Deflation and defence, the two new priorities for Europe

The best students of the European Union, in terms of public finances, are those who invest the least in common security. It is urgently necessary to eliminate the defence investments of the Maastricht criteria.

Will the European Union and the euro survive the negligence of their present institutions? It is certainly possible to doubt them, in light of the most recent decisions of the European Commission, and of the ECB that chose to do nothing last week even after the Eurostat confirmed a major risk of deflation in the Eurozone.

In Brussels, the attitude of Manuel Barroso’s former Commission is also completely inexplicable. Repeating his budgetary and fiscal doxa, it appeared to ignore the reality of imminent war in a country that is half European, Ukraine, as well as the reality of 26 million unemployed within the Union.

It is time that the Commission change its catechism. Like Germany’, who in January 2003 was subject to a procedure for excessive deficits at the time of its reforms, the European Union has more urgent matters to deal with than absolute and immediate respect for the Maastricht criteria. These matters are peace and prosperity on the European continent. Both are strongly threatened, at one time or another, by the scheduled invasion of Ukraine by 50,000 Russian troops amassed at its frontiers and in another register, by the inability of European institutions, ECB at the head, to provide a means to fight against the deflationist spiral currently at work.

« Si vis pacem, para bellum ». If you want peace, prepare for war. Who are the “best students” of the European Union today? Those who continue to invest a significant part of their GDP in defence, in a dangerous world where war draws closer to the European continent? They are (source CIA World Fact Book): Great Britain (2.5 % of its GDP), France (2.3 %), Poland (1.9 %), Italy (1.7 %). That means the “worst students” of the Barroso Commission in a strictly legal and accounting sense, in order of expected 2014 GDP deficits, are the following: Great Britain (5.4%), France (4.2%), Poland (3.5%), and Italy (3.3%).

Inversely, the “best students” of the Barroso Commission are those who contribute the least to the individual and collective defence effort of our territories and strategic interests: from Austria to Sweden to Denmark, Belgium, the Netherlands, Germany and Luxembourg. All of these accounting rich countries fall far below the average for European nations in terms of defence spending relative to GDP. As it is the average is 1.65%, already below the minimum level of defence spending recommended by NATO (2% of GDP).

From this report, we will take a one lesson and a one recommendation. The lesson: in light of this, we understand by this measure why big nations like Poland and Great Britain, justifiably about protecting their sovereignty, do not feel pressured to rejoin the European Mmonetary Union, in which the actual current rules and practices impoverish thehinder the economies and disarm the countries who join it. We understand also, alas, why the followers supporters of the implosion breakup of the eEuro are, todaynow, reinforced in their dangerous conviction by the similarly equally dangerous policies of the European Commission and of the BCEECB.

The recommendation is the following: first, continue to require, but in a realistic trajectory and calendar, the structural and necessary adjustment of nations living operating chronically below their means. At the forefront of these is France, which has twice as many law enforcement officerscivil servants per capita as Germany, and in which the actual current government has inherited for four decades the of budgetary laxismfiscal laxity on of law both of the right and of the left. With this commitment made – and the general political discourse speech of Manuel Valls pronounced delivered yesterday attestingas shown, it is urgently necessary to eliminate the defence investments investments of the Maastricht criteria. And, to incite encourage the “worst students” of European defence, first and foremost among them Germany, to reinvest in this strategic field.

The only defence investments common to all of the European countries would be eligible upon the elimination of the Maastrict criteria. At the recent annual conference of the European Agency of Defence numerous paths in this domain were discussed: construction of a European drone; reactivation of the hastily-scrapped project of anti missile shields project; deployment of observation satellites; construction of European nuclear aircraft carriers; tools of cyberwarfare; tanker aircrafts; and of course tanks, in which we could , alas, soon rediscover the efficiency of the Ukrainian side…

We need to eEliminate defence of the Maastrict criteria to rearm ourselves in a dangerous world, and leave the Maastricht deflationist spiral. We need to pPush the governors of the BCE ECB to act against deflation instead of nodding off between two recitations of financial orthodoxy. We need to mMaintain pressure on Germany to assume its responsibilities to in defence in in Europe, and on on France and the U.S., the states that waste the most wasteful of public money and of on the confidence of their European partners’ confidence. Here are the trails paths worth being exploredexploring and put to work asas soon as possible. Who brings leads these today to in London, Brussels, Paris, Berlin, and Rome, in the European campaign? No one. If nothing moves, who will be surprised by a massive vote against European institutions and their incompetent elites during the next European Parliamentary elections? Who will be astonished, then, in the more or less the long term more or less, by the rupture of the eEuro and the return of the past Europe past, that of wars? Not me.

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http://www.lesechos.fr/09/04/2014/LesEchos/21665-043-ECH_deflation-et-defense–les-deux-nouvelles-priorites-de-l-europe.htm#zZCuTVkovhjJp5mh.99