Saturday, April 17, 2010

The Decline of the European Monetary Union

As a federalist, I have long been a skeptic of European centrism, especially the European Monetary Union that replaced the national currencies of its members with the Euro. At the time of its formation, I expected that union eventually to fail because of the loss of sovereignty of each member state over monetary policy to respond to changing conditions. That failure has begun.

Overspending in some members of the Eurozone has weakened the value of the Euro by causing inflation. Greece has had to launch a drastic austerity program in order to reduce its massive debt. Portugal’s debt rating has decreased, while Ireland and even Spain and Italy are also under pressure to reduce their debt.

It has become necessary for the wealthier states that use the Euro, namely Germany, together with the International Monetary Fund, to bail out Greece. Greece has lost temporarily even the sovereign right to vote at the European Monetary Union over monetary policy.

There are other problems with European integration in general. I was skeptical from the beginning also of the creation of the European free trade zone, which, because the European Union did not adopt a free trade policy with the United States, appeared to be intended as a rival to the U.S. instead of a partner. Free trade within the European Union makes economic sense, just as it does within the American Union. However, just as the American federal government has centralized more and more power, those who advocate a European superstate have been centralizing more and more power in the European Union. For example, the integration of entry and immigration policies within the E.U. has caused security problems and disparities and European coordination over defense and foreign policy has encouraged weakness, while European integration has supplanted Europe’s Christian heritage with the faith of Statism. European integration minimizes the cultural diversity of Europe, in the name of “diversity,” which usually refers only to non-Christians. Indeed, growing European integration increasingly has reduced the sovereignty of its member states in ever more ways.

Perhaps the Greek debt crisis will encourage the European centralizers to reconsider their ideas and instead adopt a more minimalist approach to federalism, just as Americans should demand that the federal government abide by the principles of the Framers of the United States Constitution and limit federal power only to federal matters. Both the European and American Unions should respect the principle of subsidiarity by leaving other powers in the hands of their member states, where it is closer to the people.

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