Jacques Delors, the man seen as the architect of the European single currency, publicly declared that "the euro project was flawed from the start and the current generation of European leaders has failed to address its fundamental problems".
Here comes the 65 billion Pound question: If they knew that it was flawed, why did they implement it?
Most of the problems we face today could have been avoided. Given the economic imbalances, the consequences were predictable. A plausible answer would be that European leaders disregarded economic realities and promoted the idea merely for political purposes.
The idea was to push forward the political agenda and hope that economic imbalances would be rectified in the long term. They didn't have in mind what was going to happen to the America economy that acted as the trigger that exposed the said imbalances that we paying for today.
The impulse for further political integration is nothing less than the will of the lenders to ensure that they get their monies back and the main lender and backer is none other than Germany, itself deeply affected by the American financial fiasco.
Before we even start talking about how much money Germany is having to divert from its own economy, we should look at how much money German investors lost in the so called American Sub Prime Market Scandal.
Economic power and political power go hand in hand and this is the main issue on the table. In order to reassure German taxpayers, Chancellor Angela Merkel talks about further political integration that will mean changing the present European Union Treaty to ensure that national budgets are vetted and controlled "in order to avoid excesses". With Greece and Italy "under administration", other countries would follow suit.
The powers of national governments would be strictly limited and national elections would become a mere formality to pretend that we still have democratic countries.
This kind of arrangement is not news. In fact, the International Monetary Fund and the World Bank have been doing it for ages. Additional funding required by Latin American countries, for example, was very much conditioned and the IMF and the WB usually told countries asking for money how much they could invest in health, education, transport and defence, among other things.
Voters voted to elect representatives that became decorative figures while the IMF and the WB dictated real economic policies. Much of the political instability suffered by many Latin American countries was due to such kind of 'conditional arrangements'.
The fundamental point is that unelected bureaucrats and technocrats were making changes without taking into account social and political realities. ‘Conditional arrangements’ led to successive devaluations and in turn to further need of ‘conditional arrangements’. The more debts the said countries accumulated the greater the need for new loans. The more loans they acquired the more ‘controllable’ they became. Loans became a political tool to ensure political allegiance to the designs of the lenders that acted on behalf of the State Department of the United States of America.
Once again, the same strategy is being used to control European countries. Loans with conditions attached are in effect tools of foreign policy. This is what George Osborne refers to as ‘political isolation in Europe’. If two powerful countries control the money supply with conditions attached, they de facto control political power at national level within the European Union and are therefore able to isolate anybody who disagrees with them.