Fronteza

The Integrated Europe

The idea of the integrated Europe is not new. Political leaders have strived for establishing the European Empire for ages. The ball in this game of domination has changed hands repeatedly. But the key principles of domination were steadfast. The political leaders strived for strengthening their political influence over other countries of the European region and used religious, financial and military toolsets to reach that goal. That is the formation of the steadfast political union was in the heart of their activities and everything was subdued to this goal: society, finances, military force, religion, etc.

The life duration and strength of a union is determined by the two key principles: the common goal and the concurrence of interests. The union can survive while it has the common goal in its heart and while the interests of parties are concurred and have the relevant attachment points. When one party starts cheating on others, the union can be easily broken by external party using different approaches. Thus the very existence of the union is determined by the concurrence of political interests.

Whatever you say, the political interests will always drive the development of society. Hence any union cannot survive without the sound political union. Every person has its own interests. Every society has its own interests. A person can develop its own ideas and interests or they can be imposed upon it by more strong-willed persons or by persons who hold a higher social position. The basic interests of the average person are driven by its basic needs: the improvement of living conditions, the safety and stability. The interests of the average person are applied to itself and its nearest relatives.

Though the interests of the political leader are applied to the society, they are driven by its own ideas of the social development. The extraverted political leader strives for spreading its power over other societies by means of economic, military and financial toolsets, let alone the desire to gain access to resources and new markets. It develops aggressive foreign policy thus (for example, the Big Game between the Britain and Russian Empires in the Central Asia). The introverted political leader strives for gradually developing its society and uses economic and political approaches to establish the reliable economic and political relationships with other societies. It does not strive to dominate them to force own ideas on them and promote own interests thus.

Let alone other national and cultural issues, as I stressed, the union can survive while it has the common idea and while its parties are bound by common interests. The presence of sound political rules and of the relevant interest attachment points is vital to any union. The monetary and economic toolsets are conductors of political will and interests. Obviously, the idea of the European Monetary Fund pursues two aims. The first aim is to mitigate the influence of the International Monetary Fund on the region (the influence of the United States thus). The second aim is to create a toolset to enforce the political interests in the region. The second aim has to do with the endeavour to strengthen the political union indirectly.

The very existence of the European Monetary Fund will undermine positions of European players in the monetary realm, thus undermine their political weight in the region. Any toolset is subdued to political interests and ambitions. As I explained above, every political leader and every nation concerns for national interests first of all. By the very nature, before committing to do something, you ask yourself a question: what is the use of that for me? You may have some material interests or just feel the moral delight to do something. Political leaders concern for the national interests first of all. They are supposed to do that, at least. The national interests are expressed in the form of political interests and economic benefits.

A union always has a leader. The political union has the political leader as well. Otherwise it is a political merry-go-round. If interests of union parties are attached to the interests of the union’s leader, then the union can be considered as politically coherent. The monetary and economic toolsets in the politically coherent union is used to develop the common line of interests and enforce the common political rules in order to preserve the coherence and strength of the union. If the union is politically weak and if its parties do not have the relevant interest attachment points, then union toolsets will be used by the leading party to force the political ideas on others and promote own interests. Moreover, such a union can be disorganized by external parties using different destabilization strategies.

Hence, the idea of the European Monetary Fund is reasonable if there is a political cohesion in the union. I do not think there is a strong political cohesion in the European Union now. The implementation of the European Monetary Fund will be lop-sided and even if it helps to secure the monetary stability to the certain extent, it will not facilitate the creation of the sound political union. The political union is vital in the multinational and multicultural environment such as the European Union. Once the political attachment points are found and cemented, the economic attachment points must be found and cemented.

Frankly, I do not consider a union bound by a single currency as a good idea. The history teaches us that it is hard to maintain political balance in the union and quakes of different magnitude take place repeatedly. The root cause is the leading persons itself, their personal qualities, ambitions and intelligence. The qualities of the leading person are amplified by its political team.

The single currency is a two-edged weapon. On the one hand, it facilitates the enforcement of political interests and monetary cohesion. On the other hand, it throws a running knot on the leading party of the union: every time when a quake takes place in the union, it is leveraged by external parties to weaken union’s positions. In the light of that, the economic cohesion is vital to the union. The economic cohesion takes the second place after the political cohesion. The economic balance rules together with relevant attachment points of the economic strategies of the union’s parties allow creating the economic cohesion and developing the union’s economic development strategy. The more parties in the union, the harder it is to find the relevant attachment points, but it is a must.

The modern European Union lacks for both the political and economic cohesion. Thus the European Monetary Fund may solve some of existing monetary problems and fill some of monetary gaps in the European Union, but it will not help to create the sound political and economic cohesion in the long run. Now the political and economic ground of the Union is very shaky and it is leveraged by different financial speculators. In the next discussion I will consider the matter of credit default swaps and standard derivatives as a whole.