Monday, June 09, 2003

Converging on Zero: Euroland turns into a no-growth zone

Watching English television last week I heard something amazing: an economist said what few in Europe have been willing even to consider. There, for all to hear, the distinguished fellow said that the signs are clear and they’re telling a story that the official (i.e. EU and government paid) economists are not to mention. He said that the Eurozone economy is converging on a normal growth rate of probably less than one percent.

And then suddenly I saw the same thing being said on French television. It appears that, slowly but surely, the news is getting out. Of course the economists at the European Central Bank would never admit this. But then these same economists consistently overrate the growth of the Euro-economy. Indeed, I have never heard of one time when their predictions were even close to, or short of the actual numbers – as far as I can remember, they’re always too high.

But there was more. The economist let another cat out of the bag when he said that, according to all reasonable standards, the economic – not to mention the political - integration of East Germany into the West German Federal Republic has largely been a flop. Unemployment in the region remains at 20%, and, in general, economic development in the area remains far behind that of the rest of Germany.

Still, the official word from Brussels is that all is well. Indeed, it seems so well that the EU thinks it can absorb the still comparatively underdeveloped economies of the former Soviet bloc nations into the grand new Europe. That this is not true is becoming increasingly evident.

What is more interesting perhaps is that economic growth in Europe now, under the EU, is lower than it was during the boom years of the 1950s to the 1970s, the very period when the US protected western Europe, the very period when co-operation among Western Europe’s nations was more important than subsuming themselves under a centralized bureaucracy in Brussels.

So what’s changed? The change is that the powers-that-be in Brussels seem determined to turn Europe into an economic competitor to the US, rather than the partner Western Europe once was. Another nation once tried this approach and it was called the Soviet Union. The Soviet leadership was determined to show up the US, to prove that its economic system was superior to that of the Americans. In doing so, they, like the Brussels officials, repeatedly fudged the reports on the state of the Soviet economy. The Soviets also did something else – they spent a great deal of time expanding into their neighbors’ territories, or at least trying to. Though this was part of the traditional Russian imperial pose, it was also intended to advance communist values as well as provide the Soviets with evermore lands to use in its doomed effort to challenge the American economic model. Today, the EU engages in practices not unlike those of its Soviet predecessor. The question then must be asked: When are the Europeans going to finally wake up and see that they’re busy rebuilding the Kremlin in the heart of Brussels? Not possessing a crystal ball, that is a question I’ll leave to the Europeans, but maybe the realization will soon sink in as they find that their economies are fast bogging down and their moralizing European empire has nothing but illusions to offer.


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