The European Project: the future of the EU.

[Timsup2nothin]

More that the UK and France needed it to prove they were still great powers and as that claim grew increasingly threadbare they needed it to hand on to their Security Council seats.
In the 50-70s a lot of people believed the USSR needed to be deterred but without US backing I don't think nukes alone would've been a convincing deterrent.

Nukes are the only thing that has ever deterred the US. That's why it always surprises me how people can't understand North Korea's obsession.

 

[Hrothbern]

Nukes are the only thing that has ever deterred the US. That's why it always surprises me how people can't understand North Korea's obsession.

Or is it: damage and body bags on US home soil is the only thing that can deterr the US ?

 

[Timsup2nothin]

Or is it: damage and body bags on US home soil is the only thing that can deterr the US ?

Well, that sort of follows I suppose. From a practical standpoint I think given the current state of world military forces the only way to generate damage and body bags on US soil in significant quantity would be nukes.

 

[Hrothbern]

Well, that sort of follows I suppose. From a practical standpoint I think given the current state of world military forces the only way to generate damage and body bags on US soil in significant quantity would be nukes.

yes

I try to understand that what triggers the deterence
Empires always try to fight them on foreign soil
That's were Hannibal gave the Roman empire that big fright
He could march to Rome itself, could siege Rome itself (ofc useless without siege devices and engineering) but the very idea... like sacrilege

not fear I think key... but in the minds of the people... the fright and sacrilege of the invulnerability.... of the eternity of an eternal Rome.

 

[gangleri2001]

How much am I enjoying sering the EU a little bit closer to its end. For those of us who have always been against it it's a wet dream come true.

 

[Hrothbern]

How much am I enjoying sering the EU a little bit closer to its end. For those of us who have always been against it it's a wet dream come true.

I hear that since I was a teenager
There is always some crisis
Although not as big as having a government that is a military junta

 

[innonimatu]

Meh, I'd take another military junta like the last one we had over here over the current EU. That junta wanted to set up (and did) a national democratic government. The EU wants to end national democratic government.

 

[gangleri2001]

Pro-democracy military junta that rebels using... carnations. You Portuguese people are a bunch of weirdos.

Anyway, I don't know what Kool-aid you have been drinking, Hrothbern, but the truth is that EU (and for that matter its cold-war-era predecessor the EEC as well) hasn't done ANYTHING to put an end to military dictatorships or even prevent a single war.

By the time southern Europe got rid of its dictatorships in the 1970's the UK and France were licking their wounds after losing their colonial empires, Germany was divided, the EEC was nothing but a series of commercial treaties and everybody was more concerned with the price of oil than with the advancement of democracy in southern Europe. The end of these dictatorships came due to internal factors (Portugal's case), international pressure mainly coming from the US and the anglo-sphere (Spain's case) or a mixture of both (Greece's case). Europe didn't play any role or it did play a minor role at most.

 

[EnglishEdward]

Good posts on that would include the domestic political situation of some countries who were either very important for the 500 B package or very vocal.
And those underlying factors are not yet matured... we get still the meeting on that with the PMs of the EU-27


And some of those underlying factors are I think strategic EU-union & Eurozone versus EU-Federation elements (with a strong eye on the own national interest).
The UK is after all now outside the internal EU equations. That is a landslide difference on EU-future profile thoughts and differences between countries.
You know Yeekim... the very fact that you guys from accross the Iron curtain came in changed among other factors the balance regarding federation thinking in a fundamental way.
Somehow that has not really sunk in yet among the old guard among politicians and the newsmedia... and therefore also the broad populations.
Staus quo inertia is very strong in the EU... both desired as complicating confusing.


Writing something meaningful on all that in a diplomatic way with reading between the lines would need a book

Writing something meaningful on that in a CFC post format lenght would cause many misunderstandings because of differing appreciations of the past, the positions and so many more context you really need as somewhat shared realities. Some countries are still living in (imperial) pasts.

I take the liberty of summarising what you are saying:


"it is too complicated for most to properly understand".

If so, I think I must agree.

But without understanding, meaningful democratic accountability
is simply impossible. Hence a desire by many to opt out.

I took the view that the replacement of the adoption of a
formal constitution with the Lisbon treaty was a mistake.

I suspect that future historians may view the decision by the
French electorate to reject amending their own constitution to
be compatible with the draft EU contutution, rather than the
peripheral UK's vote to Leave, as being the key true hinge point.

 

[r16]

ı can rant about whom the French and British deter . Not Germany , because Russians would suffer far more from , what , the fourth or fifth Reich . Not America because you would buy people before Putin proved you could also hack elections . Not Russia , because we all know they are savages and would fire back 10 times . So , France went and immediately armed Israel , before Tel Aviv became an American colony or made America a Zionist colony , depending on your personal preference . It is all about scaring Brown people , forcing them to respect the second tier White people and let them keep plundering to their hearts content because if you were to embarress (damn spelling) the French or the British they wouldn't dare fire on you but imply they would so , Uncle Sam and Uncle Joe's followers would have to come and teach you to behave .

 

[Hrothbern]

It looks like that we have a serious issue with the power to intervene monetary of the ECB, the Central Bank of 19 Eurozone EU member states.
The German supreme court ruled that the ECB has 3 months to defend her "illegal" monetary behaviour under the German constitution.
Translated: There should have been less monetary invention since 2015 to the benefit of the financially weaker Eurozone countries by decreasing the interest rates on bonds, which decrease the interests, the benefits of German people's bank saving accounts.

German high court warns ECB that bond buying could be illegal
Constitutional Court gives ECB 3 months to justify asset purchase program.

By MATTHEW KARNITSCHNIG

5/5/20, 11:14 AM CET


Updated 5/5/20, 12:08 PM CET

BERLIN – Germany’s highest court ruled that the European Central Bank’s 2015 bond-buying program would be illegal under German law unless the ECB can prove the purchases are justified.

The court stopped short of ordering an end to Germany’s participation in the program via the Bundesbank, granting the ECB three months to provide an acceptable justification for the practice.


The decision by the Karlsruhe-based Federal Constitutional Court is the culmination of a yearslong challenge to the ECB purchases by a group of German economic professors and politicians. The plaintiffs argued that the ECB is effectively financing governments with the program, a strategy that they contend puts German taxpayers at a disadvantage and that will undermine the euro in the long term. The ECB has purchased more than €2 trillion worth of eurozone bonds since the program began in 2015.

The justices said the decision does not affect the ECB’s corona-related emergency measures such as the €750 billion asset purchase program it announced in March.

While the court said the ECB went beyond its mandate by introducing the 2015 program, known as public sector asset purchase program or PSPP, it put most of the blame on the Court of Justice of the EU, which approved the practice in a separate ruling.

In announcing the ruling, President Andreas Voßkuhle said the EU court had approved a practice that “was obviously not covered” by the ECB’s mandate.

In effect, the German court said it would not honor the EU court decision, an unprecedented step that legal experts say could have far-reaching consequences for Europe’s justice system.

https://www.politico.eu/article/german-high-court-warns-ecb-that-bond-buying-could-be-illegal/

Here some more comment on that ruling by the BBC
https://www.bbc.com/news/world-europe-52542993


And here a Dutch article including critcism on the quality of the judgment:

German judges commit coup on ECB policy
In a judgment on Tuesday, the German Constitutional Court (BVG) raised serious doubts about the future of current buy-back programs of the European Central Bank (ECB). It is true that, according to the German courts, those purchases are not contrary to national law. But they demand that the ECB launch a proportionality test within three months in defense of the contested buying-up program. If not, according to the BVG, the German central bank can no longer participate in that buy-back program.

The judgment puts a bomb on the functioning of the ECB, and the relationship between national courts and the Court of Justice of the EU. The latter, the EU's supreme judicial body, previously approved the buy-back programs. But the BVG says that the EU Court has not done its job properly.

Last year, the President of the Constitutional Court, Andreas Vosskuhle, had said that his court can only disregard a European decision if it was "arbitrary and very unreasonable".

The ruling by the Constitutional Court has a significant impact on the markets. For example, the euro is now down 0.7% against the dollar, at $ 1.0835. The stock exchanges, which posted gains of around 2%, have lost about one percent, although the bottom seems to have been reached again.

The reaction on interest rate markets is certainly not that bad. Initially, Italian interest rates rose quite quickly, before quickly dropping back to pre-judgment levels. This may be due to the fact that the ruling leaves the special pandemic buy-back program unaffected, and is only critical of the longer running 'regular' ECB program.

Stumbling stone
The main stumbling block in the Karlsruhe case is the Public Sector Purchase Program (PSPP), an ECB buy-back program that ran from 2015 to the end of 2018 and amounted to some € 2,170 billion in government bonds. As with Frankfurt's current efforts, it aimed to reduce the interest rates that euro area countries have to pay on their debt. It has resumed since November 2019, with monthly purchases at a rate of € 20 billion. According to critics, that would amount to monetary financing, which is forbidden to the ECB by the European Treaty. The European Court of Justice had already ruled in 2017 that the PSPP was legitimized. The German Constitutional Court then organized a hearing to determine how the European Court should deal with the interpretation of European law. After all, the Bundesverfassungsgericht considers itself to be the forerunner in determining the limits of the transfer of powers to the EU by the German parliament.

Clear limits
The verdict does not apply to the new programs that the ECB has launched since the start of the corona crisis. Problems arise on the horizon there, too, particularly with the Pandemic Emergency Purchasing Program (PEPP), a recent ECB buy-back program designed to cut government bond yields. This gives countries the space to issue bonds to finance emergency measures, without paying themselves blue. There are no clear limits or conditions regarding the creditworthiness of debt-issuing countries.

It is expected that there will be new complaints about this in Germany, after which the European Court of Justice will also be asked for advice. The outcome is uncertain, but is likely to take years to come. For the time being, all eyes are on what the ECB will answer to Karlsruhe.

This judgment will also be heard in Luxembourg. In essence, a German national court says that the highest judges in Europe have not done their job well. They therefore put it aside and demand that an independent central bank be accountable within three months.
Or else.

Criticism on the German court
“It is surprising that the BVG claims that the ECB does not assess the economic policy consequences of its actions,” director Güntram Wolff of the Brussels think tank Bruegel responded to the statement. "The judges have apparently never seen a central bank inside. And it is just as astonishing that they claim that they are capable of making such an assessment as BVG and the Court of Justice of the EU. '

Vítor Constâncio, former member of the Executive Board of the ECB, predicted in a response that new German cases are soon emerging against the PEPP program that the ECB started to combat the effects of the corona crisis. He called the German court's distinction between monetary policy and economic policy plus the requirement that the policy be "proportional" and "ridiculous".

The Court of Justice of the EU does not respond to the judgment of the Bundesverfassungsgericht. The Court never does this in decisions of national courts.

https://fd.nl/economie-politiek/1343635/duits-rechters-plegen-coup-op-ecb-beleid

 

[EnglishEdward]

Well @Hrothbern, that is what comes from trying to build a superstate on the
basis of a succession of treaties rather than codifying it in a clear cut constitution.

 

[Hrothbern]

Well @Hrothbern, that is what comes from trying to build a superstate on the
basis of a succession of treaties rather than codifying it in a clear cut constitution.

smile

Forget about that Superstate... how many EU countries want actually a federation ? How realistic is that ? That ship sailed when the East-European countries joined.
Perhaps the bankers who paid the Macron election campaign want it as something to aim for... without intending really ever getting there... the optimal position I guess for Big Money etc.


You could say:
apparently there was never enough support in Germany to change the constitution (in time) and the German politicians overstretched their authority to compromise to France and the South.

But let's see if this verdict will hold
we will only need to wait 3 months for the next act

 

[innonimatu]

This ruling had been delayed, but it finally came and was really no shock, this decision was predicted. The official press release on the ruling itself is here, version in english.
Some of the criticism addressed against it, like that corrupt cynic Constâncio asking which law was violated so that it can be changed, is pure propaganda: they specified it violated Article 123 of the TFEU, which is an EU treaty signed by Germany, not even Germany's law to change. The ECB and the related european treaties was set up this way and Constâncio is not just a banker, he's one of the politicians responsible for negotiating that original decision.

There is no willingness to create any kind of federal european state. And given that the Euro is a damaging structure without it the best course of action would be to dismantle the thing orderly and salvage what can be salvaged of european cooperation. But that too is a path that has been refused. Too many important people would have to admit mistakes, and by now the process of ending the Euro would cause some holders of wealth claims to feel losers in the process. So much for an orderly end to it.

Mind you, what I really like in this german court's decision is this part:

The review undertaken by the CJEU with regard to whether the ECB’s decisions on the PSPP satisfy the principle of proportionality is not comprehensible; to this extent, the judgment was thus rendered ultra vires.
[...]
if the Member States were to completely refrain from conducting any kind of ultra vires review, they would grant EU organs exclusive authority over the Treaties even in cases where the EU adopts a legal interpretation that would essentially amount to a treaty amendment or an expansion of its competences.

So much for the alleged supremacy of the Court of Justice of the European Union. More countries need have such decisions made by their courts. I cannot but applaud this decision, whatever its practical effect.

Now, on to question juridically the decisions of the "Eurogroup", most of which were outright illegal... let the juridical beast of institutions, treaties, laws and rules built to chain the democratic options of the citizens of the countries of Europe devore itself.

 

[Hrothbern]

Too many important people would have to admit mistakes

Delors is indeed still alive
Let's see how those important people can protect the Euro, or one Euro for such a diversity of countries regarding financial-economic culture and economical fingerprint.

 

[gangleri2001]

I would have liked to see the Delors' or Habermas' face when they heard of the ruling

I'd really like to tell them: You wanted to put an end to nationalism and the most noble idea of the nation-state? Well now nationalism and the nation-state are gonna put an end to your BS. Enjoy the last days if the EU while you still can.

 

[Hrothbern]

Here a too nice article on the infamous 3% budget deficit standard of the EU not to have in this thread.

1982: President Mitterand was facing a forecasted 100 Billion budget deficit and needed a trick to survive the political tumult that would follow when it would become public.
(For the oldies here on the forum, these are already the new French Francs after the 1960 revaluation of 100 old Francs for 1 new Franc).

Two minor civil servants were ordered to visit Mitterand and it took an hour work to find a solution.
One of them, Guy Abeille, tells how it happened:


From yesterday's Dutch newspaper NRC, google translated:

"3 percent standard has no economic basis. It's a political number '
Guy Abeille EU countries use the 3% standard on the budget deficit. That number is based on chance, says Guy Abeille.


The corona crisis is such a shock to our economies that the European finance ministers decided in March to be flexible with the fiscal rules. Since then, everyone has been pumping money into the economy and you no longer hear anyone about the 3 percent, the maximum budget deficit. How bad is that? Can we ever go back there, or do we need a new system? NRC asked Guy Abeille, one of the "inventors" of the 3 percent.

Were you at the beginning of the 3 percent?
"Yes, with a colleague. We worked at the Ministry of Finance in Rue de Rivoli, he worked as a fonctionnaire, me on a contract basis. Each month we tracked government revenues and expenditures and calculated the year-end deficit. That sum then landed several floors higher with the minister. One day in 1982 the two of us had to come to the Director General. François Mitterrand was president for a year. Before taking office in 1981, the deficit was 30 billion. After taking office it rose to 55 billion, almost double: Mitterrand increased wages and nationalized companies. And summer 1982 suddenly came to 100 billion in our sights. That was enormous. ”

Did you raise the alarm?
"Not at all. No one paid attention to budget deficit or debt in those days. We looked at the franc, which was getting weaker and weaker, and inflation. The only problem was that Mitterrand was hit by the opposition. If he reported that the deficit was three times as high as in 1981, they would make mincemeat of him. Then we might have to devalue again. 100 billion sounded horrifying. So it was more of a, uh… ”

... political communication problem?
"Exactly. They were looking for a formula so that Mitterrand could put it differently. That is why the Director-General summoned us. We suggested: let's link it to GDP. ”


Did they do that in other countries?
"No, nowhere. No one had budget standards or ceilings. Not even Germany. We just tried something. GDP was 3,300 billion, the deficit was close to 100 billion. So a nice, clean figure came out: the deficit was just under 3 percent of GDP. If Mitterrand put it this way, it would sound business-like. Exactly what he wanted. ”

So the director general took over your plan?
"It was not a plan. We had nothing on paper. It was a formula we came up with in an hour. It was so simple that it stuck. ”

Even with a politician.
"You laugh, but that was exactly the idea. Politicians want simplicity. This was simplicity. President Mitterrand used it. Budget Minister Fabius brought the Herald Tribune with it. The fuss failed to materialize. The opposition did nothing with it. The press suddenly wrote about the deficit as a percentage. Thus the 3 percent became an institution. And a standard. Mitterrand sometimes reminded the government to "respect the 3 percent limit."

Is 3 percent an arbitrary number?
"Yes. It has no economic basis. It is a political number. ”
[being exactly the budget deficit of that 100 Billion as % of the GDP of France at that moment]

Still, in 2012 it nearly tore up the Eurozone.
"That's the way things go: people don't care about the budget deficit at first. Then they see nothing else. ”

How did 3 percent become a European standard?
“In the early 1990s, government leaders rigged up a single European currency. Back then, northern countries wanted budgetary discipline, fearing Italy, which had been deeply in debt since the 1970s. Before the Maastricht Treaty, at a meeting in The Hague, Jean-Claude Trichet, then senior finance officer, said: We have a 3 percent limit in France, and it is working well. Okay, the others said. Thus it has become the European standard. And later a global standard. ”

Global?
"Israel, India and other countries also use that 3 percent."

So it wasn't the Germans who proposed this limit?
"No, the French. Trichet has told this story several times. Hans Tietmeyer, former president of the Bundesbank, confirmed this in his book Herausforderung Euro. The limit for government debt, 60 percent of GDP, was determined more in consultation. Italy had 100 percent at the time. Most countries were at 40 percent. Germany was, at the time of reunification, at 55. They said, let's do 60 percent. ”

So that is also arbitrary?
"Yes. Each country was in a completely different situation, and had different calculations. We compared choux et carottes, apples and pears. Moreover, it remains strange that you take a photo of a certain moment and that you stick to it for decades. ”

Could it also have been 70 percent?
"Sure. Still, as time went on, those 3 percent and 60 percent got harder. Chancellor Kohl insisted that the euro "stark who that Mark" should be. I still hear him say in the Bundestag that the budget limit was "drei komma null". Initially it was mainly an accession criterion for new euro countries. In 1996 it was enshrined in the Stability and Growth Pact and became permanent for all euro area countries, with sanctions and all. During the euro crisis, both limits were cast in concrete, in a six-pack and a two-pack. ”

Now everyone goes beyond those limits.
"Yes, but through no fault of his own. This is not the euro crisis. That is why the limits have now been put on ice. ”

Are we going back to 3 percent?
"That is not possible for the time being. But in the long run you have to have something. That's the crazy thing: 3 percent is an arbitrary number, but we can't live without it either. ”

How do we solve that?
"Maybe we should come up with a better system. 3 percent don't have to go overboard, but now it's too much one size fits all. You can solve that by distinguishing three categories. The first, which are necessary expenses that each state finances nationally with its revenues: justice, benefits, education, and so on. You can be strict about that: 3 percent, enough.

"The second category is cyclical expenditure, such as that for the corona crisis. You have to look at it every two or three years. European countries must jointly estimate which country needs what. Then you say: Germany may build a deficit of 4 percent, Italy has been hit hard and may temporarily go to 7 percent. And so on. You calculate it per country. No more apples and pears. ”

And the third category?
"These are strategic European expenditures, for the common good. Everyone understands that Europe needs to be empowered in the world. Everyone wants that too. But then countries have to invest in it. They don't do that now because of the stigma and threat of sanctions. ”

Is that possible without European income, such as environmental or digital taxes?
"No. We should have had it by now. ”

Should "deficit" get a more positive charge?
"Shortage now means," He can't manage his affairs. "Sometimes that's right. But there are also desirable shortages. Take investments in European research. We skimp on that. It takes years before you have a return. But American and Chinese companies are now more powerful than European ones. It would be nice if people see that not only saving, but also spending money can be a virtue. ”

Nationally, this is easier to understand than European.
"I understand that many Dutch people do not trust Italy. But the biggest mistakes there were made in the years 1975-1996. That has nothing to do with this pandemic. It is good if European countries now help Italy with European subsidies, and not burden it with extra debt or sanctions. ”

GUY ABEILLE STATISTIAN
Guy Abeille (1950) worked in the Budget Department in the Ministry of Finance in Paris in the 1980s. Later he worked at the French Energy Agency.
He graduated as a statistician from the School of Statistics and Economic Governance (ENSAE), where he also worked as a teacher for several years.

https://www.nrc.nl/nieuws/2020/07/06/limiet-van-3-procent-was-een-arbitrair-formuletje-a4005054

 

[EnglishEdward]

This confirms our beliefs that EU metrics are set
to what best suits the two most powerful players:

France: own deficit at 3% of GDP (it sounded better that way) copied to become the EU policy
Germany: no more than 60% government debt (because reunification put them at 55%): copied to become EU policy.

Other member states' considerations all being diregarded.

 

[uppi]

Interesting in how it came to be. But I would have been very surprised if the number was not political.

 

[mitsho]

That's just human. And it was another time. That is what bureaucracy is all about, reducing the chance that such numbers are set by chance rather than well-founded rationales.

And btw., @EnglishEdward, the same arbitrariness is true for metrics set by and in the UK.