration of European nations is the best historical answer to centuries of war, and the only way to avoid multipolar power plays along the lines we've seen in the 19th century.

Europe has a long and bloody history. We have seen the worst excesses, needless competition, arms races and eventually millions of us killed in wars in the 19th and first half of the 20th century, when nationalism reached its peak. Ideological struggles shook our nations, be that communism or nationalistic dictatorship including Nazism. Many International Relations experts said this was an almost inevitable outcome of what they call "multipolar order": No leading nation, no single empire with satellites, but many medium to small size countries competing with each other.

Nationalism was the defining ideology of this political concept. And it resulted in a slippery slope where members of one nation would not just place their nation first, but even be ready to kill and die for it eventually. Even moderate politicians had to take the nationalistic sentiments of the population into account, and they could easily be abused. And this, although the ideology if nationalism was even relatively new: It was born in the French revolution of the late 18th century and then spread over Europe during the 19th century.

With the fall of the Iron Curtain 1990/91, we are facing an amazing new situation in Europe: Our nations are all in peace, and all of us share the values of constitutional republics, of freedom. But this amazing luck is not for granted. If we let it slide, we may well see another degradation of the situation towards our dark past: Economic unrest resulting in political instability, this resulting in authoritarian shifts of government, which then results in a rivival of nationalism to rally up our peoples against the others.

It is this historic perspective that makes me believe European integration is crucial, and is worth some money on the short term -- because these costs on long term could be much worse. It's even our very future as free countries that is at stake.

Most of that could still be ensured through a coalition of willing nations, as I described. There is no reason that a currency must be shared, or that wealth must be transferred between states in order to maintain peace. As I originally stated, this only leads to divide the countries between givers and takers, and when one nation falls, we all fall.

The countries of Europe did not move towards constitutional democracies because the EU made them, that change came from within. Any important change must be from the bottom up, the people must decide. A group of few, benevolent leaders on the EU level telling everyone in Europe how to behave is the exact opposite of this.

The wars of the 19th and 20th century came from concentrated, unchecked power, and your solution is to give an organization absolute power, with zero other peer entities to check it. I find that horrifically dangerous. There is nothing to stop the EU other than the member nations revolting themselves.

That in mind, I am going to address your points:



If you argue that our nationalisms in Europe are a given, and there is nothing that could possibly balance this nationalism or form a counter-weight, I would have to agree with your reasoning. But I don't think this is the case.

It is not new at all that there are economically stronger and weaker regions within a nation, or a federation. The USA is the best example, as there are weaker and stronger states in its union. There are many more examples, not least Germany, where you have economically strong states such as Bavaria oder Baden-Württemberg, and weaker states such as the new eastern states.

Yet hardly anybody would argue that these differences are a reason why the US (or Germany) can't have national currencies. Should the US throw Mississippi or Utah out of the $US-zone? Certainly not. So where is the difference between the US and the Eurozone? It's the feeling of belonging together, a feeling of solidarity. In America, it is a certain patriotism that makes most Americans feel that they have to help and support each other, even when this does not always pay off.

It is my belief that, while old nationalism is still strong in Europe, that there is enough sense of belonging together as Europeans, united in the same values of freedom. Enough to convince our peoples to be ready for solidarity. For many young Europeans, it is self-evident to travel to other EU countries, maybe even spend a few semesters there, to look for a job there. I have Dutch, French and Spanish friends, and I get along well with them, better than with many Germans. And when you look at the larger picture, we Europeans have much more common today than divides us: Look at our neighbors, such as Russia or the Muslim world. In contrast, our differences within Europe are small.

So why not be bold and building on this European sense of togetherness?



And sovereignty is a difficult thing: You can argue that many small and a couple of medium-sized countries do not really have much sovereignty left anyway. More and more decisions that affect these countries are taken in globalized markets, in international corporations and banks. Small countries are like small boats on the ocean: They can successfully surf on a wave, and maybe take care they don't sink -- but they cannot really change the direction. Only when we pool our sovereignty, we can make a difference globally -- if we Europeans are united.

The problem is that the EU is becoming too bold. The nations are losing not only their sovereignty, but their national identity. You argue that smaller nations already have little say, and that pooling their influence is the only way to effect change, and to a degree, that's true, but sacrificing their own decision making ability in order concentrate power is dangerous. How much effect do you think the smaller nations have on EU policy? Do you think the EU is truly representing their voice? How is it any different? They're still relatively small and can effect zero change, yet they are highly restricted on the laws they can make in even their own country. They've given up power for almost nothing in return.

Europe is also FAR more diverse than the individual states in America. You don't share a language, a culture, a history, a constitution, a mindset, nothing. Yes, there are similarities, but moving from country to country you will still find radically different mind sets. Well I guess you guys do share a history, but it's a violent one, and that's hardly the bonding experience required to form a nation.

The euro still is the second largest reserve currency after the $US, and Americans, or later Chinese, Russians and others will not listen to the Czech Republic, to Austria or even to France and Germany, but they will listen to a united Europe. So by pooling our sovereignty, we actually gain more leeway than we lose. But I agree that the EU bitterly needs democratic reforms to allow for more responsiveness towards the population, if this is supposed to work.

This I've already addressed. These small nations still don't have much say in the EU, they just have given up sovereignty in exchange for little in return.

I replied to your latter paragraph above already: No, I don't think Europe is culturally too diverse. All it takes is a focus on the many commonalities we have.

There is an interested fact that should be mentioned: The US as a whole is much deeper in debts than the eurozone as a whole is. Yet the EU is in much bigger troubles than the US. And that is not because all US states are much better off than Greece. How is this possible?

It is because when the common currency was introduced, no substantial efforts were taken to harmonize the economic and fiscal policies. Especially the interest rates for government bonds were still separate for each EU country. That is why the interest rates for countries such as Greece, Ireland or Spain skyrocketed, while they remained very good for countries like Germany or the Netherlands. In the US, on the other side, there is only one single, united interest rate for the entire currency zone -- which means that the stronger states can easily keep the weaker states above the water.

This can easily be done in Europe too. The cost would be a slightly higher interest rate for the stronger states, but it would get the troubled states out of the danger. As far as I know, such an idea was proposed under the label "Eurobonds". Many European governments like that idea, but so far, it has been German Chancellor Merkel's hardline course that kept it from being implemented.

You keep bringing up the US as an example, which makes me wonder if that's really want you want for Europe. Just to let you in on some top secret information: The Americans aren't real happy with their federal government either right now. It's slow moving, wasteful, and far disconnected from the people. You want another layer on top of the local federal governments, which will be slower, more wasteful, and even more disconnected.

America is diverse, but less diverse than Europe, and our federal government still has an outrageously difficult time trying to fulfill the needs of everyone. When power is concentrated, you can only have something one way. Let's say if there's two types of people:
- One type wants to ban cats and keep dogs
- One type wants to ban dogs and keep cats

A central government simply can not make both sides happy. It either has to pick one side, ban both, or ban none. If there were two separate governments bound by a constitution, but each with individual sovereignty in legal matters, each state could implement laws to better reflect the population.

I'm German, but I feel with my fellow Europeans in other countries. And at least I would not mind to take a slightly higher burden for the German economy into account, when this significantly reduces the problems for my European brothers and sisters in other countries. Which leads me to another statement you made above:



This, obviously, depends on how you answer the question who "we" is. Why should I rather be German than European -- even when the former means deciding against the latter? Wouldn't most Americans say, too, that they are Americans first, and only then, they are New Yorkers, Californians, Southeners, Texans, etc? I don't see why I should rather feel connected with random other Germans, than with random Greek, French or Dutch people. We all are Europeans, after all, despite our differences.

(to be continued ...)

Once again bringing up the US. I don't believe most Europeans want to take it as far as becoming the United States of Europe. I'd like to provide a source but I don't believe such a poll has ever been conducted. The US isn't exactly the representative wonderland you seem to be imagining.

(...continuation)



On this point, I absolutely agree with you. As much as I dream of a united Europe where we all live in peace with similar values, I don't think this development should be forced on the European peoples. We shall do it if and when we are ready. This is why I support all measures to make the EU democratically more responsive.

Then on this point we don't have much to discuss. I would however like to point out to you that you're agreeing with me that the Euro is far more symbolic than practical. Was that your intention?

I've been basing my argument off the Euro being highly impractical and disadvantageous to the nations involved, but I haven't considered it from a symbolic angle because I personally think that's a terrible reason to implement a currency. What substantial symbolic advantage is provided that is worth all of the trouble the Euro has been so far?

 

[RabidAlpaca]

CONTINUED DUE TO CHARACTER LIMIT

This sounds like a good idea, but I am afraid that once we take back some degree of political integration, then economic integration will slowly degrade and decompose again too. So far, it has been the US presense in (Western) Europe that kept the EU together, especially via NATO. But assuming the NATO will no longer play the role it currently still is playing, because for example the US feel they have to withdraw from Europe, I see the danger that severe mismanagement or political problems in some European countries may soon result in anti-European governments who fuel and abuse nationalistic sentiments. Soon, we'll have a situation again where authoritarian national leaders blame other Europeans as scapegoats. And the whole nice project will fall apart.

Look at the eastern European countries that are outside of NATO's shield, for example, such as Ukraine, Belarus or Georgia. They more or less fall prey to informal Russian rule. And even NATO and EU countries like Latvia have some troubles with Russia. I fear the same would happen if Europe's political integration failed: Most of our countries would become cue balls for more powerful neighbors, new alliences would form in Europe -- et voilà, we'd be back to the "multipolar order" of the 19th century described above.

The only thing we can avert that is by making our integration progress irreversible -- until the idea of different Europeans going to war against each other is just as absurd as it is for Americans to imagine Yankees fighting against Southeners again.

I don't see why the EU needs any more power than what I initially described in order to keep peace in Europe. The European nations as a whole, banded together in the name of defense, can easily nip potential problems in the butt from individual aggressors.

Just as you've pointed out, anti-EU parties and governments are growing and gaining popularity, why do you think that is? The harder the EU clenches its fist, the more supporters that will slip through their fingers.

This is a very good point, and in general, I agree with it. But I think the worst problem about the EU today is its lack of democratic structures. Even when it is a new level of government, one which I consider important because of the reasons I explained, it currently is not democratically responsive to a sufficient degree.

That why I would, instead of disbandoning the EU, which is way too risky in my opinion, propose to do the best we can under these conditions: Democratize it. More power to the parliament, and let important offices be directly elected. It would be great if the different parties were running with different candidates for the Head of Commission, for example, and the outcome of the election would decide who gets the office. The commissioners could directly be elected by the respective voters in the member states, like US Senators. And so on -- there are many ideas how the EU structures could be made more democratic. It is my belief that a democratic EU is much better than no EU, even when you have more democratic influence on your local politicians.

Another idea I support has often been used by some German politicians regarding the EU: "The principle of subsidiarity". That means that a maximum of decisions should be taken on the respectively lowest level of government -- first the counties, then the states, then the nation and only finally, eventually the EU. Scale back the power of the EU and make sure only those decisions which can really be better decided on transnational level, should remain there. Everything else should go back to the lower levels. I like that idea.

Now we come to the real meat and potatoes. You have some ideas about how the EU should be run. It should be more democratic (seeing as how there's nothing democratic about it now), and decisions that can be made at the smallest level should be. But, how will this be implemented? Are you going to write them a passionate letter? Even if you got every German in Germany on your side, the politicians do not have to represent you, seeing as how it's not a democratic government. What if every Italian decided they didn't like the idea you Germans propose? What then?

That is exactly my point, you have ZERO effect on EU policy, and therefore your opinion on the matter to them is completely moot.

I agree that it was a mistake to introduce the euro currency in 1999, the manner it was done. The officials turned a blind eye on countries that were not ready. The "stability pact" was broken again and again without consequences (even Germany broke it). And it was not made sure that fiscal and economic policies get harmonized too. That was a big mistake -- and we see the result today.

But I don't think disbandoning the euro would solve our problems. If Greece, Spain or Ireland were required to leave the eurozone, they would still have to pay back their debts in euro (or in a new Deutschmark) and they would immediately bankrupt the same moment they bring their new currencies onto the markets.

Also, I believe the euro benefited and still benefits Germany (sorry, I didn't address that above): IIRC, roughly two thirds of Germany's export trade is within the eurozone. One of the main reasons for the florishing of Germany's economy in the years after 2006 was because all the other eurozone members bought our products -- with money they had borrowed (not few from Germany). So if you want to be cynic, you might even claim we're bailing out Greece at al, in order for them to continue buying our exports.

The Euro certainly can't be gotten rid of cold turkey, it would have to be in steps. However, the Greeks, among others, are having their hands held and being forced through a lengthy and damaging process of austerity, which hasn't shown to be very effective at all. Greeks are rioting in the streets and burning German flags. Still feeling like a big warm fuzzy family? Even if we assumed the EU's actions were making Greece stronger, it positively comes at a cost of making the other nation's weaker. Who is going to be the next nation to fall? Who's going to be the one's to bail them out? How many more crashes can this "tight-knit family" stand?

And the worst problem I see with disbandoning the euro today is the political fallout: If the euro fails, people would all blame the EU and the project of European integration in general -- right or not -- for all resulting troubles and chaos. I'm afraid that if we give up the euro now, we would give up the entire EU. This seems like throwing out the baby with the bathwater. Considering these risks, I'd prefer giving our politicians a chance more to prove that European integration can be successful, and even be good for all of us.

We have this unique historical chance of peacefully uniting Europe today. We should better take it, because it may take a long time before we get this chance again.

I think we'd have far more embarrassed politicians that we'd have fallout. This reminds me of the commercials I see on German TV from time to time, riddled with propaganda about how "The EU is best for all of us". That's not the general mindset that I've been hearing from the Germans I meet. If it was, they probably would be giving out so much money for such commercials.

You're holding onto the Euro out of fear that the EU will fall with it, which I believe is completely unsubstantiated. Implementing or keeping an unpopular policy out of fear is never the best option.

 

[German guy]

Sorry for the late response, I've had a crazy busy weekend.

Same for me: Sorry for the long time. I had a rather busy time and then some health problems. Now, I'm back.

Most of that could still be ensured through a coalition of willing nations, as I described. There is no reason that a currency must be shared, or that wealth must be transferred between states in order to maintain peace. As I originally stated, this only leads to divide the countries between givers and takers, and when one nation falls, we all fall.

I'd say if there was no institutional frame and no financial equalization, we'd even be more divided than we are now. The EU serves as an institutional frame that provides legal procedures to talk about problems and find compromises, even before they can become severe problems. The EU cannot be thanked enough for that. And I don't see any of this happening, if there was no economic incentive for that.

The countries of Europe did not move towards constitutional democracies because the EU made them, that change came from within. Any important change must be from the bottom up, the people must decide. A group of few, benevolent leaders on the EU level telling everyone in Europe how to behave is the exact opposite of this.

I agree on the latter sentence, but the EU has set incentives towards meeting the criteria for joining, when it comes to human right standards and democratic government. Because the EU promised membership to many central-eastern European countries, they went on a more republican path than they would have without this incentive, as you can see when you look up the Meciar time in Slovakia or the case of Croatia and Serbia, when it comes to acknowledging war crimes and handing over war criminals. You could even list many reforms in Turkey. And the extensive rights for ethnic minorities in Latvia, Estonia (mostly Russian), Hungary and Slovakia, and Romania -- all thanks to the EU, as the respective national governments enacted these laws to fit the criteria for EU membership.

On the other side, you see in Belarus and Ukraine, what happens when there is no incentive for free, democratic government. The EU is a source of democratic-republican stability. While it's true that without the support of the people, democracy would not be possible, it's also true that the EU gives incentives for the politicians to meet the standards.

The wars of the 19th and 20th century came from concentrated, unchecked power, and your solution is to give an organization absolute power, with zero other peer entities to check it. I find that horrifically dangerous. There is nothing to stop the EU other than the member nations revolting themselves.

Well, the EU may not be as democratic as desirable, but it's not true that it is "unchecked". The EU parliament has control over the Commission. The national governments, which are democratically elected, control the general direction of the EU and determine its policies directions -- and each even has a veto. If one government of a tiny member state, say Malta or Luxemburg, disagrees with certain policies, they cannot become EU goal (unless they are convinced otherwise by certain offers on other fields). And lately, it was even decided that the Head of Commission should, from now on, stem from the largest party alliance in the EU parliament.

So while democratic control of the EU could be more direct than it is, it's still not totally undemocratic.

The problem is that the EU is becoming too bold. The nations are losing not only their sovereignty, but their national identity. You argue that smaller nations already have little say, and that pooling their influence is the only way to effect change, and to a degree, that's true, but sacrificing their own decision making ability in order concentrate power is dangerous. How much effect do you think the smaller nations have on EU policy? Do you think the EU is truly representing their voice? How is it any different? They're still relatively small and can effect zero change, yet they are highly restricted on the laws they can make in even their own country. They've given up power for almost nothing in return.

Small EU countries enjoy a huge benefit within the EU institutions, as they enjoy much more power than their population or economy suggests. In the Council, for example, tiny countries such as Malta or Luxemburg (with 300,000 and 400,000 inhabitants respectively) have 3 and 4 votes, compared to a large country like Germany, which only has 29 votes (so the small states hold ca. 1/10 voting power of the largest) , although Germany harbors more than 200 times the population (with 82 million). Medium-sized countries such as France, Britain and Italy (ca. 60 million inhabitants each) have 29 votes each too, just as Germany, although they only have ca. 70% of Germany's population.

Treaty of Lisbon - Wikipedia, the free encyclopedia

You can see a similar advantage for smaller countries when it comes to the number of seats of the parliament too.

So small member countries are vastly advantaged in EU structures. They have much more influence than they'd have if their only indicator would be population and economic strength, and they can even ally to form a veto majority against the large countries (such as Germany, France, Britain and Italy). They wouldn't get remotely that influence outside of EU structures and organs.

Europe is also FAR more diverse than the individual states in America. You don't share a language, a culture, a history, a constitution, a mindset, nothing. Yes, there are similarities, but moving from country to country you will still find radically different mind sets. Well I guess you guys do share a history, but it's a violent one, and that's hardly the bonding experience required to form a nation.

I disagree. I'd even argue the US is much more diverse than the EU countries in Europe: You have various "white" Americans, from EU countries such as Ireland, Germany, Britain, Italy and so on -- Irish Americans, German-Americans, English-Americans and Italian Americans. But on top of that, you even have many non-European groups in America, such as Asian Americans, Latin American Hispanics, and not least African Americans. All the ancestors of today's Americans came arguably from places much more diverse than Europe is today.

Europe today, on the other hand, has always shared commonalities, as "the Western civilisation" or "the Occident": No matter where in Europe you are, when you study philosophy, you'll start with the ancient Greeks, then some Christians in the Middle Ages, until the Age of Enlightenment. Likewise when it's about high art: High art, be that painting or music, has always been pan-European. One artist would borrow from another European artist, no matter where they lived in Europe. Bach's music would not have been possible without the Italian baroque, and 19th century Italian and French opera would not have been possible without Mozart or Beethoven. Likewise, French and British philosophers Montesquieu and Locke would not have been possible without Greek Aristotle, or one another.

And today, we're already very similar in Europe: We watch the same tv series and movies mostly (generally American), listen to the same music (mostly American and British) and eat the same fast food (mostly McDonalds and Burger King). We share the same values of freedom and republican government. And we share the common heritage of Greek-Roman ancestry, Christianity and Renaissance/Enlightenment.

I don't think we're more diverse in Europe than people are in America.

This I've already addressed. These small nations still don't have much say in the EU, they just have given up sovereignty in exchange for little in return.

I disagree. Like I explained above, the small nations get much more attention within the EU, than they'd ever get if they were outside.

You keep bringing up the US as an example, which makes me wonder if that's really want you want for Europe. Just to let you in on some top secret information: The Americans aren't real happy with their federal government either right now. It's slow moving, wasteful, and far disconnected from the people. You want another layer on top of the local federal governments, which will be slower, more wasteful, and even more disconnected.

Maybe I'm wrong, but my impression is that the claims about state secessions in the US are vastly exaggerated. I believe in the end of the day, most Americans agree that's it's great they are Americans, and that it's great their country is united. Of course you'll always find secessionists, but my guess is that they're not really numerous and they are not really be taken seriously.

America is diverse, but less diverse than Europe, and our federal government still has an outrageously difficult time trying to fulfill the needs of everyone. When power is concentrated, you can only have something one way. Let's say if there's two types of people:
- One type wants to ban cats and keep dogs
- One type wants to ban dogs and keep cats

A central government simply can not make both sides happy. It either has to pick one side, ban both, or ban none. If there were two separate governments bound by a constitution, but each with individual sovereignty in legal matters, each state could implement laws to better reflect the population.

Agreed. That's why such peculiar questions should remain at the level of the member states to decide.

Once again bringing up the US. I don't believe most Europeans want to take it as far as becoming the United States of Europe. I'd like to provide a source but I don't believe such a poll has ever been conducted. The US isn't exactly the representative wonderland you seem to be imagining.

The US is certainly not perfect, but I'd argue that it works well, despite all shortcomings. The US has mastered more severe crisises than the one we're in now. IMO, it's still a pretty good example, despite all problems.

Then on this point we don't have much to discuss. I would however like to point out to you that you're agreeing with me that the Euro is far more symbolic than practical. Was that your intention?

I've been basing my argument off the Euro being highly impractical and disadvantageous to the nations involved, but I haven't considered it from a symbolic angle because I personally think that's a terrible reason to implement a currency. What substantial symbolic advantage is provided that is worth all of the trouble the Euro has been so far?

I'd say the main problem was not the introduction of the euro currency, but the failure to harmonize fiscal policies in the member states and the lack of mutual, common interest rates for government bonds. The US has harmonized budgets between the member states and common interest rates, else states such as Mississippi or Utah would have dragged the $US currency into a similar abyss Greece is threatening to draw the EU in.

We know now that a common currency without common interest rate for government bonds and harmonized fiscal policies does not work. So we should introduce those. The euro currency zone as a whole is less in trouble than the US is. We're only more vulnerable, because we've attempted a weird hybrid version of unification and independence. I'd say, let's risk more unification.

The advantages of a shared currency, when done properly, are obvious: A shared fiscal policy would lead to better fiscal policies. Companies doing business in several member states would have much less trouble about different currencies and exchange rates. People travelling from one to the other country would have much less hassle too. And finally, it would bind European nations closer together, making sure we don't repeat our history.

(To be continued ...)

 

[German guy]

(... Continuation

I don't see why the EU needs any more power than what I initially described in order to keep peace in Europe. The European nations as a whole, banded together in the name of defense, can easily nip potential problems in the butt from individual aggressors.

I'd say that the EU cannot live from mere lip service. It needs hard facts to prevent its members to drift apart. That's why the very first precursor of the EU, the "European Community of Coal and Steal" fused the heavy industry of France, West-Germany, Italy and the Benelux states in the early 50s, submitting them under a united commission -- to make sure that these states are so closely tied together that they'll never be able to wage war against each other again.

I may be very idealistic, when it comes to the goal the EU can achieve. But I'm not blind to the fact that idealism alone won't do the trick, and won't keep the EU from disintegrating.

Just as you've pointed out, anti-EU parties and governments are growing and gaining popularity, why do you think that is? The harder the EU clenches its fist, the more supporters that will slip through their fingers.

I'd not over-estimate the influence of anti-EU parties in EU member states. Asfaik, they don't reach more than 20% of the votes anywhere -- and in these cases, they aren't mere anti-EU parties, but far-right and/or populist parties with other platform points inspiring people to vote for them, such as anti-Islam stances or far-right opinions. Examples are the "National Front" in France, the "Freedom Party" in the Netherlands or the "Bond for the Future of Austria" in Austria -- they are anti-EU, but not exclusively. In Germany, the non-far right anti-EU party AfD does not inspire more than 3% of the voters to vote for them, according to polls.

So in the end, you don't really have more than 20% of people who are sufficiently euro-skeptic to vote accordingly. That means, on the other hand, that ca. 80% are either pro-EU, or at least not sufficiently motivated to do much against the EU.

I wonder: Is the number of secessionists in the US really lower? And if it is not, don't most Americans think they don't really deserve much attention?

Now we come to the real meat and potatoes. You have some ideas about how the EU should be run. It should be more democratic (seeing as how there's nothing democratic about it now), and decisions that can be made at the smallest level should be. But, how will this be implemented? Are you going to write them a passionate letter? Even if you got every German in Germany on your side, the politicians do not have to represent you, seeing as how it's not a democratic government. What if every Italian decided they didn't like the idea you Germans propose? What then?

That is exactly my point, you have ZERO effect on EU policy, and therefore your opinion on the matter to them is completely moot.

I don't think I have any more, or any less influence on EU policy, than on the policies of my national government. As I explained above, the EU is not totally illegitimate or unresponsive, democratically, although more democracy would be appreciated.

But I am confident that the EU leaders (which still are, above all, the national governments, not the EU offices) will have to take their citizens into account, if they don't want more people to turn euroskeptic or anti-EU. A first sign seems to be the decision that the Head of Commission will have to be from the largest faction in the EU parliament in the future. I suspect more such steps are going to follow.

The Euro certainly can't be gotten rid of cold turkey, it would have to be in steps. However, the Greeks, among others, are having their hands held and being forced through a lengthy and damaging process of austerity, which hasn't shown to be very effective at all. Greeks are rioting in the streets and burning German flags. Still feeling like a big warm fuzzy family? Even if we assumed the EU's actions were making Greece stronger, it positively comes at a cost of making the other nation's weaker. Who is going to be the next nation to fall? Who's going to be the one's to bail them out? How many more crashes can this "tight-knit family" stand?

As I said, none of that would be a problem, if the eurozone decided in favor of common, shared interest rates for government bonds. That's what keeps the $US above the water, although the US debts are much worse than those of the Eurozone in its entirety. The problem was a lack of unification, not too much of it.

I disagree with German Chancellor Merkel's stance on the euro crisis. She should exploit and fuel nationalistic sentiments, but instead push for a better solution that takes the interests of all EU members into account. I explained that above: As we're all Europeans, I don't see why one of us should matter less, just because he lives in a different state.

If you prefer a fellow German over a Greek or Italian is merely an arbitrary decision. Likewise, why should a New Yorker, Texan or Southener prefer America over his state? Or why should I, as a Berliner, prefer Germany over Berlin, and not call for a dissolution of the German federalism?

I think we'd have far more embarrassed politicians that we'd have fallout. This reminds me of the commercials I see on German TV from time to time, riddled with propaganda about how "The EU is best for all of us". That's not the general mindset that I've been hearing from the Germans I meet. If it was, they probably would be giving out so much money for such commercials.

My impression with common Germans is, that they like the idea of European integration, as long as it seems to work out fine for them, as long as they see a benefit. I'd argue that Germany has benefited a lot from both the EU and the euro currency in the past years, even if we're in tougher times right now. I'm confident that in the end, we'll see that the EU is for the benefit of all of us in Europe, even if the current crisis seems to suggest otherwise.

You're holding onto the Euro out of fear that the EU will fall with it, which I believe is completely unsubstantiated. Implementing or keeping an unpopular policy out of fear is never the best option.

I don't think it's just fear. Abandoning the euro currency would be most unprofitable for Germany, as a new study suggests:

Forscher warnen vor Folgen eines D-Mark-Comebacks - SPIEGEL ONLINE
(Sorry, the link is in German, but I know RabidAlpaca speaks German very well, so I guess it should be okay.)

According to this study by Bertelsmann Foundation, German growth would be at least 0.5% lower without the euro currency, which means at least 200.000 jobs less. Without the euro, the national income would be 1100 euro lower per capita in Germany. As far as the prognosis goes, Germany wins 1.2 billion euros between 2013 and 2025 due to the euro (assuming it persists), which is an even higher number than all credits Germany has granted to other countries so far -- so Germany would even benefit, if none of these credits was ever paid back, which is very unlikely.

So abandoning the euro currency would even be more expensive than keeping it, on the long run. Even very national-egoistic interests support the idea of maintaining it.

 

[German guy]

Small correction for the last posting: Germany's benefit would not just be 1.2 billion, but 1.2 trillion. As RabidAlpaca can probably confirm, this is a language barrier problem, as "millions" translated "Millionen" in German, "billions" as "Milliarden" and "trillions" as "Billiarden". Sorry.