The European Union is about to crack up

times247.com

'CLUB MED' SOCIALISM SEALS EUROPE'S FATE 

Times247 | by: Jeffrey T. Kuhner | Thursday, May 10, 2012

A poster in Nice, on France's Mediterranean coast,
depicts defeated French President Nicolas Sarkozy
with a slogan reading, "A strong France."
Photo Credit:AP Photo/Lionel Cironneau

The European Union is about to crack up. Its disintegration is now inevitable. This is the real meaning of recent elections in France and Greece.

French voters decided to oust President Nicolas Sarkozy, choosing the Socialist Party’s candidate Francois Hollande. The result was predictable, and in some ways deserved. The conservative incumbent came to power in 2007 promising economic reform, overhauling France’s bloated welfare state and cracking down on illegal immigrants. Instead, Mr. Sarkozy piled up record deficits, imposed massive tax hikes and oversaw the loss of France’s triple-A credit rating. The French economy became subservient to Germany, dependent upon Berlin to keep failing French banks afloat and solvent.

Mr. Hollande, however, is determined to maintain France’s lavish social programs. He is an international socialist who believes in class warfare, higher government spending and the EU project. He says France’s skyrocketing debt can be reined in through further tax increases. The centerpiece of his economic plan is to tax millionaires at the crushing rate of 75 percent. Yet, France already has some of the highest taxes in the world. Mr. Hollande’s new wealth tax will trigger a massive flight of French investors and business capital — probably across the Channel to Britain. It is a recipe for economic stagnation and permanent high unemployment.

There is only one way to generate growth and reduce the country’s crippling debt: slash taxes, reduce red tape, implement pension and labor reforms, and shrink the size of the French state. In other words, France needs to imitate the German model.

Instead, Mr. Hollande and the French electorate refuse to confront reality. France is going broke, and it can no longer sustain its generous entitlement state. Debt as a percentage of gross domestic product stands at a dangerous 90 percent. Mr. Hollande’s welfare liberalism will push the debt-to-GDP ratio over 100 percent — the tipping point from which nations never recover. French social democracy has failed. National collapse is imminent.

France’s future can be seen in Greece. The Greeks also held elections. Like the French, they turned to the radical left. The big winner was Syriza, a coalition of socialist parties, which finished second behind the center-right New Democracy. Yet, while New Democracy — and other mainstream parties — lost ground, the election saw the rise of fringe movements. The Communists surged. The neo-Nazi Golden Dawn party got over 6 percent of the vote, and it will enter Parliament for the first time. Greece’s political center is breaking apart.

Syriza now holds the balance of power. During the campaign, it vowed to reverse the austerity measures Athens promised to implement in exchange for EU bailouts. Its platform calls for tax increases on the rich, expanding government spending and preserving Greece’s system of cronyism and statism. In fact, Syriza openly claims Berlin and Brussels lack the nerve to kick Athens out of the eurozone. Hence, there is no need to honor international agreements on prior bailouts. The Greek left believes that the Germans will continue to subsidize Greece’s debt-laden welfare state.

They are wrong. The Germans are getting tired of bankrolling Europe’s southern tier. German Chancellor Angela Merkel is coming under increasing domestic pressure to stop squandering German taxpayer money to prop up deadbeat governments. Greece, Spain, Portugal, Italy and France — all are facing national bankruptcy due to reckless spending, out-of-control deficits, a poor work ethic and economic sclerosis. Berlin is no longer willing to underwrite the nations of “Club Med.”

Hence, Greece’s exit from the euro — and most likely, the EU — is inevitable. Its departure will unleash political shockwaves. The EU’s entire rotten structure will collapse. Like dominoes, once Greece goes, then the other failing southern European nations will follow. Unable to adhere to the rigid requirements of monetary union, they will restore their national currencies and resort to inflation — printing money — to pay off their massive deficits. The euro will die, and with it the pipedream of a federal Europe.

The sovereign debt crisis has exposed the EU’s fatal flaws. From its inception, the concept of European unity was based upon an illusion: that nation-states no longer matter. The EU’s founder, Jacques Delors, believed that a federal Europe could wither away national sovereignty. He was wrong. Nationalism has been the most potent force in modern history. And the reason is simple: It is a natural expression of loyalty to kin, tribe and nation — to love one’s own. The resurgence of ethno-nationalism has led to the dissolution of numerous empires — Austria-Hungary, the Soviet Union, Czechoslovakia and Yugoslavia. The EU was nothing more than the latest attempt to impose an artificial, imperial identity upon Europe’s distinct peoples. The Germans, Greeks, French, English, Italians, Dutch and Danes have unique national interests, histories and cultures. To think they could be fused into a single currency and integrated economy is to ignore the past 2,000 years.

The idea of a unified Europe is an old one. From Napoleon Bonaparte to Adolf Hitler, dictators have sought to forge a continental empire. EU elites believe they can succeed where others failed. Their goal has been to erect a secular socialist superstate aimed at containing American global hegemony. It has always been an anti-American, anti-Christian and anti-capitalist project. It is now sinking under its own crushing weight. Europe has failed — again.                               

Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute.