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Sunday, December 4, 2011

Here Comes the "European Fiscal Union"

Merkel and Sarkozy are apparently going to Brussels "with the goal of achieving treaty change," aiming for no less than transforming the EU into a "fiscal union". This implies a considerably greater degree of "sharing and pooling" when it comes to the sovereignties of the EU-member states. Member states will be asked to transfer more of their formal economic sovereignty to the Brussels centre than before. (Notice that, while the problem they are working on is the Euro-crisis, they are not reforming just the Eurozone but the EU as a whole. The EU-member non-Eurozone economies are already so highly dependent on the Euro that nobody bats an eyelid about this.) The measure is to be backed up by an additional €1 trillion "cash injection" (i.e., subsidy) from the European Central Bank (i.e., the taxpayer).

Given the economic realities of the EU, it is almost certain that this centralization of the Europan "sharing and pooling" of fiscal policy will result in Germany's (and by implication perhaps also France's) greater dominance over the economic policies of the European Union. In other words, "Rhenish," continental big capital is throwing in its weight in the Euro-crisis. Rhenish capital is using its trusted political lapdogs, the German and French states to do this. Viewed from the perspective of smaller-scale, less global capital anchored in the poorer EU-member states, this is but a formal inauguration of an already existing hierarchical relationship. (Notice: I'm not even talking about labour, social reproduction or "the concerns of the European citizen" here, this is just a thought about some geopolitical-economic features of the capital-capital relationship within Europe.)

Clearly, at the heart of the Euro-crisis has been what I have called the elasticity of weight--the EU's innovative game of playing two parallel strategies on the world stage (one: acting as a single power where that strategy maximizes result; the other: acting as a loosely coordinated mass of 27 quasi-independent, "Westphalian" states where that game promises better results). Unable / unwilling to abandon elasticity of weight, the EU is, with enormous agony, shifting a tiny bit of its weight in the single-power direction. But the game still remains the same.

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cover page of the book

cover page of the book
image used for the cover design by Anannya Dasgupta