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Europa: Geopolitical Experimentation in Troubled Waters with Resurgent German Beast

--Cutting-Edge Analytics--

By: Franklin Otorofani
 Published February 22nd, 2012

All is not well with Europa—the great Europe. Europe is economically sick to her bones and lying prostrate on her sick bed surrounded by her best physicians fighting to save her precious life that has given the world so much and taken so much from the world. Her strength has become her weakness and her ship of state is headed in the wrong direction and trapped in turbulent sea. Turning this ship around has proved excruciatingly difficult even if not altogether impossible. But make no mistake about it. EU will overcome its present economic woes, seize and dominate the world stage once again. Make no mistake about it. There will be no power on earth greater than the EU. And behind it lurks the ambitions of ascendant Germany dictating the tune from Brussels with France in tow while Britain looks on bemused from the sidelines.---Franklin Otorofani

Still smarting from the withering massive air bombardments of Britain by an all-conquering Germany—the Blitzkrieg, and the horrors of the WWII, alarmed British Prime Minister, Winston Churchill, in 1946, called for “United States of Europe,” no doubt influenced by the power, might, and, above all, single-mindedness of the United States of America (USA) in the war that helped overcome Adolf Hitler and liberate Europe from the crushing jaws of a demonic megalomaniac. This led three years later to the formation of the Council of Europe in 1949 with 47 member states. It is the first multinational, pan-European organization to grace the face of Europe. It is comprised of the European Council of Human Rights, which enforces European Convention on Human Rights, and European Pharmacopoeia, which set standards in pharmaceutical products, is however not a political union in the nature of the present EU, which was the ultimate goal of Europe as envisioned by Churchill and other European statesmen. The reason behind this is, of course, the burning desire of Europeans to prevent yet another future European war that would be passed off as WWI and WWII that had devastated Europe and much of the world.

On February 7, 1992, European leaders gathered in Maastricht," Netherlands, to sign the Maastricht Treaty, formally known as the Treaty on European Union (TEU). This treaty formally birthed the European Union (EU) and its official currency, the Euro. It came into force on November 1, 1993. The Maastricht Treaty conferred consolidated legal personality on the EU exercised through three distinct organizational/legal frameworks, namely, (1) the European Communities, which consisted of the European Community (EC) itself, the main body, the European Coal and Steel Community, (ECSC which expired in 1952), and the European Atomic Energy Community (EURATOM), (2) the Common Foreign and Security Policy (CFSP) responsible for foreign policy and military issues and, (3) Police and Judicial Cooperation in Criminal Matters (PJCC), in charge of crime fighting. These were the three Pillars of the European Union.

However, the TEU underwent several amendments in the Amsterdam Treaty of 1999 and the Treaty of Nice in 2003 because this institutional structure was obviously unwieldy and cumbersome to navigate, and calls for reorganization of the TEU became louder. In 2009, just like Winston Churchill before him, German Foreign Minister, Joschka Fischer, in Nice, France, called for the simplification of the Treaty. In 2009 the The Lisbon Treaty came into force. It abolished the Pillar structure of the TEU. With it emerged a consolidated legal personality in the “Union” rather than in the “European Communities” (EC) as was the case previously. Three distinct structures replaced the former Pillars, namely Exclusive Competence, Shared Competence, and Supporting Competence, which in practical terms allocated and redefined the jurisdictions of the Union and its member states, much like the case in federal and con-federal constitutions.

It is the EU that is now a member of international organizations like the World Trade Organization (WTO), for instance, rather than individual member states. Thus for example, “The Union has exclusive competence to make directives and conclude international agreements when provided for in a Union legislative act.” This “Competence” allows the “Union” to enter into treaties and binding agreements with both EU and non-EU sovereign states as though the Union itself were a sovereign state. With this Competence the Union has negotiated and signed trade agreements with the United States, Canada, Russia, China, and several African, Asian and Caribbean nations.

The Union also has Exclusive Competence over Customs union, monetary policy for member states that has the Euro as its currency, commercial policy and conservation of marine resources as well as the establishment of rules of competition in internal trade within the union. Of course there are areas of “Shared” and “Supporting” Competences that I wouldn't bother to go into here. Therefore, any nation dealing with EU member state must understand these “Competences” rather than its preexisting “Pillar” structures. Today, the EU is easily the most powerful supranational body in the world having unrivaled power, breadth, depth and reach. According to the International Monetary Fund (IMF) the EU boasts of USD$17.960 trillion in 2011 in GDP, which makes it the largest economy in the world surpassing even the mighty US by a trillion or two dollars. And that is a watershed. EU could boast of being the world's biggest economy, followed by the US, China, and Japan in that order.

When EU speaks it is not just one nation but 27 nations in the most industrialized and most advanced continent combined, speaking. That is the weight that the EU carries in our contemporary world. Imagine the EU bringing such weight to bear on a small nation in a developing country when bigger nations can't even stand in her way. Imagine what impact that would have on global issues and international relations. The playing field is no longer level, not that it ever was, but weighted heavily against smaller nations, especially against the so-called third world in international intercourse. That is what is happening today with EU's new sanctions on Iranian oil imports. It is not just one nation but all EU member states that would embargo Iranian oil imports simultaneously. How could a small or even big nation for that matter stand in the way of the EU in matters of bilateral relations? When EU moves against a nation it moves like a Goliath and crushes its victim, like Iran. The only individual nations that can effectively take on the EU today without getting crushed in the process are the United States, Russia, China and Canada; the rest are more or less ants to be trampled upon by the elephantine EU, including I might add, its own individual member states such as Greece, Italy, and Spain. With a stroke of the pen EU has decapitated European nations and made them to become subservient to her wishes, robbing them of their national characters and nationalities by imposing a one-size-fits-all regimen that all must comply with in practically all spheres of life. Though carried out democratically, Europe has become one huge political monolith just like the former Soviet Union, dictating to, and controlling vassal states from Brussels. This, no doubt, is bound to stultify, at least to some degree, individual character and genius of the member states as the integration virus sinks its teeth deeper and deeper into Europa. What is emerging in EU is not a confederation but a stealthy or creeping federation being carried out incrementally when opportunities show up. A new form of dictatorship is unfolding before our very own eyes. All of Europe is being beaten into line like zombies and diversity in political, cultural and social spheres is being gradually squelched and replaced by drab uniformity. The soul of Europe is dead.

With just 6 member states in the beginning the EU has steadily grown its membership to 27 defanged sovereign states with countries like Turkey and others waiting in the wing to join, with combined population of 490 millions. With the fall of communism in particular, East European nations raced to join both NATO and the EU in droves, including, of course, Aristotle's and Plato's Greece, the birthplace of democracy, which is the epicenter of the economic seismic tremors currently buffeting Europe.

All is not well with Europa—the great Europe. Europe is economically sick to her bones and lying prostrate on her sick bed surrounded by her best physicians fighting to save her precious life that has given the world so much and taken so much from the world. Her strength has become her weakness and her ship of state is headed in the wrong direction trapped in turbulent sea. Turning this ship around has proved excruciatingly difficult even if not altogether impossible. Like every malignancy it starts from some infected organs of the body and spreads to other organs and eventually overtaking the whole body. Should Europe cut off her infected finger(s) to protect and save her other organs or keep it and heal it no matter how long it takes to heal? That is the multi-billion euro question Europe is currently grappling with no clear cut answers. I guess the answer depends on how badly infected the finger is and whether the affected finger(s) is in fact healable or not. This has been complicated by other geopolitical forces at play encumbering the decision making process itself.

It is no longer news to euro watchers and those sufficiently keyed into global affairs in general that the steady stream of news coming from the bowels of the euro-zone since last summer has gone from bad to worse. It has, in fact, hit a wintry patch. Just when the beleaguered Greeks thought they had fulfilled all the conditions and had swallowed the bitter pills contained in the highly unpopular austerity measures imposed by Brussels to enable her receive the $171bn second tranche of bailout loan from Brussels, Germany, once again acting through Brussels, threw spanners in the wheel by prescribing even more bitter pills that Greece must be made to swallow or else sink like a rock cast into the sea. Must it be the case that each time an installment of the bailout to Greece falls due new and even harder conditions would suddenly pop up from Brussels at the promptings of Germany to humiliate Greece? The Greeks have borne all kinds of humiliation in the hands of Brussels and I might add, Italy, too. Greece professionals are fleeing their beloved country to other European capitals, Canada, and the United States in droves with extreme bitterness burning in their hearts. I hear it in radio and television interviews and you could actually touch the anger and bitterness radiating out from the core of their beings. What better evidence of that than the violent street protests in Athens and Rome?

It appears that the real goal of Brussels is entirely political using economics as a pretext and that goal is to bring both Greece and Italy to their knees and rob them of their sovereignty. Both nations have been forced to replace their Prime Ministers just to please Brussels. But even that is not enough. Brussels has demanded and obtained harsher austerity measures from both nations which has reduced teachers' salaries by as much as 30% in Greece and the complete gutting of other social programs in the new austerity measures that has lit up the streets in Rome and Athens in violent protests. Now once again, Greece has caved in to the Brussels blackmail rather than boning up to it. Why? Because she has $14.5bn debt repayment due in March hanging over her head of which default would be catastrophic not only to Greece but the EU and the world economy at large. Not complying with the demands of Brussels to obtain the bailout is therefore not an option. It would mean taking the hard political decision to quit the EU altogether and strike out on her own terms which could enable her to quit the Euro, devalue her currency to boost exports and even print money, for crying out loud. Unfortunately, all of these options are currently not available to Greece and Italy, because they are tied to the almighty euro by choice and pulling out now would be painful and complicated politically. Talk about looking well before leaping!

The question then is why is Brussels this hard on Greece and Italy when the so-called bailout is after all, a loan that would be repaid by Greece and Italy rather than grant or gift? Must a nation suffer so much just to get a loan from her own supposedly parent supra-nation? African nations that are always hungry for loans from Europe and America via IMF and World Bank must take note of this. Brussels says it is meant to whip these profligate countries with huge, unsustainable social programs into line and rein in budgetary overloads that fund an avalanche of entitlement programs with borrowed money from the capital markets. That is a mighty good argument and incentive, which by the way, I would commend to the Obama administration in the US that appears bent on going the way of Greece and Italy with the enlargement of entitlement programs on borrowed money from China in the face of huge budget deficits and debt overhang as evidenced in the Obama's 2012 budget just announced, loaded with deficit spending. In line with that Brussels is proposing setting limits on budget deficits for member nations that would involve an amendment to the present EU treaty. And the facts seem to support this position. Consider this data from Eurostats newsrelease euroindicators:

“In 2010 the largest government deficits in percentage of GDP were recorded in Ireland (-32.4%), Greece (-10.5%), the United Kingdom (-10.4%), Spain (-9.2%), Portugal (-9.1%), Poland (-7.9%), Slovakia (-7.9%), Latvia (-7.7%), Lithuania (-7.1%) and France (-7.0%). The lowest deficits were recorded in Luxembourg (-1.7%), Finland (-2.5%) and Denmark (-2.7%). Estonia (0.1%) registered a slight government surplus in 2010 and Sweden (0.0%) was in balance. In all, 21 Member States recorded an improvement in their government balance relative to GDP in 2010 compared with 2009 and six a worsening.”

This means that collectively EU member states indicated above have been operating budget deficits in the region of 6.4% of their GDP; in other words, living on borrowed funds much of which routinely went to entitlement programs. It is, in fact, immoral to borrow funds from the capital markets to subsidize housing, food, medical, and other services for citizens in the name of helping the poor. This is the thread that runs through all welfare, nanny states that are now imploding in Europe, like Greece, Italy, Ireland, and Spain. Now the chickens are coming home to roost because what goes around comes around. You certainly don't need to be a Nobel Laureate in economics to understand that such an essentially government dependent social development model is totally flawed and utterly unsustainable. It's akin to a large family constructing its source of livelihood and survival model on the foundations of borrowing from its neighbors rather than earning its upkeep.

As we have seen in Greece, Italy, and yes, Nigeria, however, when citizens are weaned on a diet of government subsidies they are prepared to lay down their lives to maintain the status quo and any attempt to change the situation would be resisted with the last drops of their blood. Greeks, Italians, and yes, Nigerians protesting and rioting in the streets because of government withdrawal of subsidies gives should give the reader an idea of what happens when a people are raised on subsidies on borrowed money. Whatever happened to the Chinese adage that states that if you give a man a fish you feed him for a day, but if you teach him how to fish you feed him forever! Certain European governments and the Obama administration seem interested only in giving men fishes to feed them for a day but not keen on teaching them how to fish. So families are wedded to living off the so-called public assistance all their lives. And that is sad. The big question is who pays for it? This is where Greece and Italy wound up in the debt crisis and, I might add for good measure, the US, too, that has racked up $16 trillion in debt.

There is no question, therefore, that deficit budgeting that has provoked sovereign debt crisis is responsible for Europe's economic woes and a huge drag on its tepid economic growth. Europe, once the envy of the world and bastion of imperialism whose colonial exploits touched the four corners of the earth that helped to shape our modern world, is currently on the decline, at least economically. According to available statistics, growth rate in the euro-zone is a mere 1.8% of GDP with unemployment as high as 9.3% as of May, 2011. The euro-zone is the least growing region in the world, even lagging behind Africa, the traditional no-growth region. IMF's Regional Economic Outlook projections states:

“This edition of the Regional Economic Outlook hence projects growth for all of Europe to slow down from 2.4 percent in 2010 to 2.3 percent in 2011, and further to 1.8 percent in 2012 (Table 1)”, and further adds that “Real economic activity in advanced Europe is projected to expand by 1.6 percent in 2011 and 1.3 percent in 2012.”

This pales into insignificance when contrasted with IMF's 2012 projection of 7% growth rate in GDP for Asia and Pacific Region. While 2012 projection is not available, 5.5 percent was projected for Sub-Saharan Africa in 2011, which was easily attained. Compounding all of this is the downgrading of credit rating of Greece and Italy by Moody's and Standards and Poor's. As we all know credit rating determines to a great extent whether an individual or a nation would have access to credit as well as the interest rate. A low credit rating could practically dry up credit lines to individuals, corporate and sovereign entities.

As if this is not enough bad news for Europe, it has plunged headlong into Middle-Eastern geo-political conundrum by slamming oil exports sanctions on Iran due to come into effect in June, this year. Getting ahead of Europe, Iran has preemptively retaliated by slamming oil export bans on two major European nations namely France and Britain, no doubt seen by Iran as the two most hostile and belligerent nations toward her. If this Iranian oil sanction proves true, it would be a double whammy and utterly devastating for Europe that is already on the brink. It appears Europe is headed downhill at a time other regions are recording economic growth largely by its own making. No thanks to welfarism.

But make no mistake about it. EU will overcome its present economic woes, seize and dominate the world stage once again. Make no mistake about it. There will be no power on earth greater than the EU. And behind it lurks the ambitions of ascendant Germany dictating the tune from Brussels with France in tow while Britain looks on bemused from the sidelines.

It is not in the least fortuitous that Germany and France are calling the shots in EU. The EU itself was founded originally only by six nations, namely, France, West Germany, Italy, Belgium, Netherlands and Luxembourg collectively known as the “inner six.” Its first enlargement came in 1973 with the UK, Denmark, Portugal, Spain and Ireland joining before it gradually grew to its present 27-member states. So you have a situation of founders and joiners in play here. However, although West Germany was puny compared to France and the others during its founding, Germany has since surpassed the the rest in population size and the economic power since the merger of West and East Germany in the 1900s after the fall of the Berlin Wall consequent upon the collapse of the Soviet Empire. Today Germany is the alpha male in the EU and the one doling out the bailouts from Brussels with all the political strings attached. In league with France, and with Britain willfully on the sidelines there is no stopping Germany in using the EU as veritable springboard to global power yet again.

How will Germany achieve this? No one knows for sure but here is a credible and plausible road-map for Germany. As indicated above, under the pretext of reining in budgetary profligacy, the EU is set to remove the last shred of state sovereignty from its member states by taking over the core function of their parliaments in budgetary matters. In other words Brussels will have the sovereign authority to vet the budgets of member states before they are passed into. If and when that proposition is carried through Brussels would have authority to dictate to member states what should or should not go into their annual budgets. Except for the UK and Czech Republic all member states of the EU are set to sign the so-called “Fiscal Compact” deal which is a fiscal union of the member states that was finalized on January 30, 2012. When you add that to the Exclusive Competence that Brussels already enjoys over member states, it effectively reduces member states into vassals of Brussels and whoever is in control of Brussels will ipso facto naturally be in control of the whole of Europe. Period! Right now there is none better positioned than Germany to do so and that's why Germany is calling almost all the shots in EU today.

The practical implication of this is that EU has once again provided Germany with the platform to bounce back into global affairs and no one knows where this will lead to given Germany's belligerent past. Germany has been responsible for two world wars and a third one is certainly within the realm of possibility. Today, Germany has dominated Europe economically and technologically, and it is only a matter of time, when not if, before it dominates the world. For now, she deceptively maintains anti-militarist policy just like Japan due to conditions imposed by Allied Powers at the end of WW11. But all of that could become ancient history, because as the world had witnessed in the past, conditions or no conditions, Germany is capable of arming herself to the teeth under the nose of the western powers and deal a crushing blow to the world. There is no reason not to envisage Germany using the present EU's 27-member, European Defense Agency (EDA) as cover to rise up militarily to challenge the status-quo.

Presently, NATO is gradually becoming irrelevant as EU asserts itself militarily and the EDA is on track to supplant NATO so far as the defense of Europe is concerned. It is only a matter of time that NATO is pushed out of the way because NATO members are after all, EDA members as well. Already, the euro has successfully challenged the almighty US dollar as an international currency just like the dollar. It is the only currency in the world that is capable of challenging the dollar and act as the world's reserve currency just like the dollar. What the dollar did to gold the euro is poised to do to the dollar. With the Soviet threat gone once timid and once divided Europe, weakened by endless internecine wars is increasingly asserting her independence from the United States once her savior and protector, taking direct charge in her defense and security as well as foreign policy without reference to and in fact sometimes in direct opposition to the United States. There have been trade spats between the US and EU, which was unthinkable a few decades ago. This is the natural, inexorable path for the EU that the United States and the world must learn to adjust and deal with, NATO or no NATO.

Rather than China that has not invaded or imposed herself on any nation, EU poses the greatest challenge and threat to the United States in global influence and power. She has the technological, scientific, military, and economic muscles that are equal to or greater than those of the United States. And as indicated earlier, her currency, the euro, can easily supplant the US dollar as the world's reserve currency. That process is, in fact, on already. And what is more, EU is more at home with her former colonial outposts in all continents than the US, which was not a colonial power but a colonized territory herself. Much of the world, including the US and Canada, speaks EU languages--English, French, Spanish, German and Portuguese. Language is the most powerful cultural force on earth than even military or economic power. And furthermore EU is the only geo-political zone in the world wielding, not one, but two veto powers—France and Britain--in the UN Security Council. Thus while the US is comfortable seeing China as posing the biggest threat to her due to her incompatible communist ideology the EU is the real but generally overlooked threat. As Germany has shown in the past ideological compatibility with western powers is no bar to the quest for global ambitions and domination. Germany struck western democracies without compunction. Conversely, ideological incompatibility is no incentive for the quest for global ambitions and domination. Appearances can indeed be deceptive and this is certainly one of those instances where it is. With a reawakened and resurgent Germany on the driver seat in Brussels the auguries are not at all cheery. What individual nations cannot do to the US and other world powers, EU can. And that means looking at the US straight in the eyes and saying no. That's exactly what former German Chancellor, Gerald Shroeder did to former US president GW Bush in the countdown to the “Operation Iraqi Freedom” in 2003, that created bad blood between the two nations.

It is, therefore, only a matter of time before EUROPA clashes with AMERICANA. Some seers have, in fact, made this prediction decades ago long before EU, the beast, was born. Could this be the reason why Britain is not fully in the EU preferring to retain the British Pound and bailout of the EU when things get out hand?

Sir, Winston Churchill must be churning in his grave (no pun intended). He has in effect handed Europe to Germany on a platter without firing a single shot! What Herr Hitler failed to achieve with bombs and bullets Germany has achieved with just a smile and handshakes and, well, a little friendly bullying, too! Cry beloved Greece and Italy!

Franklin Otorofani is an attorney and public affairs analyst


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