This blog is about the eurocrisis situation, which may have a large negative impact for years to come. However, it is of vital importance to be aware of the agility of mankind to survive, and show how it has been demonstrated in the past So, the blog starts with an example and a lesson of successful human endurance under severe conditions, and the requirements it takes to tackle such a difficult situation..
An impossible task. A huge problem arises, with no prospect of an adequate answer, as no means are available. Yet, it has to be tackled, as it is of predominant interest. Despite such a dreadful situation, history proves, that sometimes people manage to overcome the problem. Therefore, duch an example is used to highlight the ins and outs of going through an immense struggle. Only empirical evidense can be comvincing, where conjecture or imagination will fall short.
At the end of WWII, the Allied Forces need a large port to land troops and equipmemt. As the Port of Rotterdam is defended in such a way, that capturing is out of the question, full attention is paid to the Port of Antwerp. Both by the Allied Forces, as well as the apprehensive Germans. Although the port is liberated undamaged, the Scheldt entrance is heavily defended, to prevent the use of this harbor. Especially, the island of Walcheren is fortified in such a manner, that conquering would take too long a time, and suffer many lives. For that reason, in October 1944 it is decided to bomb the Walcheren dikes in four places and flood the island, as it is situated below sea level. This approach brings the island successfully in the hands of the Allied Forces, and access to the port of Antwerp is secured.
Although in midwinter the Germans try to recapture Antwerp by means of the surprise attacks of the Battle of the Bulge, the fail to do so. However, Allied progress also stalls. North of the Rhine-branches, the Netherlands will remain in German hands until the war is over in May 1945..
Although liberated, the island of Walcheren is left with a huge problem - if not reclaimed in time, the island will be lost through strong tidal forces, widening and deepening the four vulnerable dike breaches. Hydraulic experience reveals that the island cannot survive another winter, as the dike breaches will deteriorate beyond repair.
A Head Engineer of Rijkswaterstaat, who lives in the liberated part of the Netherlands is an expert on Zuyderzee closures. He takes the initiative and goes to Walcheren to investigate the damage done to the dikes, and make an estimation of the material and equipment needed to repair them. He is also deeply aware of the damage, worsening with every tidal flow, while materials nor equipment are available.
With the collected initial information, he goes in November 1944 to the only person of higher rank in the liberated part of the country, to negotiate what has to be done and safeguard the island. As a result, he is granted permission to start the reclamation project, and establish the Service of Reclamation Walcheren, employing five people.
A high quality project manager HQPM has to be available from the very start. Any major project will be in desparate need of a fully capable leader. This person must have solid experience in the field, and a proven record of ample knowledge of the ins and outs, to be expected during the course of the project.
(Thus, beware of the nitwit expert, often found these days in managerial, sociological, and communication graduates. They may excel in difficult terminology, but fail to come with proper disciplinary education, lest complemented by years of practical and demanding execution. Yet, their role may be useful, when focussed on advice and secretarial reporting.
Also beware of leaders without indigenous affection to the problem and the organization. Presentday 'career pilots' are especially to be avoided as they will opt for short term successes in a questionable manner, that turn against the interests of the organization in the longer term. They will be gone elsewhere, when odds turn sour.)
Furthermore, one needs initially an empirical
estimation of the problem situation plus the materials, work force, and equipment lacking, to be collected and produced by the HQPM. That way, the proper authority can be convinced of the urgency and scale of the problem. Preferably, this will lead to the
establishment of an organization, that is sufficiently competent to tackle the problem.
The severity of the task to be performed is highlighted by listing the absence of almost every need. It includes:
A lack of time - already referred to: the dikes had to be closed before 1 november 1945
A lack of heavy equipment - most of it is unattainable in occupied country to the north
A lack of lodging - to house the thousands of workers needed on the job
A lack of proper organization - tasks are performed directly, instead of contractors
A lack of research - the Facility is at Delft in occupied area
A lack of specialized personnel - again many being in occupied Holland
A lack of money - the government in exile is in London
All efforts are concentrated from the very start on collecting necessary items. For instance, measuring instruments are lacking, but two small rowing vessels can soon be brought into action, producing vital figures on the dike breach corridors, and their deterioration.
The actual work on the dikes entails the freezing of the horizontal base of the breaches, preventing them from deepening beyond repair. Also, the dike head remnants are constantly declining, eroded by the strong tidal forces, especially during spring tides. It is an enduring fight to regain lost terrain, but still resulting in nett losses.
Months of hard work against the odds go by, until execution looms. A curious, but often experienced mechanism shows. It becomes 'vulture time'. As time elapses without visible results (most work is done underwater), questions arise about the management of the project.. At the end of the preparation phase, just before the execution phase, almost any project will be confronted with attacks on its soundness and authority. The offense is likely to come from an often inferior person in the organization, may be a temporary.participant, who secretively slanders the project managemnt at a higher level, arguing that the project is not able to produce substantial results. In the Walcheren reclamation case a contractor (disguised in temporary military assignment and dress), accompanied by higher officials from the exiled government, visits the project office, with the aim to oust the HQPM. Also with the intention to postpone the project with one year, which will lead to its abandonment.
However, at the meeting the contractor is exposed as such, leaving the officials in a state of embarassment, not having been aware of his status in time. No decision is made, although the contractor continues to stay at the office for a couple of days to try and get the vital collected sttaistics. As he is ignored by the staff, he leaves empty-handed and the vulturous intrusion blows over without damage done.
Crucial core questions arising from the situation can only be answered by the Delft Hydraulics Research Unit, using calibrated physical models. However, the unit is inaccessable in German occupied area. Main research answers, such as about the priority of the closures and the optimal approach of the four breaches, had to wait. Calibration is based on actual measurements at the breach locations, to be fed into the models. These breaches were rapidly declining, enlaerging in widths and depths, without the possibility of defense measures.
At the end of war, it will prove that the tidal erosion effects highlight more flooding coming in at the
Nolle, than ebb tide coming out, while Veere shows the reverse. So, a nett
flow is going across the flooded 'lagoon'. Hydraulic models produce experiments with different approaches to closing the breaches, considering the alternaretives available. Also, calculations are carried
out to compare the outcomes with model results.
In March 1945 the Nolle is enlarged to 340 yards, Westkappelle to 650 yards, Veere to 1070 yards, and Rammekens to 820 yards. Attacking them is not only a matter of application of means available. The work is also greatly hampered throughout the entire project by extensive mine fields around the breaches, while demining shows to be an extremely slow process.
A contingency report is sent to the military authorites in Brussels. As a result, it is still wartime, no caissons are provided, but German torpedonets, some trucks, and clothes are delivered. Although the torpedonets are considered of no use at the moment, they will play a vital surprise role at a later stage.
An American officer makes 5 tug boats available in April, which is highly appreciated as now a first full range of equipment is available. Be it far short of the total equipment actually needed .Yet, defense work to consolidate the dike breaches (as good as possible) can start.
As soon as the war is ended at the beginning of May 1945, efforts are made immediately to detect heavy equipment in the now liberated part of the Netherlands. These lead to successful discoveries, although much recuperation is necessary.
The tentative organization of the reclamation is also reconsidered, and normalized by reverting the role of the Service for Reclamation from execution to Direction, while the former Zuyderzee Combination of contractors is attracted and revived in its execution role.
The British, now relieved of their war efforts, provide large scale help. All heavy equipment needed becomes available, including the 'Third Normandy Mulberry Harbor', which is not used - its caissons still in stock near London. They also produce experience, in using the caissons, concerning the tricky matter of keeping them in place, as they are easily dislocated by the force of tidal flows.
The equipment is fully leveled up to its tasks now, and consists of 80 trucks, 12 dukws, 4 landing craft, 8 suction dredgers, 40 excavators, 80 tugboats, 120 barges, and 3000 personnel.
The execution of the most difficult Flushing closure of Nolle is tackled from the south by traditional dike construction, while from the north caissons are applied. in a sort of John Henry contest. Still troublesome, as the traditional approach lacks good clay and enough stones; while the caisson handling lacks sufficient fastening, to withstand the extremely strong spring tides in this coastal region.. However, the Nolle breach is closed in August. While the participants in the project are quite relieved, disaster strikes with the next spring tide. The provisional closure happens to breach again, taking with it its indispensable foundations. Especially for the latter, the situation seems completely hopeless, as all known approaches did fail. It is 12 bar blues time.
Several days, in a desparate mood, the alternatives are discussed inconclusively. Then, at decision day, a British innovative proposal is put forward. It suggests to close the gap from the seaside with a caisson just big enough, and to consolidate it from within with three small caissons, brought in in advance. To prevent the construction and gap filling clay from washing away again, the gaps should be filled with a mixture of German torpedonets and clay. Throughout the night, all preparations for the new approach are made. In particular converting the cranes for moving the torpedonets. The unusual and innovative approach works out favorably, and makes 29 september 1945 a memorable day in the hydraulic history of the Netherlands..
Considering the mainstream activities during the entire project,
the first half of the year-round period shows mainly data collection, next
to the attraction of (extremely hard to get) equipment, materials, and
personnel. Not a single day is wasted. Furthermore, core questions for
research are coined concerning alternative solutions to be investigated as soon as the research unit is accessible.
The
second half of mainstream activities concerns the optimal
distribution of means available, and the right courses of actions to be
decided upon. During this period the focus shifts from mainly internal affairs
of preparation, to external issues, that require extensive communication
as a variety of matters emerge during execution work. A head engineer with excellent capabilities of communication takes care of this Direction job..
Now the most difficult closure has succeeded, the project seems more of a straightforward job to be done within the tight schedule. Answers are provided by Delft Hydraulics when needed. German invasion vessels, never used as such, serve as caissons, now these latter were not in stock anymore, After three closures realized, the water masses can be drained from the larger and most populated part of the island. A controlled breach is made in the Walcheren canal dike, and most of the water runs out at ebb tide via the open canal locks at Flushing and Veere. The remaning water is being pumped out, down to normal groundwater level. Most of the non-evacuated people living on their upper floors, descend to their ground floors again. The closure of the Rammekens breach will take some other months, so the last (minor) flooded part is also reverted to dry land. A great relief to the village people living there.
Summarizing
The HQPM is vital to the project. The quality, and substantial results of the project are related directly to the abilities of the person in charge. Thus, such a difficult project must start with the appointment of an excellent leader, mastering all implications to be expected. The leader must possess all necessary qualifications and experience; moreover, the person must be ciommitted with heart and soul to the project, knowing its workings from the very bottom of the laborers, to the top of the intricate research outcomes, produced by the best researchers in the field, on his demand. Also, some addtional managerial knowledge is useful, especially in the initial design stage of the project. His experience will show, which academic elements may practically fit, and which are too far-fetched.
A tentative estimation of means needed is to be made. Therefore, preceding the initial decision to go forward, a prior task must be to collect the professional information of all relevant aspects.
The role of Direction must be understood well. This implies not only full disciplinary knowledge of the field, but also a helicopter view of all potential interventions, that may affect positively or negatively the progress of the project.
The superior role of the Direction over the contractors means full understanding of their specific contribution as well. I.e., the knowledge of the contractor necessary to complete a job in all its demands, including the management of the equipment, materials, and personnel. The aim of the contractor is to perform the tasks in an optimal way, that is in a cost-saving manner, without hampering the quality of the results.
Continuous monitoring efforts during the project are made to collect precise information and time lines on all project aspects. Researchers are to be provided with proper data. Viable assignments for (sub)contractors have to be produced. As the project carries on, the need for smoothing crucial external relations will emerge, so a highly qualified liaison officer (head engineer) must be appointed to get the project means available, and answer emerging questions.
Halfway the project planning stage a contingency report may become necessary to highlight the setbacks in the project progress. It should make all relevant people aware of the situation. Especially of the danger, that deterioration of the situation may grow out of control. At the end of the preparation phase, also expect the familiar vulture intrusion, intended to replace the HQPM and eventually jeopardize the project. It is advisable to be prepared, and have a defense strategy ready.
As soon as the execution phase starts up, all participants must be reminded or made aware of the primary goals of the project in progress. Questions that will arise have to be answered, clearly to prevent derailing of particular parts.of the project.
During the execution disasters may develop unexpectedly, asking for brainstorming by all relevant participants, experienced and subordinate. The outcome should be a workable solution in order to prevent postponing the project or even result in permanent failure. Once decided upon, each and everyone's new role has to be discussed, in a clear and obvious manner.
As soon as new approaches prove to be satisfactory, they should be formalized in procedures, made known to all participants of the project. As a project may aim towards provisional goals to be achieved, such as producing emergency closures, the definite goals should be known in time and distributed among participants.
Of course, one may object, and argue that the example used in this context is not applicable in general. Especially, while the end of the war produces the means for the solution - just in time. However, first of all, it should be reminded, that without the efforts of the half-year preparation phase, the project would have failed anyway. Not a single day is lost. Then, more importantly, the preparation period also brings about full external awareness of the severity of the problem, and the urge to contribute and help solving eventually the situation.
The project may start with a pessimistic mood internally, but requires an optimistic exposition towards the external partners - it has to reveal the air of an outstanding project fully worth pursuing. Therefore, the goals must become widely recognized and honored.
The drive of any appealing prioject will make it viable, whatever its practical objections in the short term. The usual and unavoidable vulture attack, at the most vulnerable stage of any project (just short of visible results), may strand the project. However, in my experience, this sad fate did only succeed in a minority of cases.
A Dali Type of Interpretation of the Euro Crisis
Understanding Cultural Differences Through a Dali Type of Interpretation
Saturday, November 17, 2012
Saturday, November 10, 2012
Surviving the odds
Reflecting on Europe, in particular on the Eurozone with its euro currency, there is no need to stress the major problems that have emerged in recent years. A deep monetary crisis has demonstrated a remarkable difference towards the incorporation of the single currency. That phenomenon has presented itself especially between northern and southern countries of the Eurozone.
Its mechanisms now display, almost day by day, sharp culturral differences that have culminated from its lifespan of the currency of only a decade. These differences do effectively stall further economic developments in the short term of many of the participating countries, as well as presenting continuing problems in the longer term.
Regrettably, these differences are poorly understood, if at all. A better intellectual control of the basic cultural forces at work in the north and in the south of Europe (these forces show sometimes openly, but are usually hidden) is needed to decide eventually on ways of solving the present and ongoing deadlock situation, which creates a potentially disastrous conflict.
This blog tries to exemplify that age-old cultural differences exist, that on the one hand make up Europe, but on the other hand divide the continent deeply in its proper workings, substantially depleting its intrinsic dynamics.
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Its mechanisms now display, almost day by day, sharp culturral differences that have culminated from its lifespan of the currency of only a decade. These differences do effectively stall further economic developments in the short term of many of the participating countries, as well as presenting continuing problems in the longer term.
Regrettably, these differences are poorly understood, if at all. A better intellectual control of the basic cultural forces at work in the north and in the south of Europe (these forces show sometimes openly, but are usually hidden) is needed to decide eventually on ways of solving the present and ongoing deadlock situation, which creates a potentially disastrous conflict.
This blog tries to exemplify that age-old cultural differences exist, that on the one hand make up Europe, but on the other hand divide the continent deeply in its proper workings, substantially depleting its intrinsic dynamics.
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Thursday, October 18, 2012
Other blogs
For those interested - see for my other blogs.
Also for a project proposal (in Dutch) Over Werk in Crisistijd
Reinier Jan Scheele over Project in Crisistijd
Also for a project proposal (in Dutch) Over Werk in Crisistijd
Reinier Jan Scheele over Project in Crisistijd
Thursday, September 27, 2012
1 The Euro Crisis
1.1 A Current, but Problematic Solution to the Euro Crisis
This concise note on the Eurocrisis aims to highlight some disregarded, yet fundamental cultural differences. These affected the euro currency from the very start. For instance, southern countries prefer since ancient times indirect taxatiion (immediately related to expenditures). Northern countries are more likely to tax incomes and fortunes.The euro crisis did originate mostly in the participating southern countries of Europe. Why did it happen that way, and that soon after its implementation, and why could northern countries not prevent the disastrous and long lasting consequences?
As ususal, the road to disaster was actually paved by the so-called 'muddling through' decision making pattern, which is well-known to politics all over the world, and in all times. Now that Europe tries to scramble out of the present-day deep crisis, a better understanding of major issues involved, may facilitate lasting solutions. The importance of which is predominant, because not only weak economies in the Eurozone are troubled, but actually all the countries that participate in the Eurozone.
The presentday solution of 9 sepetember 2012, by the Euriopean Central Bank, is to use the ESM-budget to buy bonds of the indebted weak countries. This policy is used as a means of lowering the interest rates these countries have to pay on the money market. However, this approach is shortlived and entails a severe risk of lengthening the crisis indefinitely. Nout Wellink, former chairman of the Dutch National Bank argues in a newspaper interview, that the ECB in the end will have bonds, which banks and other investors want to get rid of. As such, the result will be, that the ECB is saddled with lots of debt paperrs no-one wants to have. It is as if the ECB is putting a pistol on its own head, leading to its demise. However, the ECB cannot stop its help to countries, even to those, that will not do enough to cut down expenses. As a result, it will inflate the weak countries, but also its own stock of paper. Thus, Weidman, the president of the German National Bank announced himself against those ECB politics. Others considered the conditions set for buying bonds enough garantee. Yet, time and again, it remains to be seen whether these conditions will be applied effectively, and not be mitigated in time. The prospects in the latter sense are dim, given proven evidence of the past.
1.2 The Eurozone and Euro as Perceived
Some figures highlight clearly the Eurozone, as it is perceived these days. 57% of the Europeans in twelve European countries regard the euro to be bad for the economy. The figure reflectis a growth of 4% of the same interview one year ago. Moreover, countries without the euro regard the single currency as very bad. For instance, 89% of the British. The Swedes amount to 84% (while still obliged to introduce the euro!), and the Poles a still impressive 71%. These extremely high figures are alarming. Even in eurozone countries see their population resistance grow. In Germany and Spain a quarter of the population wants their country to leave the euro (Transatlantic Trends, june 2012).
Except for the latter two, the countries abovementioned, are not yet in the eurozone, but have a real prospect for entering. They can be considered to be independent, but important bystanders, as they are particularly interested lookers-on. To say the least, we may expect those countries not to enter the eurozone for a long time to come. Nowadays, the atrractiveness of the single currency can be considered outspoken negative. Some very basic problems have to be solved first. Yet, as history shows, solving such problems will take many years, not given violent conflict.
1.3 The Consequences of a Troublesome Start
In this restricted context, no effort will be made to discuss all elements involved. Its only aim is to highlight some ignored issues concerning the emergence of the euro, and the effects on the continuation of its major crisis. It will be argued, that the introduction of the euro single currency in 2002 was already accompanied by fundamental problems and characteristics, that go back far in history, and can be noticed for centuries..Basically reflecting conflicting issues, which did not disappear, but actually grew worse in the past decade.
The decision was taken in 1992 at the Maastricht Treaty, to introduce the single currency, eventually to be named the euro. The specimen itself came into use the first of january 2002 in 12 countries of the European union; later expanded with 5 more. It meeant a superfically smooth start, but apparently troublesome after a couple of years.The first signs must have been showing early, as I asked already in 2003 the Terneuzen artist Cees van Langevelde to make me a painting according to Dali's mediterranean 'watch'. Dali sought to express in a famous painting the cultural differences of north and south (when Dali returned home after three active months abroad, he found that nothing had been done by his friends during his own very active absence in the US)..
Many countries stepped into the eurozone obviously hoping to grasp the benefits within reach. However, at the time many did not realize, that the northern type of ruling of the euro, would be considered consistently different by southern parties. It should be stressed that in this context 'north', and 'south' are loosely defined concepts, that cover stronger, versus weaker approaches to the original euro currency basics..
Furthermore, it needs to be argued, that the British sharply foresaw the severe consequences of a single currency, that have emerged during its existence. Yet, the British delegation was not part of the decisive overnight decisive meeting. In the absence of the British delegation the single currency was adopted by the others. In retrospection, deceptively too rash a decision was taken. It created the conditions for a fundamental derailing of the euro from the very start..
.
This concise note on the Eurocrisis aims to highlight some disregarded, yet fundamental cultural differences. These affected the euro currency from the very start. For instance, southern countries prefer since ancient times indirect taxatiion (immediately related to expenditures). Northern countries are more likely to tax incomes and fortunes.The euro crisis did originate mostly in the participating southern countries of Europe. Why did it happen that way, and that soon after its implementation, and why could northern countries not prevent the disastrous and long lasting consequences?
As ususal, the road to disaster was actually paved by the so-called 'muddling through' decision making pattern, which is well-known to politics all over the world, and in all times. Now that Europe tries to scramble out of the present-day deep crisis, a better understanding of major issues involved, may facilitate lasting solutions. The importance of which is predominant, because not only weak economies in the Eurozone are troubled, but actually all the countries that participate in the Eurozone.
The presentday solution of 9 sepetember 2012, by the Euriopean Central Bank, is to use the ESM-budget to buy bonds of the indebted weak countries. This policy is used as a means of lowering the interest rates these countries have to pay on the money market. However, this approach is shortlived and entails a severe risk of lengthening the crisis indefinitely. Nout Wellink, former chairman of the Dutch National Bank argues in a newspaper interview, that the ECB in the end will have bonds, which banks and other investors want to get rid of. As such, the result will be, that the ECB is saddled with lots of debt paperrs no-one wants to have. It is as if the ECB is putting a pistol on its own head, leading to its demise. However, the ECB cannot stop its help to countries, even to those, that will not do enough to cut down expenses. As a result, it will inflate the weak countries, but also its own stock of paper. Thus, Weidman, the president of the German National Bank announced himself against those ECB politics. Others considered the conditions set for buying bonds enough garantee. Yet, time and again, it remains to be seen whether these conditions will be applied effectively, and not be mitigated in time. The prospects in the latter sense are dim, given proven evidence of the past.
1.2 The Eurozone and Euro as Perceived
Some figures highlight clearly the Eurozone, as it is perceived these days. 57% of the Europeans in twelve European countries regard the euro to be bad for the economy. The figure reflectis a growth of 4% of the same interview one year ago. Moreover, countries without the euro regard the single currency as very bad. For instance, 89% of the British. The Swedes amount to 84% (while still obliged to introduce the euro!), and the Poles a still impressive 71%. These extremely high figures are alarming. Even in eurozone countries see their population resistance grow. In Germany and Spain a quarter of the population wants their country to leave the euro (Transatlantic Trends, june 2012).
Except for the latter two, the countries abovementioned, are not yet in the eurozone, but have a real prospect for entering. They can be considered to be independent, but important bystanders, as they are particularly interested lookers-on. To say the least, we may expect those countries not to enter the eurozone for a long time to come. Nowadays, the atrractiveness of the single currency can be considered outspoken negative. Some very basic problems have to be solved first. Yet, as history shows, solving such problems will take many years, not given violent conflict.
1.3 The Consequences of a Troublesome Start
In this restricted context, no effort will be made to discuss all elements involved. Its only aim is to highlight some ignored issues concerning the emergence of the euro, and the effects on the continuation of its major crisis. It will be argued, that the introduction of the euro single currency in 2002 was already accompanied by fundamental problems and characteristics, that go back far in history, and can be noticed for centuries..Basically reflecting conflicting issues, which did not disappear, but actually grew worse in the past decade.
The decision was taken in 1992 at the Maastricht Treaty, to introduce the single currency, eventually to be named the euro. The specimen itself came into use the first of january 2002 in 12 countries of the European union; later expanded with 5 more. It meeant a superfically smooth start, but apparently troublesome after a couple of years.The first signs must have been showing early, as I asked already in 2003 the Terneuzen artist Cees van Langevelde to make me a painting according to Dali's mediterranean 'watch'. Dali sought to express in a famous painting the cultural differences of north and south (when Dali returned home after three active months abroad, he found that nothing had been done by his friends during his own very active absence in the US)..
Many countries stepped into the eurozone obviously hoping to grasp the benefits within reach. However, at the time many did not realize, that the northern type of ruling of the euro, would be considered consistently different by southern parties. It should be stressed that in this context 'north', and 'south' are loosely defined concepts, that cover stronger, versus weaker approaches to the original euro currency basics..
Furthermore, it needs to be argued, that the British sharply foresaw the severe consequences of a single currency, that have emerged during its existence. Yet, the British delegation was not part of the decisive overnight decisive meeting. In the absence of the British delegation the single currency was adopted by the others. In retrospection, deceptively too rash a decision was taken. It created the conditions for a fundamental derailing of the euro from the very start..
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2 Issues at Stake
2.1 Some Relevant Developments
Prehistoric civilization came from Asia,and via the Arab world, to southern Europe. On the way being enriched by new knowledge and insights. From ancient Greece, these achievements were exported by the Romans, as southern powers penetrated northern European regions. Interestingly, with special attention. As Pörtner and Tadema put it: the best legions, the most successful warriors, and the best officials were sent to the Rhine and Danube area. Southern civilisation was spread, not by acculturation, but by military force.
Thus, administrative order, cultural issues, and normative ethics came to the river regions of Donau, Rhine, and Scheldt. Archeologic discoveries show the advanced way the Roman legions penetrated the north, and colonized its inhabitants.However, after the demise of the Roman Empire it took centuries for a new European era to emerge. That was, when Charlemagne did reign over a large part of Europe,
Remarkably, in so doing, he established a sort of separate northern administrative and intellectual center at Aachen, Although, it could not match the grandeur of southern capitals, it contributed an interesting feature.While symbolism was primordial in the southern culture, in Aachen of Charlemagne we already see, that the sober, unadorned 'word', so text as such, becomes a basic cultural issue, eventually leading to the discovery of printing in the north, separately by Gutenberg and Coster..Aachen was the embryonic typical northern European intellectual unity.
Next to Frankish, Charlemagne was speaking latin, and understanding Greek. After his crowning of an Emperor in Rome, he has been reported to say, that he would not have entered St Peter's had he known what the Pope intended to do. He disliked the Pope's implied arrogation of authority. The Pope, in those days, also reigned over a vast area of southern Europe. (J.M.Roberts, in History of the World)..
In later centuries, two main southern powers would control the larger part of Europe - The Roman Chrurch, and the Spanish Monarchy. Both these powers were successfully.challenged in the north. Preceded by the Magna Carta of Great Britain,.it was firstly the reformation, starting with Luther, that questioned the power of the Roman Church. Secondly, the Spanish monarchy lost the freedom struggle with the Republic of the Seven Provinces, under Willem van Oranje.The result was not just political. At the time the Republic urbanized far more than other nations, featuring hardworking, sober, objective citizens, although rather restricted in their outlook.
It did entail a shift from feudal to centralized management. The economy was enriched with new approaches. In a multinational way, large scale production evolved in shipbuilding crossing borders from Scandinavia to Holland and Zeeland..The entire range from raw materials to end product became covered. In this sense an entrepreneur as De Geer can be seen as one of the first, or even the very first of capitalists. Resilting tensions between the patricians and the population at large brought about conflicts of interest, which took a large periode to resolve politically.
People came from abroad to view the economic miracle, and thus, provided later sources of meticulous description, the Dutch failed to produce deliberately, themselves..Nowadays, on a much larger scale, and as a result of worldwide developments, Europe is gradually on its way to some sort of unity, but politically still in a comparable state of 'nascendi'. As will be argued, this process stumbles severely nowadays. Its course of action may prove to be harmful to its own and the world economy for a long time to come..Serious problems did arise, as the euro crisis exemplifies..
2.2 Problems
Historic problems of Europe lay in many wars fought between European nations. William Penn, himself actually providing a major contribution to the US-constitution, already coined in 1670 also a European concept, that aimed to prevent wars. However, the US had no such troublesome past, that could have hampered its rise. Thus, when immigration was apparently leading to a disruption of its society and civilization, it closed its boundaries in 1924.
The European Union is now a body of some 27 nations, in which internal economic boundaries have been reduced substantially, to the benefit of all participants. Thus, little resistance was met, and even strong support of the various populations was apparent for the breaking down of market barriers. It is safe to assume, that the implementation did not clash with the opinions of most of the Europeans.
People saw in the Common Market a reassuring, war preventing, mechanism, that promised and realized prosperity. However, mainly outside the scope of people, Brussels evolved into a beaurocratic administration, seeking to extend its powers above the realm of economics, internally, and externally.
The intermediate result cannot be considered positive, as the implementation of the European currency of the euro led, rather unexpectedly for most users, to a deep crisis.
In that crisis, which may sustain for a long time, opposing opinions are emerging, resulting in a stalemate situation. The northern nations not willing to pay for the enormous debts of the southern countries, while the southern nations expect them to do. Internal tensions are growing, while the Brussels' power-based, top-bottom reaction, aims at collecting more money to be transferred.
2.3 Opposing Forces in Progress
On the one hand we see northern powers growing more reluctant to money transfers by a centralized bureaucracy, while, at the same time, Brussels is trying desparately to gain substantial control over the national finances of the eurozone. However, although the Constitutional Court of Germany approved the Germasn contribution to the European Monetary Fund, it stated at the same time, that if exceeding € 190.000.000.000 will occur, a new treatment is necessary. On top of it, the important CSU political party does not want to exceed the mentioned amount of support. Yet, it has already been stated, that a far larger sum is called for, some ten times the amount at stake.
In the hope to nullify member state measures, Van Rompuy, EU-chairman, aims for a common European budget. Within such a European budget, a large part of the national finances are transferred to, and brought under the control of Brussels, and thus under central, mostly invisible control.
Evidently, it sees as its primary task to try and greatly facilitate the transfer of money to monetary unbalanced economies, without having to ask for the consent of the payers.
Prehistoric civilization came from Asia,and via the Arab world, to southern Europe. On the way being enriched by new knowledge and insights. From ancient Greece, these achievements were exported by the Romans, as southern powers penetrated northern European regions. Interestingly, with special attention. As Pörtner and Tadema put it: the best legions, the most successful warriors, and the best officials were sent to the Rhine and Danube area. Southern civilisation was spread, not by acculturation, but by military force.
Thus, administrative order, cultural issues, and normative ethics came to the river regions of Donau, Rhine, and Scheldt. Archeologic discoveries show the advanced way the Roman legions penetrated the north, and colonized its inhabitants.However, after the demise of the Roman Empire it took centuries for a new European era to emerge. That was, when Charlemagne did reign over a large part of Europe,
Remarkably, in so doing, he established a sort of separate northern administrative and intellectual center at Aachen, Although, it could not match the grandeur of southern capitals, it contributed an interesting feature.While symbolism was primordial in the southern culture, in Aachen of Charlemagne we already see, that the sober, unadorned 'word', so text as such, becomes a basic cultural issue, eventually leading to the discovery of printing in the north, separately by Gutenberg and Coster..Aachen was the embryonic typical northern European intellectual unity.
Next to Frankish, Charlemagne was speaking latin, and understanding Greek. After his crowning of an Emperor in Rome, he has been reported to say, that he would not have entered St Peter's had he known what the Pope intended to do. He disliked the Pope's implied arrogation of authority. The Pope, in those days, also reigned over a vast area of southern Europe. (J.M.Roberts, in History of the World)..
In later centuries, two main southern powers would control the larger part of Europe - The Roman Chrurch, and the Spanish Monarchy. Both these powers were successfully.challenged in the north. Preceded by the Magna Carta of Great Britain,.it was firstly the reformation, starting with Luther, that questioned the power of the Roman Church. Secondly, the Spanish monarchy lost the freedom struggle with the Republic of the Seven Provinces, under Willem van Oranje.The result was not just political. At the time the Republic urbanized far more than other nations, featuring hardworking, sober, objective citizens, although rather restricted in their outlook.
It did entail a shift from feudal to centralized management. The economy was enriched with new approaches. In a multinational way, large scale production evolved in shipbuilding crossing borders from Scandinavia to Holland and Zeeland..The entire range from raw materials to end product became covered. In this sense an entrepreneur as De Geer can be seen as one of the first, or even the very first of capitalists. Resilting tensions between the patricians and the population at large brought about conflicts of interest, which took a large periode to resolve politically.
People came from abroad to view the economic miracle, and thus, provided later sources of meticulous description, the Dutch failed to produce deliberately, themselves..Nowadays, on a much larger scale, and as a result of worldwide developments, Europe is gradually on its way to some sort of unity, but politically still in a comparable state of 'nascendi'. As will be argued, this process stumbles severely nowadays. Its course of action may prove to be harmful to its own and the world economy for a long time to come..Serious problems did arise, as the euro crisis exemplifies..
2.2 Problems
Historic problems of Europe lay in many wars fought between European nations. William Penn, himself actually providing a major contribution to the US-constitution, already coined in 1670 also a European concept, that aimed to prevent wars. However, the US had no such troublesome past, that could have hampered its rise. Thus, when immigration was apparently leading to a disruption of its society and civilization, it closed its boundaries in 1924.
The European Union is now a body of some 27 nations, in which internal economic boundaries have been reduced substantially, to the benefit of all participants. Thus, little resistance was met, and even strong support of the various populations was apparent for the breaking down of market barriers. It is safe to assume, that the implementation did not clash with the opinions of most of the Europeans.
People saw in the Common Market a reassuring, war preventing, mechanism, that promised and realized prosperity. However, mainly outside the scope of people, Brussels evolved into a beaurocratic administration, seeking to extend its powers above the realm of economics, internally, and externally.
The intermediate result cannot be considered positive, as the implementation of the European currency of the euro led, rather unexpectedly for most users, to a deep crisis.
In that crisis, which may sustain for a long time, opposing opinions are emerging, resulting in a stalemate situation. The northern nations not willing to pay for the enormous debts of the southern countries, while the southern nations expect them to do. Internal tensions are growing, while the Brussels' power-based, top-bottom reaction, aims at collecting more money to be transferred.
2.3 Opposing Forces in Progress
On the one hand we see northern powers growing more reluctant to money transfers by a centralized bureaucracy, while, at the same time, Brussels is trying desparately to gain substantial control over the national finances of the eurozone. However, although the Constitutional Court of Germany approved the Germasn contribution to the European Monetary Fund, it stated at the same time, that if exceeding € 190.000.000.000 will occur, a new treatment is necessary. On top of it, the important CSU political party does not want to exceed the mentioned amount of support. Yet, it has already been stated, that a far larger sum is called for, some ten times the amount at stake.
In the hope to nullify member state measures, Van Rompuy, EU-chairman, aims for a common European budget. Within such a European budget, a large part of the national finances are transferred to, and brought under the control of Brussels, and thus under central, mostly invisible control.
Evidently, it sees as its primary task to try and greatly facilitate the transfer of money to monetary unbalanced economies, without having to ask for the consent of the payers.
3 Incompatibilities
3.1 Two Opposing Cultural Differences
Basic cultural differences may span a long time. Such a time period may cover centuries, and can hardly be considered whimsical. For that reason, the historical cultural attitude towards some typical financial, commercial, and political agreements between the north and south of Europe have been highlighted in this context.
As argued before, they started as early as the Charlemagne reign, and continued through the centuries until this very day. As they show such a constant pattern, they are considered to have continous impact on administrative issues. Especially, why these patterns do emerge time and again nowadays in the Eurozone. As a common currency is necessarily subject to stringent rules, these differences might safely be termed incompatibilities. What do they entail?
3.2 The Complementos Approach
The evidence of cultural differences goes back for centuries..For proper exemplification, one needs extremely reliable information that has been produced by a source.with unquestionable reputation..In the recorded history of the Republic of the Seven Provinces, one man singles out as a trustworthy and sincere reporter, providing all necessary details. It is merchant trader and in later years Admiral of the Republican fleet, Michiel de Ruyter (1607-1676). As a major source on cultural issues, some elaboration on the remarkable characteristics of the man is needed..
In his days he was already a legend and acclaimed for his unrivalled courage, his unpretentious attitude, his well-considered policies, and his astonishing soberness. Actually, he had all the qualities that are nowadays deemed necessary for the leadership of a large state or a giant multinational. He is described as an adventurous, yet contemplative mind. At the age of eleven, he started his life in commercial vessels that went to the meditterranean, the Gold coast, and Brazil. He made a fast career in the ranks of merchant vessels, strictly obeying his employers. When he wanted to retire, he was asked (one might even say pressed) by the Republic to join the navy fleet, although he hated bloodshed. Only, if fighting had been unavoidable he went into action, proper action then. In the fleet came with him rules of general order, and tactical discipline. This was highly necessary, as almost all of the time he was in a weaker position than his opponents, being undermanned, underarmed, and undershipped. Yet, in those circumstances he did stand the severests of fights, even fighting off a combined fleet of the French and British. All in all he was considered highly, not only by his men, but also by his adversaries.
As a British lieutenant of the Royal James, who had watched him from close by, put it - he is an admiral, he is a captain, he is a chief, he is a sailor, and he is a soldier, that man, that hero, is all at the same time. And Colbert called him the greartest captain that ever was at sea. Surprised foreign visitors reported him to be brooming his own cabin, cleaning up for their visit.
The reports to his principals were comprehensive, and meticulousl. Paying scrupulous attention to detail. In his relationship with southern, mediterranean trade contacts, one word is consistently returning in every voyage account. It is a main subject of frustration: complementos.Time and again, this one word, not in dutch, but in latin, complementos, is repeated over and over again, whatever country he is visiting in the south. For instance, on a voyage to Portugal (1640-1641), which country was in a struggle for freedom with Spain, he expected Portugal support to fight the Spanish. However, he had every reason to believe, that he was fooled by Portuguese complementos, time and again. On a trip to the mediterranean in 1657 he had to negotiate several issues with the Spanish, and despite many of their complementos, he was successful in his negotiations; i.e. eventually. In 1675 de Ruyter had to place himself under Spanish command in a combined fight with France, although they failed to provide their promised fleet. They did not fulfil their pledges to deliver their amount of ships in fighting condition, time and again. Leaving De Ruyter complaining about their 'mañanas' and complementos.
Now, what does this intruiging word complemento mean? First of all, complemento refers to addition, it is an add-on. So, it is een extra and considered an improvement to a former agreement. Secondly and preferably, it is also accompanied by some ceremonial way of presentation, making it an official statement. Closely, in accord with the formal, ceremonial, and symbolic expressions often preferred by latin representatives.
It made De Ruyter wanting to leave, because of hearing those big words, but failing support. Yet, the Spanish argued strongly, that if he would leave Sicily and even Naples would become a French prize. His decision to stay, made him the fatal victim of a battle near Syracuse.
3.3 Complementos Propensity vs. Ackknowledged Settlement
As complemento was consistently returning in the north-south meetings it is not unwise, to consider it a standard latin procedure, and thus an acknowleged way of formal negotiation by latin people. As such, it constitutes a normal pattern, and not an exception to the rule. It is also used in many different ways. It may refer to a complemento directo, a complemento indirecto, a complemento circunstancial, a complemento prepocicional. In terms of finances one can have a complemento de destino, an extra allowance attached to a post, a complemento de productividad, a performance related bonus, a complemento de sueldo, that is a bonus, an extra pay, a complemento pro peligrosidad, danger money, a complemento salarial, also a bonus. In terms of law and contracts a complento for the pain, is typical. A ususal passage in a contract will read:- together with the pacts, conditions, statements, and complements deemed necessary and appropriate.
Contrariwise, given this southern inclination, one can quote a typical presentday northern point of view. An overwhelming majority of 90% of the people telling, that Greece has had enough, already receiving two huge sums for its economy, and should not get a third one.
While monitoring aberrations from the agreed upon ruling, it should be understood, that it may only be the northern notion of making settlements work. Opposed to this, the southern complementos approach is clearly based on tentative agreements, asking for a different monitoring system. It operates basically in terms of future adaptations to the initial agreement. So, the rules have to be changed, if and when (major) aberrations arise. Monitoring the complementos way implies from the start the prevision of not meeting, or having to meet, the initial rules. That may even include preparing measures to be taken, before the deviation actually shows to the other party involved. Therefore, this complemento type of adaptation monitoring asks for a mainly hierarchical structure, in which the chair necessarily must be in southern hands.
In general, these uncertain characteristics of management are hard to swallow by northern people. As an adapted proverbial expression might put it - The road to hell is paved by complementos.
Basic cultural differences may span a long time. Such a time period may cover centuries, and can hardly be considered whimsical. For that reason, the historical cultural attitude towards some typical financial, commercial, and political agreements between the north and south of Europe have been highlighted in this context.
As argued before, they started as early as the Charlemagne reign, and continued through the centuries until this very day. As they show such a constant pattern, they are considered to have continous impact on administrative issues. Especially, why these patterns do emerge time and again nowadays in the Eurozone. As a common currency is necessarily subject to stringent rules, these differences might safely be termed incompatibilities. What do they entail?
3.2 The Complementos Approach
The evidence of cultural differences goes back for centuries..For proper exemplification, one needs extremely reliable information that has been produced by a source.with unquestionable reputation..In the recorded history of the Republic of the Seven Provinces, one man singles out as a trustworthy and sincere reporter, providing all necessary details. It is merchant trader and in later years Admiral of the Republican fleet, Michiel de Ruyter (1607-1676). As a major source on cultural issues, some elaboration on the remarkable characteristics of the man is needed..
In his days he was already a legend and acclaimed for his unrivalled courage, his unpretentious attitude, his well-considered policies, and his astonishing soberness. Actually, he had all the qualities that are nowadays deemed necessary for the leadership of a large state or a giant multinational. He is described as an adventurous, yet contemplative mind. At the age of eleven, he started his life in commercial vessels that went to the meditterranean, the Gold coast, and Brazil. He made a fast career in the ranks of merchant vessels, strictly obeying his employers. When he wanted to retire, he was asked (one might even say pressed) by the Republic to join the navy fleet, although he hated bloodshed. Only, if fighting had been unavoidable he went into action, proper action then. In the fleet came with him rules of general order, and tactical discipline. This was highly necessary, as almost all of the time he was in a weaker position than his opponents, being undermanned, underarmed, and undershipped. Yet, in those circumstances he did stand the severests of fights, even fighting off a combined fleet of the French and British. All in all he was considered highly, not only by his men, but also by his adversaries.
As a British lieutenant of the Royal James, who had watched him from close by, put it - he is an admiral, he is a captain, he is a chief, he is a sailor, and he is a soldier, that man, that hero, is all at the same time. And Colbert called him the greartest captain that ever was at sea. Surprised foreign visitors reported him to be brooming his own cabin, cleaning up for their visit.
The reports to his principals were comprehensive, and meticulousl. Paying scrupulous attention to detail. In his relationship with southern, mediterranean trade contacts, one word is consistently returning in every voyage account. It is a main subject of frustration: complementos.Time and again, this one word, not in dutch, but in latin, complementos, is repeated over and over again, whatever country he is visiting in the south. For instance, on a voyage to Portugal (1640-1641), which country was in a struggle for freedom with Spain, he expected Portugal support to fight the Spanish. However, he had every reason to believe, that he was fooled by Portuguese complementos, time and again. On a trip to the mediterranean in 1657 he had to negotiate several issues with the Spanish, and despite many of their complementos, he was successful in his negotiations; i.e. eventually. In 1675 de Ruyter had to place himself under Spanish command in a combined fight with France, although they failed to provide their promised fleet. They did not fulfil their pledges to deliver their amount of ships in fighting condition, time and again. Leaving De Ruyter complaining about their 'mañanas' and complementos.
Now, what does this intruiging word complemento mean? First of all, complemento refers to addition, it is an add-on. So, it is een extra and considered an improvement to a former agreement. Secondly and preferably, it is also accompanied by some ceremonial way of presentation, making it an official statement. Closely, in accord with the formal, ceremonial, and symbolic expressions often preferred by latin representatives.
It made De Ruyter wanting to leave, because of hearing those big words, but failing support. Yet, the Spanish argued strongly, that if he would leave Sicily and even Naples would become a French prize. His decision to stay, made him the fatal victim of a battle near Syracuse.
3.3 Complementos Propensity vs. Ackknowledged Settlement
As complemento was consistently returning in the north-south meetings it is not unwise, to consider it a standard latin procedure, and thus an acknowleged way of formal negotiation by latin people. As such, it constitutes a normal pattern, and not an exception to the rule. It is also used in many different ways. It may refer to a complemento directo, a complemento indirecto, a complemento circunstancial, a complemento prepocicional. In terms of finances one can have a complemento de destino, an extra allowance attached to a post, a complemento de productividad, a performance related bonus, a complemento de sueldo, that is a bonus, an extra pay, a complemento pro peligrosidad, danger money, a complemento salarial, also a bonus. In terms of law and contracts a complento for the pain, is typical. A ususal passage in a contract will read:- together with the pacts, conditions, statements, and complements deemed necessary and appropriate.
Contrariwise, given this southern inclination, one can quote a typical presentday northern point of view. An overwhelming majority of 90% of the people telling, that Greece has had enough, already receiving two huge sums for its economy, and should not get a third one.
While monitoring aberrations from the agreed upon ruling, it should be understood, that it may only be the northern notion of making settlements work. Opposed to this, the southern complementos approach is clearly based on tentative agreements, asking for a different monitoring system. It operates basically in terms of future adaptations to the initial agreement. So, the rules have to be changed, if and when (major) aberrations arise. Monitoring the complementos way implies from the start the prevision of not meeting, or having to meet, the initial rules. That may even include preparing measures to be taken, before the deviation actually shows to the other party involved. Therefore, this complemento type of adaptation monitoring asks for a mainly hierarchical structure, in which the chair necessarily must be in southern hands.
In general, these uncertain characteristics of management are hard to swallow by northern people. As an adapted proverbial expression might put it - The road to hell is paved by complementos.
4 Uncomfortable Options
4.1 No Easy Way Out of the Crisis
In a civilized world debt has to be paid back by the party that borrowed, whether it concerns money that is owed by a person, by a firm, by a multinational or by a country. Thus, in principle loans are only granted to people or firms, who are considered credit worthy. For instance, by having more income than expenditures, or being convincingly solvent, and expecting to create more income in the future.
It is highly unusual, for debts to be paid for by those, who are not at all involved.in the origins of the debt. Yet, the latter situation emerges painfully from the euro crisis. Northern countries have pursued their strict way of bookkeeping, while southern counrtries practised their indigenous financial approach. Northern countries consider the latter far too lenient to be sustainable. In the situation of the single currency, it did prove to be a disastrous cultural gap. Particularly so, while the basic deviation was rather misty for a couple of years, and uncovered too late. Several solutions to the euro crisis have been proposed. Yet, none seems to be taking into account the ongoing and lasting basic cultural differences in Europe, that will influence the outcomes, whatever measures are taken in the near future.
One should realize, that deep cultural differences between northern and southern countries affect the basic agreements, because of the underlying conflicting opinions and convictions regarding an agreement. They also affect the deviating way agreements are applied. Thus, intended courses of action will turn out completely different, whether viewed from a northern, or viewed from a southern standpoint.
Most of the time, the adopted 'official' focus is on the initial agreement and its ruling. However, this is a typical northern approach. It is acceptable in its rigidity to northern delegates. However, usually considered a first opinion to their southern counterparts.
4.2 Three Options
For solving the crisis, three courses of action might be pursued. First of all, the power option. Mainly by concentrating monetary and political power centrally in Brussels and international supervising bodies. In so doing, it is assumed, that the economic deviating countries are forced back to redress their attitudes, at the same time transferring huge sums of money from the north to the south.. As such, it represents a typical hierarchical top-down approach, well-known from ages back, and not to be disregarded in its deep roots.
In the past, when Europe was largely controlled by the legions of hte Roman Empire, and much later in a double sense by the well-established Roman Church next to the Spain Monarchy, a top-down control was established. A hierarchical structure did take care of important economic issues. Predominantly, by maintaining a money flow to the power center, while at the same time keeping the countries from aberrations. Again it is an intended European policy, that will pursue central domination, evolving step by step.
To be expected from the proposed measures, is a process that is comparable to a complementos approach, as elaborated on in 3. Initially, northern countries will not disregard their interests, but along the road be overwhelmed by events. A pattern results, that will show a succession of postponements. Only to be implemented one by one, whenever the crisis worsens, and another need for intervention emerges. Adaptations to the original ruling will each time create a new framework of reference, that is coined to provide a new next start. However, eventually, as history shows, some limit will be arrived at, and a major cultural clash is likely to result. That might lead to the unavoidable conviction, that northern and southern regional interests should be separated in part or in total..
As a typical example, this pattern is showing in Belgium, where north and south present a struggle very similar to the European issue, be it of course on a far smaller scale. The solution presents itself in separate autonomous governments, and separate budgets. Along such a line of development, Europe may eventually survive as two distinct, yet closely related parts. But before such a durable situation is the inevitable outcome, the ongoing crisis and its 'solutions' have to last long and worsen all participating economies substantially.
The breakup situation will be reached, when people in the north are likely to say - to this very point and no further. It is likely to occur, and can be expected as the firsrt signs show. It has been articulated alraedy tentatively within the Eurozone by the Constitutional Court of Germany, and the german political party of CSU. Other clear signs on the wall, are the earlier quoted opnions of those European countries, that did not join the Eurozone yet.
Contrary to the presentday centralized power suggestions, is the original and authentic northern bottom-up approach, as proposed by the British. It basically entails the provision of a common market with a common currency to facilitate internal money flows. The common currency provides at the same time externally, a substantive, stable, and regognized world coin. However, and for the time being, without the loss of the trusted home currencies.
Such a proces provides an automatic economic mechanism to the European monetary system. The existing currencies stay in place, while the double currency monetary system gradually smoothes out cultural differences.between the home currency and the common market currency. I.e., until a state of equilibrium is arrved at, making home currencies superfluous, so they disappear..
Because of the nationally expressed relationships of home currencies to the common currency, the money market regulates the differing values through its demand/suppply mechanisms. Thus, the proper relation of the different economies to the common currency is provided intrinsically, and not through questionable intervention from above. If that model would have been pursued, the weak southern economies would successfully have brought cheaper products on the common and world market through their devaluated home currency, but with the outlook for automatically strengthening their economies.to the general level.
As argued, at the preliminary stage of the euro the double currency was a viable option, and strongly suggested by the British. Had it been adopted, the euro crisis would not have resulted, because of that automatic economic mechanisms, accompanied only by peripheral ruling to avoid derailing and excesses. However, presentday politics are still seeking a single currency solution aiming for a power option. In open democratic societies, as most European states favor, the power option is not going to work indefinitely. The drawbacks will soon dominate the doubtful benefits.
We still may hope for the double currency to be introduced in the Eurozone, curing deviations in internal monetary terms, and facilitating the joining in of new members. Yet, we must also fear that much depletion of all eurozone economies will have to show first, before such an implementation is likely to occur. Although the suggested centralized approach is counterforcing modern economic automatisms, it will be hard for Brussels to accept moderation of its role.
A third option keeps the northern and southern monetary systems apart. In a way introducing both of the earlier approaches, but separately. A northern central bank and a southern central bank each have their own common currency, That option has been referred to as Neuro and Zeuro. The weaker countries introduce their familiar top-down monetary system, while the stronger economies operarte their own bottom-up model. Such a system prevents balancing money flows from the north to the south; and instead favors the cultural differences of both economic regions. .
4.3 The Expected Development - Muddling Through
Evidently, current European policy is to go the southern road. In practical terms, it pursues the ´muddling through´ way of makimg policy. While the top-down approach is preferred by Brussels, it is likely to prove not longlasting, as its gaining of poltical power is matched by ever poorer economic results. The power option will create major problems in many participating nations, north and south, and will prevent others from entering. Proper economic solutions are avoided, as long as small incrental measures are accepted.
It would be inappropriate to blame politicians for going along their road. Especially, as precise knowledge of alternatives is lacking. In reality, most arguments being vague and not in numerical monetary terms. Moreover, alternatives also show sharp differences between short term and long term consequences. In democratic systems, politicians usually have a short term responsibility, so their scope is determined by their election period. They may be gone, when serious conflicts arise.
On solid grounds we may expect, that the centralized power option will not cure the euro crisis. Its effect is assumed to be a constant flow of money from the north, to be transferred. It evaporates their economies, while not curing the southern ones, and only loading them with debts they cannot pay back. Because of the step-by-step policies, this process will take many years until the eventual downfall of the eurozone, because of the huge sums involved. It will keep a large part of Europe, and also a part of the world, in some crisis situation. Only if an unsurmountable barrier shows, the process may stall suddenly as uncontrollable political pressures explodes bottom-up.
In a civilized world debt has to be paid back by the party that borrowed, whether it concerns money that is owed by a person, by a firm, by a multinational or by a country. Thus, in principle loans are only granted to people or firms, who are considered credit worthy. For instance, by having more income than expenditures, or being convincingly solvent, and expecting to create more income in the future.
It is highly unusual, for debts to be paid for by those, who are not at all involved.in the origins of the debt. Yet, the latter situation emerges painfully from the euro crisis. Northern countries have pursued their strict way of bookkeeping, while southern counrtries practised their indigenous financial approach. Northern countries consider the latter far too lenient to be sustainable. In the situation of the single currency, it did prove to be a disastrous cultural gap. Particularly so, while the basic deviation was rather misty for a couple of years, and uncovered too late. Several solutions to the euro crisis have been proposed. Yet, none seems to be taking into account the ongoing and lasting basic cultural differences in Europe, that will influence the outcomes, whatever measures are taken in the near future.
One should realize, that deep cultural differences between northern and southern countries affect the basic agreements, because of the underlying conflicting opinions and convictions regarding an agreement. They also affect the deviating way agreements are applied. Thus, intended courses of action will turn out completely different, whether viewed from a northern, or viewed from a southern standpoint.
Most of the time, the adopted 'official' focus is on the initial agreement and its ruling. However, this is a typical northern approach. It is acceptable in its rigidity to northern delegates. However, usually considered a first opinion to their southern counterparts.
4.2 Three Options
For solving the crisis, three courses of action might be pursued. First of all, the power option. Mainly by concentrating monetary and political power centrally in Brussels and international supervising bodies. In so doing, it is assumed, that the economic deviating countries are forced back to redress their attitudes, at the same time transferring huge sums of money from the north to the south.. As such, it represents a typical hierarchical top-down approach, well-known from ages back, and not to be disregarded in its deep roots.
In the past, when Europe was largely controlled by the legions of hte Roman Empire, and much later in a double sense by the well-established Roman Church next to the Spain Monarchy, a top-down control was established. A hierarchical structure did take care of important economic issues. Predominantly, by maintaining a money flow to the power center, while at the same time keeping the countries from aberrations. Again it is an intended European policy, that will pursue central domination, evolving step by step.
To be expected from the proposed measures, is a process that is comparable to a complementos approach, as elaborated on in 3. Initially, northern countries will not disregard their interests, but along the road be overwhelmed by events. A pattern results, that will show a succession of postponements. Only to be implemented one by one, whenever the crisis worsens, and another need for intervention emerges. Adaptations to the original ruling will each time create a new framework of reference, that is coined to provide a new next start. However, eventually, as history shows, some limit will be arrived at, and a major cultural clash is likely to result. That might lead to the unavoidable conviction, that northern and southern regional interests should be separated in part or in total..
As a typical example, this pattern is showing in Belgium, where north and south present a struggle very similar to the European issue, be it of course on a far smaller scale. The solution presents itself in separate autonomous governments, and separate budgets. Along such a line of development, Europe may eventually survive as two distinct, yet closely related parts. But before such a durable situation is the inevitable outcome, the ongoing crisis and its 'solutions' have to last long and worsen all participating economies substantially.
The breakup situation will be reached, when people in the north are likely to say - to this very point and no further. It is likely to occur, and can be expected as the firsrt signs show. It has been articulated alraedy tentatively within the Eurozone by the Constitutional Court of Germany, and the german political party of CSU. Other clear signs on the wall, are the earlier quoted opnions of those European countries, that did not join the Eurozone yet.
Contrary to the presentday centralized power suggestions, is the original and authentic northern bottom-up approach, as proposed by the British. It basically entails the provision of a common market with a common currency to facilitate internal money flows. The common currency provides at the same time externally, a substantive, stable, and regognized world coin. However, and for the time being, without the loss of the trusted home currencies.
Such a proces provides an automatic economic mechanism to the European monetary system. The existing currencies stay in place, while the double currency monetary system gradually smoothes out cultural differences.between the home currency and the common market currency. I.e., until a state of equilibrium is arrved at, making home currencies superfluous, so they disappear..
Because of the nationally expressed relationships of home currencies to the common currency, the money market regulates the differing values through its demand/suppply mechanisms. Thus, the proper relation of the different economies to the common currency is provided intrinsically, and not through questionable intervention from above. If that model would have been pursued, the weak southern economies would successfully have brought cheaper products on the common and world market through their devaluated home currency, but with the outlook for automatically strengthening their economies.to the general level.
As argued, at the preliminary stage of the euro the double currency was a viable option, and strongly suggested by the British. Had it been adopted, the euro crisis would not have resulted, because of that automatic economic mechanisms, accompanied only by peripheral ruling to avoid derailing and excesses. However, presentday politics are still seeking a single currency solution aiming for a power option. In open democratic societies, as most European states favor, the power option is not going to work indefinitely. The drawbacks will soon dominate the doubtful benefits.
We still may hope for the double currency to be introduced in the Eurozone, curing deviations in internal monetary terms, and facilitating the joining in of new members. Yet, we must also fear that much depletion of all eurozone economies will have to show first, before such an implementation is likely to occur. Although the suggested centralized approach is counterforcing modern economic automatisms, it will be hard for Brussels to accept moderation of its role.
A third option keeps the northern and southern monetary systems apart. In a way introducing both of the earlier approaches, but separately. A northern central bank and a southern central bank each have their own common currency, That option has been referred to as Neuro and Zeuro. The weaker countries introduce their familiar top-down monetary system, while the stronger economies operarte their own bottom-up model. Such a system prevents balancing money flows from the north to the south; and instead favors the cultural differences of both economic regions. .
4.3 The Expected Development - Muddling Through
Evidently, current European policy is to go the southern road. In practical terms, it pursues the ´muddling through´ way of makimg policy. While the top-down approach is preferred by Brussels, it is likely to prove not longlasting, as its gaining of poltical power is matched by ever poorer economic results. The power option will create major problems in many participating nations, north and south, and will prevent others from entering. Proper economic solutions are avoided, as long as small incrental measures are accepted.
It would be inappropriate to blame politicians for going along their road. Especially, as precise knowledge of alternatives is lacking. In reality, most arguments being vague and not in numerical monetary terms. Moreover, alternatives also show sharp differences between short term and long term consequences. In democratic systems, politicians usually have a short term responsibility, so their scope is determined by their election period. They may be gone, when serious conflicts arise.
On solid grounds we may expect, that the centralized power option will not cure the euro crisis. Its effect is assumed to be a constant flow of money from the north, to be transferred. It evaporates their economies, while not curing the southern ones, and only loading them with debts they cannot pay back. Because of the step-by-step policies, this process will take many years until the eventual downfall of the eurozone, because of the huge sums involved. It will keep a large part of Europe, and also a part of the world, in some crisis situation. Only if an unsurmountable barrier shows, the process may stall suddenly as uncontrollable political pressures explodes bottom-up.
5 Conclusion - the Way Forward
5.1 Addressing the Euro Crisis
Interestingly, the main monetary supervising bodies are all in a way 'latin controlled'. The ECB by Mario Draghi, the IMF by Christine Lagarde, and the OECD by Angel Gurria. This is in line with the established chracteristic of latin policy to create in the first place hierarchical top down structures.
Its main result is likely that northern countries are brought under southern control mechanisms, and as such will be progressively deprived of their national funds.
At this stage they are already forced to cut substantially on their internal expenditures. Both northern and southern parties are in some deadlock position, as the northern countries do not want the outfall of southern countries out of the eurozone, while they fear a still deeper crisis. Apparently, it is hoped for, that short term financial measures will help or longlasting macro-economic effects will take care.
However, fear might be a bad advisor. For southern countries will continue for a long time to wrestle and regain confidence of moneylenders. What evidently has been lacking from the start in the eurozone is a viable economic automatism. Although one might consider as such the interest rates for lending money by states, this mechaniism did not work in time, and fails nowadays, because of the worsened financial and economic situation some countries are in. Only timely awareness of the bad developments in progress could have prevented this.
In general, if a certain policy is budgetary negative, it should, by itself, immediately be redressed by financial disadvantages, and vice versa. However, for the time being, the main solution, emerging through statements from various politicians, is to transfer more power to Brussels, so Brussels can exert financial power over the member states, and facilitate north-south money flows. As the present situation will lead to major transfers of money, much distrust and economic loss of vigilance, especially in the north, will go along with these suggested proposals. Not the least, while Brussels is known for its lack of modesty itself.
The skipping of the indispensable acculturation phase with real life double currency, and its resulting monetary instability, will leave a long trace of economic disorder in the world. Not the least, while it is worsened by the uninvolved attitude of Brussels, and the fundamental misinterpretation of its role under these extraordinary circumstances..
5.2 The Stalemate Situation
History shows, that power approaches as proposed by Brussels should be the end of a long process of habituation, and practiced only as a last resort, As such, top-down approaches may easily evolve into a major internal conflict between those who support the power, and those who are being controlled and suffer the harsh consequences. In the worst case, resulting populism may demand for war, bringing Europe centuries back in history.. In the best case, the northern countries are being deprived of their own funding, while the southern countries still face unbearable budgetary control..
The mechanism, that has been proposed before the very start of the single currency, is to adopt, at least for the time to come, the double currency, actually being in place, and not the 1999-2002 quasi variant. Each country would have kept its own currency, while the euro would facilitate the common market, and each country would consistently try to match its own currency to the euro. Especially the British delegation foresaw the unbalanced situation of the present, and kept urging its advantages, but was downplaid in a questionable manner..
If having adopted the double currency solution, every participating country would have had the benefit of access to the common currency, while the money market would stabilize the monetary system through the ratios of domestic vs. common currency. An automatic economic market mechanism, that would have avoided misuse and abuse, and favored stability of the common currency..
In the present situation, we have to envisage, that at a certain point in time, the northern countries may not be able to spend money anymore to address the financial, econoimic and political incompatibilities of the eurozone. I.e., without doing serious harm to their own economies and societies. Already, this situation has started, also by those who have a direct interest, such as neighboring countries of the Eurozone, but not being a member yet. Furthermore, the euro is gradually loosing its value through inflation, so impoverishing is akready on the way..
This is in line with the weak countries of the eurozone, that have demonstrated a long history of devaluating their monetary systems. As a consequence, the euro will also devaluate trying to keep them in, without proper measures. For the ECB is buying their inflated bonds at enormous cost paid by the northern countries, unavoidably leading to devaluation.. The crucial issue for the northern countries already is - will our econiomies be able to survive, or will we also be dragged down by the southern countries.
Politics in alltime history is primarily governed by the well-known process of 'muddling through'. Seldomly, drastic solutions are accepted, such as banning countries from the Common Market would imply. One may expect, that the way the euro crisis will evolve is going worse in a step by step manner, hardly visible. Even if many people know that no salvation whatever is to be expected in the future, it is political preference to deal with problems on a day-by-day basis.
That way the eventual downfall will show to be gradual, yet unavoidable. A clear sign on the wall of the attitude to be expected, is in the exorbitant EU-salaries. These are still not moderated by the budgetary problems of its member states, and even trying to expand. A painfully uninvolved attitude, that clarifies beyond belief its unrelated position to the European nations, and their economies.
Therefore, we cannot expect European politicians to intervene in any rational manner, as banks would do in the case of a firm on the brink of bankruptcy. Nor may we expect sustainable solutions to be introduced by Brussels, such as introducing a double currency, or a split of northern and southern economies in two monetary blocks.
The EU in its haste to adopt monetary solutions has turned sour, and the European dream is converting into a nightmare.The biggest currency gamble of all-time history, introducing the euro, has failed beyond imagination. Its main cause lying in overlooking the rationale, that modern economies develop and strive bottom-up. Contrariwise, the proposed EU-measures are still top-down. Thus failing to support, and even harm, the basic economic mechanisms for prosperity; internal and external of the Eurozone. The European Central Bank is actually buying and piling up worthless debt paper of southern countries at immense cost, paying with invaluable northern investment money. - making the ECB a euro trash can, that stands in the way of progress. The EU will gradually paralyze for many years to come all of its economies, not only in the northern Eurozone, but also in the southern one. Economies of a large part of the world will suffer as a result.
A sustainable way out is reintroducing former currencies next to the euro in those countries, that are too weak to keep up.with the northern countries. Thus providing the automatic mechanism that solves monetary inconsistencies. Furthermore, the EU is nowadays unable to control its own budget, failing to divert superfluous activities back to member states, while still attracting new tasks. It also cannot control its own salaries, although asking for drastic budgettary cost cutting measures of the member states.
The EU is in effect becoming a uncontrollable moloch, next to a Development Agency for southern states. The northern states, such as the UK, The Netherlands, Germany, and the Scandinavian countries, including Finland, are in an urgent need of an independent agency. It should monitor and direct closely all of the tranfers of money to the south. If only for preventing a large part of the world from a longlasting depression.
5.3 The Solution
Let us remind the predominant EU-basics. Next to its primacy of EU-law, and its voluntary conferral by the EU member states, the EU boasts subsidiarity and proportionality. The latter principles state (1) that decisions are made at the lowest possible level, and (2) that decisions are only made to the extent necessary to achieve the objectives.
Regarding the monetary crisis and its long aftermath, it has become obvious, that two conflicting groups of interests in the EU have been disregraded. On the one hand a group of states has pretty much tried to control within acceptable limits their budgets throughout the euro period, while on the other hand states have adopted the freedom to deviate to a substantial extent from balanced income-expenditure ratios.The result is now, that within the EU a group of states can be considered 'nursing states', and another group 'suffering states'. Shortly, N-states, and S-states.
No proper decision-making body did represent neither N-one, nor the other S-group.of states. Nevertheless, from 2003 on, both groups did show diverging financial measures or non-measures to their economies, that gradually split the monetary union. (The foregoing three year quasi double currency period (1-1-1999 - 1-1-2002) - lacking real life comparison of currencies - did nothing to make the European population aware of the problem). Huge debts emerged, leading to an ever-growing economic disharmony in the eurozone. To redress this ongoing situation both groups of interests should be represented by an official council, so the problem can be settled in a stable and orderly manner.
To better understand the issue at stake, one should for a moment consider a fully imaginary situation, in which the US and Mexico were to decide on a common political bond, comparable to the EU. It will be obvious that both nations would, for a long time to come, need to keep their own existing authority levels, especially in the realms of finance. However, in the EU this particular level is missing and for a large part to be blamed for the present problem situation. As such, adequate competence failed at high EU-level. What should such an authority level look like?
In the EU nursing states and suffering states shall each have a Council of of Monetary Interests (sometimes shortly to be referred to as CMI's, resp. N-CMI and S-CMI) representing both groups of states.
Each CMI shall discuss and decide upon its monetary issues.
Each CMI will meet at least semiannual, or more frequently as monetary developments of the group and outside require.
Each CMI consists of one representative of each participant state, if so-wished to be accompanied by one aide.
Each decision by a CMI is binding for the explicit period the decision is to cover, and is immediately published.and forwarded to the Chairman of the European Central Bank, who must implement the decision.
If decisions of both CMI's do conflct, the decision of the Nursing Council of Monetary Interests will prevail.
All decisions regarding monetary issues made by both Councils are binding to all EU-institutaions.
Both CMI's can invite an observer of the other Council or from the outside during one of its meetings.
Each CMI will have a secretariat and pemanent geographic seat. The N-CMI in Aachen, Germany. The S-CMI in Venice, Italy.
The N-CMI consists of representatives of EU-states that have less than 60% debt of their GDP, and less than 3% budget deficit, for the last three years.
The S_CMI consists of representatives of EU-states that exceeds 60% debt of their GDP, and more than 3% budget deficit, for the last three years.
Voting in CMI's is unanimously, unless otherwise explicitly stated.
Each CMI is exempt from any decision taken by any EU-institution or any participant state on monetary matters.
Natural members of each CMI are determined by each state in advance of any meeting.
A chairman of each CMI is chosen out of their midst, with a simple majority of votes, for the maximum duration of one year.
If no agreement is reached in putting forward a CMI-chairman, the alphabetical order of the participant state names is followed.
The chairman prepares the agenda of each meeting, having consulted all participants at least fourteen days in advance.
Members are convocated for each meeting, at least one week in advance, which convocation must be acknowledged and notified back to the secretariat of the CMI.
If a member is absent in a CMI-meeting no final decision is made. A provisional decision is sent to all CMI-members, and can be made permanent if all CMI-mmbers underwrite the decision. If no unamous underwriting is arrived at, a new meeting has to be concocated concerning the decision at stake.
If a member fails to attend a meeting two consecutive times without notice, this member is expelled from the CMI..
* The Eurozone states ratio of public debt to GDP (Eurostat 2010) are:
Estonia 6.6
Luxembourg 18.4
Slovenia 38.0
Slovakia 41.0
Finland 48.4
Spain 60.1
Cyprus 60.8
Netherlands 62.7
Malta 68.0
Austra 72.3
France 81.7
Germany 83.2
Portugal 93.0
Ireland 96.2
Belgium 96.8
Italy 119.0
Greece 142.8
How could the state economies of Europe be alleviated and focussed on the future?
The following suggestions seem to be quite obvious, but it may be useful to memorize them. First of all, it is highly necessary to provide the younger generations with a proper sustainable future. The first aim should be to make use of the dynamics of youth, instead of the Laura Dekker type of bashing and expulsion out of Europe. The second aim should be to put reserve sums of the elderly into economic investments, instead of redistributing them over the population at large as recently has happened.
The capital thus brought to life in the form of tax relief should be garanteed by the authorities, so it will flow back to its lenders with a modest interest in due time.
Money from these funds can be borrowed on tentative, but expected sound entrepreneurship, by means of a feasible plan. The general outcome should be such, that surviving enterprises outperform failing ones by at least 70% after the start up and taking up period of three years. Crash courses, i.e. courses that are intense, of short duration, and ending with a tough test, should provide for emerging deficiences in entrepreneural knowledge.
Programs that are feasible, convincing, and aim to meet ecological-energysaving objectives should particularly be welcomed, then, if necessary accepting a higher risk level, and lower threshold of approval. Monitoring all approved programs should produce statistics on success rates vs. failure rates, counting in start up set backs, and a slow taking up of speed. Counseling reports should be produced at the first signs of deviation from the plan, but be restricted in contact, and mostly be exercised by way of the courses already mentioned.
Th type of projects that are likey to be approved, could be solar panels, that closely fit roof tiles, but do not interfere with the general appearance of traditional buildings. Actually, all existing houses should be made energy-neutral. A very demanding, but feasible option for the next decade. Also, making optimal use of tidal streams or other water flows, within economic reach of electricity consumption, should be taken seriously, if test experiments show its viability. Furthermore, if someone can demonstrate safe transfer of inductive energy from the infrastructure to vehicles, such a proposed application deserves close attention.
A crucial judgement criterium is - will there be demand for the product or product range. This demand may be currently at hand, but may also be latent and to be expected in the (near) future. If there is, a modus operandi has to be demonstrated how supply of the demand is safeguarded in an optimal economic way.
Plans that are not beyond the level of ideas, or even still described in general goals, should be rejected, but might stay in the pipeline, waiting for the outcomes of a convincing experiment or test if the applicant has the necessary qualifications to take the idea further.
To be chosen by the applicant, each project should have a small counseling group of elderly entrepreneurs or qualified advisors, assisted by a secretary to report on the project progress.
Interestingly, the main monetary supervising bodies are all in a way 'latin controlled'. The ECB by Mario Draghi, the IMF by Christine Lagarde, and the OECD by Angel Gurria. This is in line with the established chracteristic of latin policy to create in the first place hierarchical top down structures.
Its main result is likely that northern countries are brought under southern control mechanisms, and as such will be progressively deprived of their national funds.
At this stage they are already forced to cut substantially on their internal expenditures. Both northern and southern parties are in some deadlock position, as the northern countries do not want the outfall of southern countries out of the eurozone, while they fear a still deeper crisis. Apparently, it is hoped for, that short term financial measures will help or longlasting macro-economic effects will take care.
However, fear might be a bad advisor. For southern countries will continue for a long time to wrestle and regain confidence of moneylenders. What evidently has been lacking from the start in the eurozone is a viable economic automatism. Although one might consider as such the interest rates for lending money by states, this mechaniism did not work in time, and fails nowadays, because of the worsened financial and economic situation some countries are in. Only timely awareness of the bad developments in progress could have prevented this.
In general, if a certain policy is budgetary negative, it should, by itself, immediately be redressed by financial disadvantages, and vice versa. However, for the time being, the main solution, emerging through statements from various politicians, is to transfer more power to Brussels, so Brussels can exert financial power over the member states, and facilitate north-south money flows. As the present situation will lead to major transfers of money, much distrust and economic loss of vigilance, especially in the north, will go along with these suggested proposals. Not the least, while Brussels is known for its lack of modesty itself.
The skipping of the indispensable acculturation phase with real life double currency, and its resulting monetary instability, will leave a long trace of economic disorder in the world. Not the least, while it is worsened by the uninvolved attitude of Brussels, and the fundamental misinterpretation of its role under these extraordinary circumstances..
5.2 The Stalemate Situation
History shows, that power approaches as proposed by Brussels should be the end of a long process of habituation, and practiced only as a last resort, As such, top-down approaches may easily evolve into a major internal conflict between those who support the power, and those who are being controlled and suffer the harsh consequences. In the worst case, resulting populism may demand for war, bringing Europe centuries back in history.. In the best case, the northern countries are being deprived of their own funding, while the southern countries still face unbearable budgetary control..
The mechanism, that has been proposed before the very start of the single currency, is to adopt, at least for the time to come, the double currency, actually being in place, and not the 1999-2002 quasi variant. Each country would have kept its own currency, while the euro would facilitate the common market, and each country would consistently try to match its own currency to the euro. Especially the British delegation foresaw the unbalanced situation of the present, and kept urging its advantages, but was downplaid in a questionable manner..
If having adopted the double currency solution, every participating country would have had the benefit of access to the common currency, while the money market would stabilize the monetary system through the ratios of domestic vs. common currency. An automatic economic market mechanism, that would have avoided misuse and abuse, and favored stability of the common currency..
In the present situation, we have to envisage, that at a certain point in time, the northern countries may not be able to spend money anymore to address the financial, econoimic and political incompatibilities of the eurozone. I.e., without doing serious harm to their own economies and societies. Already, this situation has started, also by those who have a direct interest, such as neighboring countries of the Eurozone, but not being a member yet. Furthermore, the euro is gradually loosing its value through inflation, so impoverishing is akready on the way..
This is in line with the weak countries of the eurozone, that have demonstrated a long history of devaluating their monetary systems. As a consequence, the euro will also devaluate trying to keep them in, without proper measures. For the ECB is buying their inflated bonds at enormous cost paid by the northern countries, unavoidably leading to devaluation.. The crucial issue for the northern countries already is - will our econiomies be able to survive, or will we also be dragged down by the southern countries.
Politics in alltime history is primarily governed by the well-known process of 'muddling through'. Seldomly, drastic solutions are accepted, such as banning countries from the Common Market would imply. One may expect, that the way the euro crisis will evolve is going worse in a step by step manner, hardly visible. Even if many people know that no salvation whatever is to be expected in the future, it is political preference to deal with problems on a day-by-day basis.
That way the eventual downfall will show to be gradual, yet unavoidable. A clear sign on the wall of the attitude to be expected, is in the exorbitant EU-salaries. These are still not moderated by the budgetary problems of its member states, and even trying to expand. A painfully uninvolved attitude, that clarifies beyond belief its unrelated position to the European nations, and their economies.
Therefore, we cannot expect European politicians to intervene in any rational manner, as banks would do in the case of a firm on the brink of bankruptcy. Nor may we expect sustainable solutions to be introduced by Brussels, such as introducing a double currency, or a split of northern and southern economies in two monetary blocks.
The EU in its haste to adopt monetary solutions has turned sour, and the European dream is converting into a nightmare.The biggest currency gamble of all-time history, introducing the euro, has failed beyond imagination. Its main cause lying in overlooking the rationale, that modern economies develop and strive bottom-up. Contrariwise, the proposed EU-measures are still top-down. Thus failing to support, and even harm, the basic economic mechanisms for prosperity; internal and external of the Eurozone. The European Central Bank is actually buying and piling up worthless debt paper of southern countries at immense cost, paying with invaluable northern investment money. - making the ECB a euro trash can, that stands in the way of progress. The EU will gradually paralyze for many years to come all of its economies, not only in the northern Eurozone, but also in the southern one. Economies of a large part of the world will suffer as a result.
A sustainable way out is reintroducing former currencies next to the euro in those countries, that are too weak to keep up.with the northern countries. Thus providing the automatic mechanism that solves monetary inconsistencies. Furthermore, the EU is nowadays unable to control its own budget, failing to divert superfluous activities back to member states, while still attracting new tasks. It also cannot control its own salaries, although asking for drastic budgettary cost cutting measures of the member states.
The EU is in effect becoming a uncontrollable moloch, next to a Development Agency for southern states. The northern states, such as the UK, The Netherlands, Germany, and the Scandinavian countries, including Finland, are in an urgent need of an independent agency. It should monitor and direct closely all of the tranfers of money to the south. If only for preventing a large part of the world from a longlasting depression.
5.3 The Solution
Let us remind the predominant EU-basics. Next to its primacy of EU-law, and its voluntary conferral by the EU member states, the EU boasts subsidiarity and proportionality. The latter principles state (1) that decisions are made at the lowest possible level, and (2) that decisions are only made to the extent necessary to achieve the objectives.
Regarding the monetary crisis and its long aftermath, it has become obvious, that two conflicting groups of interests in the EU have been disregraded. On the one hand a group of states has pretty much tried to control within acceptable limits their budgets throughout the euro period, while on the other hand states have adopted the freedom to deviate to a substantial extent from balanced income-expenditure ratios.The result is now, that within the EU a group of states can be considered 'nursing states', and another group 'suffering states'. Shortly, N-states, and S-states.
No proper decision-making body did represent neither N-one, nor the other S-group.of states. Nevertheless, from 2003 on, both groups did show diverging financial measures or non-measures to their economies, that gradually split the monetary union. (The foregoing three year quasi double currency period (1-1-1999 - 1-1-2002) - lacking real life comparison of currencies - did nothing to make the European population aware of the problem). Huge debts emerged, leading to an ever-growing economic disharmony in the eurozone. To redress this ongoing situation both groups of interests should be represented by an official council, so the problem can be settled in a stable and orderly manner.
To better understand the issue at stake, one should for a moment consider a fully imaginary situation, in which the US and Mexico were to decide on a common political bond, comparable to the EU. It will be obvious that both nations would, for a long time to come, need to keep their own existing authority levels, especially in the realms of finance. However, in the EU this particular level is missing and for a large part to be blamed for the present problem situation. As such, adequate competence failed at high EU-level. What should such an authority level look like?
In the EU nursing states and suffering states shall each have a Council of of Monetary Interests (sometimes shortly to be referred to as CMI's, resp. N-CMI and S-CMI) representing both groups of states.
Each CMI shall discuss and decide upon its monetary issues.
Each CMI will meet at least semiannual, or more frequently as monetary developments of the group and outside require.
Each CMI consists of one representative of each participant state, if so-wished to be accompanied by one aide.
Each decision by a CMI is binding for the explicit period the decision is to cover, and is immediately published.and forwarded to the Chairman of the European Central Bank, who must implement the decision.
If decisions of both CMI's do conflct, the decision of the Nursing Council of Monetary Interests will prevail.
All decisions regarding monetary issues made by both Councils are binding to all EU-institutaions.
Both CMI's can invite an observer of the other Council or from the outside during one of its meetings.
Each CMI will have a secretariat and pemanent geographic seat. The N-CMI in Aachen, Germany. The S-CMI in Venice, Italy.
The N-CMI consists of representatives of EU-states that have less than 60% debt of their GDP, and less than 3% budget deficit, for the last three years.
The S_CMI consists of representatives of EU-states that exceeds 60% debt of their GDP, and more than 3% budget deficit, for the last three years.
Voting in CMI's is unanimously, unless otherwise explicitly stated.
Each CMI is exempt from any decision taken by any EU-institution or any participant state on monetary matters.
Natural members of each CMI are determined by each state in advance of any meeting.
A chairman of each CMI is chosen out of their midst, with a simple majority of votes, for the maximum duration of one year.
If no agreement is reached in putting forward a CMI-chairman, the alphabetical order of the participant state names is followed.
The chairman prepares the agenda of each meeting, having consulted all participants at least fourteen days in advance.
Members are convocated for each meeting, at least one week in advance, which convocation must be acknowledged and notified back to the secretariat of the CMI.
If a member is absent in a CMI-meeting no final decision is made. A provisional decision is sent to all CMI-members, and can be made permanent if all CMI-mmbers underwrite the decision. If no unamous underwriting is arrived at, a new meeting has to be concocated concerning the decision at stake.
If a member fails to attend a meeting two consecutive times without notice, this member is expelled from the CMI..
* The Eurozone states ratio of public debt to GDP (Eurostat 2010) are:
Estonia 6.6
Luxembourg 18.4
Slovenia 38.0
Slovakia 41.0
Finland 48.4
Spain 60.1
Cyprus 60.8
Netherlands 62.7
Malta 68.0
Austra 72.3
France 81.7
Germany 83.2
Portugal 93.0
Ireland 96.2
Belgium 96.8
Italy 119.0
Greece 142.8
How could the state economies of Europe be alleviated and focussed on the future?
The following suggestions seem to be quite obvious, but it may be useful to memorize them. First of all, it is highly necessary to provide the younger generations with a proper sustainable future. The first aim should be to make use of the dynamics of youth, instead of the Laura Dekker type of bashing and expulsion out of Europe. The second aim should be to put reserve sums of the elderly into economic investments, instead of redistributing them over the population at large as recently has happened.
The capital thus brought to life in the form of tax relief should be garanteed by the authorities, so it will flow back to its lenders with a modest interest in due time.
Money from these funds can be borrowed on tentative, but expected sound entrepreneurship, by means of a feasible plan. The general outcome should be such, that surviving enterprises outperform failing ones by at least 70% after the start up and taking up period of three years. Crash courses, i.e. courses that are intense, of short duration, and ending with a tough test, should provide for emerging deficiences in entrepreneural knowledge.
Programs that are feasible, convincing, and aim to meet ecological-energysaving objectives should particularly be welcomed, then, if necessary accepting a higher risk level, and lower threshold of approval. Monitoring all approved programs should produce statistics on success rates vs. failure rates, counting in start up set backs, and a slow taking up of speed. Counseling reports should be produced at the first signs of deviation from the plan, but be restricted in contact, and mostly be exercised by way of the courses already mentioned.
Th type of projects that are likey to be approved, could be solar panels, that closely fit roof tiles, but do not interfere with the general appearance of traditional buildings. Actually, all existing houses should be made energy-neutral. A very demanding, but feasible option for the next decade. Also, making optimal use of tidal streams or other water flows, within economic reach of electricity consumption, should be taken seriously, if test experiments show its viability. Furthermore, if someone can demonstrate safe transfer of inductive energy from the infrastructure to vehicles, such a proposed application deserves close attention.
A crucial judgement criterium is - will there be demand for the product or product range. This demand may be currently at hand, but may also be latent and to be expected in the (near) future. If there is, a modus operandi has to be demonstrated how supply of the demand is safeguarded in an optimal economic way.
Plans that are not beyond the level of ideas, or even still described in general goals, should be rejected, but might stay in the pipeline, waiting for the outcomes of a convincing experiment or test if the applicant has the necessary qualifications to take the idea further.
To be chosen by the applicant, each project should have a small counseling group of elderly entrepreneurs or qualified advisors, assisted by a secretary to report on the project progress.
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