How the EU Was Designed to Indebt the Smaller Countries to the Larger
Executive Summary
- The largest countries designed the EU in the EU to serve their needs.
- We cover how the EU has done exactly what it was designed to do.
Introduction
The EU was introduced using a large number of false claims. The intent of the EU was always for the large EU countries to subordinate the smaller countries.
Our References for This Article
If you want to see our references for this article and other related Non Status Quo articles, see this link.
Time Phased Public Debt to GDP Ratio for European Countries
From Wikipedia.
This is another view on debt to GDP for European countries, but this shows the ratio as time passes. Here are some observations.
Overall, the debt to GDP ratio is increasing. And there is a specific reason for this which Steven Keen explains.
It turns out countries are promoted to borrow money as the EU cuts off other options for European countries, such as a freely floating currency or controlling their own fiscal policy. The EU rules end up with the less economically successful countries becoming indebted to the more successful countries.
Another feature of the time-phased public debt to GDP ratios is that the more economically successful countries tend to have a higher debt to equity ratio.
Pushing Countries into Debt
Some countries that have gone into decline, such as Bulgaria, Spain, Portugal, and Greece, have rising debt levels. These countries are bleeding out their populations as they can often not find work in their home country. In return for loans from the EU, the EU demands austerity, which means no deficit spending. This is the policy even though there is no evidence that public debt is negative for economic growth. As we cover in the article, Is High Private and Public Debt Negatively Related to Economic Performance?
This austerity policy strongly negative for these countries, which leads them to have to drop their economic growth more. Steve Keen also points out that some countries like Greece and Spain are made to follow more austerity by the EU, while Italy is not because the PM of Italy is an EU bureaucrat. This means that the policy changes depending upon how connected and compliant the country’s leadership is to the EU. Naturally, a country that was to critique the EU would be punished and made to fall more austerity than if it censors criticism of the EU.
Destabilizing Countries With Austerity
This is another feature of the EU rules: destabilizing countries and making their populations flee to look for opportunities. This is why countries like Italy are trying to lure people back to the countryside with the offer of free or nearly free houses (houses that have been abandoned). The EU has negatively impacted both Southern Europe and Central Europe using these tactics. The EU rules were largely written by Germany and France and were set up to dominate the other countries in the EU.
What can be taken from the time-phased private debt to GDP ratio graphic is that while more successful economies tend to have a higher debt to GDP ratios than less successful, an increase in debt over time reflects a declining economy.
Predicted Before the EU Began
Everything that has happened regarding weaker economies was predicted in 1992 by Wynne Godley in Maastricht and All That.
These quotes are from this article.
The central idea of the Maastricht Treaty is that the EC countries should move towards an economic and monetary union, with a single currency managed by an independent central bank. But how is the rest of economic policy to be run? As the treaty proposes no new institutions other than a European bank, its sponsors must suppose that nothing more is needed. But this could only be correct if modern economies were self-adjusting systems that didn’t need any management at all.
What happens if a whole country – a potential ‘region’ in a fully integrated community – suffers a structural setback? So long as it is a sovereign state, it can devalue its currency. It can then trade successfully at full employment provided its people accept the necessary cut in their real incomes. With an economic and monetary union, this recourse is obviously barred, and its prospect is grave indeed unless federal budgeting arrangements are made which fulfil a redistributive role. As was clearly recognised in the MacDougall Report which was published in 1977, there has to be a quid pro quo for giving up the devaluation option in the form of fiscal redistribution. Some writers (such as Samuel Brittan and Sir Douglas Hague) have seriously suggested that EMU, by abolishing the balance of payments problem in its present form, would indeed abolish the problem, where it exists, of persistent failure to compete successfully in world markets. But as Professor Martin Feldstein pointed out in a major article in the Economist, this argument is very dangerously mistaken. 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.
It needs to be emphasised at the start that the establishment of a single currency in the EC would indeed bring to an end the sovereignty of its component nations and their power to take independent action on major issues. As Mr Tim Congdon has argued very cogently, the power to issue its own money, to make drafts on its own central bank, is the main thing which defines national independence. If a country gives up or loses this power, it acquires the status of a local authority or colony. Local authorities and regions obviously cannot devalue. But they also lose the power to finance deficits through money creation while other methods of raising finance are subject to central regulation. Nor can they change interest rates. As local authorities possess none of the instruments of macro-economic policy, their political choice is confined to relatively minor matters of emphasis – a bit more education here, a bit less infrastructure there.
The EU has locked down the options for smaller member countries. This is what explains the long-term economic problems in both Southern Europe and Eastern Europe. In this way, the EU can be seen as a type of colonialism. However, it is one which each of the countries enters voluntarily, and this is because they have been misled as to the actual benefits of the EU.
Steve Keen debates the EU.
And again here.
Conclusion
The EU was designed in one specific way and then marketed the opposite way to get unsuspecting countries to join. Once in, it is nearly impossible to leave. And the EU polices the leaders of each European country to be pro-EU. The evidence of this is found in the double standards of treatment by the EU towards Italy (a leadership “friendly” country) and Greece and Spain (leadership “unfriendly” countries). In essence, the EU is much like a monopolistic software vendor. These software vendors get into companies by overpromising. Once the executive decision-makers have bought from them, they are locked into the software salespeople’s lies. The executive decision-makers both cannot admit they made an error but are locked into repeating the sales team’s lies. As the EU begins to roll out its programs and rules for a country, just as a software vendor installs its software, it becomes increasingly locked into the EU. After several years, the bad performance of the EU no longer matters because the country is not allowed to ask the question of whether the EU is beneficial.
That is one of the main purposes of the EU is to continue to perpetuate the EU and the EU’s control — which extends to the most powerful countries in the EU. England was able to exit the EU, but only with great effort, and England is one of the most powerful countries in Europe. It is unlikely that a less powerful country could successfully leave the EU. And one should note that the anti-EU individuals are generally considered to be uneducated and to have low intelligence, and even racists. In contrast, pro-EU individuals are considered to be enlightened internationalists.