King Abdullah bin Abdul-Aziz Al Saud first gets tautological and then philosophical about women's right to drive (Oct 2005).
Barbara Walters: "Would you support allowing women to drive?"
His Excellency King Abdullah: "I believe strongly in the rights of women. My mother is a woman. My sister is a woman. My daughter is a woman. My wife is a woman. I believe the day will come when women will drive. In fact if you look at the areas of Saudi Arabia, the desert, and in the rural areas, you will find that women do drive. The issue will require patience. In time I believe that it will be possible. I believe that patience is a virtue."
Yours, thinking about the European experiment analyst,
AA
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| Fig. 1: Night Map of the European Peninsula |
The last time when Europe was at crossroads it was the late 19th century.
At that time Europe was grappling with unstable power balances in
South-Central Europe and the Balkan Peninsula brought about by the simultaneous
decline of the Sick Man
of Europe and the overflow of creative energies, ethno-linguistic
political aspirations and military capabilities of the German speaking peoples
under the leadership
of Prussia.
It took Europe three wars (the Balkan War and
the two world wars) before it could finally decide which turn it must
take.
In my view Europe is at crossroads again. Much has changed since
the 19th century. However just as it was back then, Germany
continues to remain too small to allow for the complete expression of capital
and creative surpluses of the German speaking peoples. The European debt
crisis is right in the fore. But lurking behind the façade of a
debt crisis are the same 150 year old risks to the natural and complete
expression of the surpluses of the German speaking
peoples – potential loss of cost effective and free access to raw
materials, and to markets in Europe. I will skirt the Q of war as a means
of dispute resolution mechanism and instead focus on financial and
geoeconomic solutions to the debt crisis. The good thing about the crisis
is that it is solvable. By solvable I mean it is within Europe's ability
to solve the problem on its own. There are five principal, non-mutually
exclusive solutions to the problem, some European, some that rely on external
help:
1. ECB
Bond Purchase: ECB significantly expands the purchase of bonds of
troubled sovereigns and systematically important European FIs.
In this five-part note we look at each of these options, understand
their implications, and examine the difficulties in their being exercised.
Here is the first part.
Option 1: ECB Bond Purchase (aka, ECB provides
liquidity)
a.
Who does it cheer in the short run?
b. Who
does it offend? Ireland,
the Nordic countries and Germany
c. Who are neutral? China,
Russia, India
d. Likelihood of exercise in a meaningful
quantum: nearly 0
e. Why is the exercise
of ‘Option 1’ unlikely? – Because Germany wouldn't have it that way. The
reason for that lies in why Germany started the EU project in the first place.
Germany brought the EU project to the
forefront, again, after the Berlin Wall was brought down [1].
To the Germans, this made perfect sense. If Germany were to succeed (i)
trade barriers would fall allowing her cost efficient and secure access to
raw materials [2];
(ii) barrier-free access to a large market would make Germany’s continual
investment in high technology affordable, allowing her to continue to maintain
its high-tech edge; (iii) Germany would deploy its surplus capital in
productive endeavors in nation states in the geographic and
cultural vicinity as opposed to, say, in China, India or South America; (iv)
nationalism in Europe would wane with the rise of the notion of a common
economic destiny (in the late 19th and early 20th centuries raucous
expressions of the idea of nationalism caused internecine wars that
culminated into the demise of European colonialism); (v) with the wane of
nationalism, Germany could take a serious stab at reconstructing the European
states from their current religio-linguistic basis into a law-based society – a
change as transformational as the metamorphosis of a caterpillar into a
butterfly.
f. What happens if ECB
significantly expands its bond purchase program?
Ø moral hazard – the ones with irresponsible
credit behavior are left off hook and those that behaved responsibly
are left to pick the tab
Ø Having barrier-free access to a large market benefits Germany only if
such a market becomes self-sustaining. No one wants to have access to a
large market which one must also fund in perpetuity.
Ø The fire of German nationalism will reduce the goal of German elites’ to
transform Europe into a law-based society to cinders.
Ø It will beget nationalistic feelings elsewhere in Europe, leading to
resurrection of unions inspired by nationalism causing a reversal of
intra-European free trade.
[1] The European dream is the manifestation of release of latent energies of the Germanic peoples following the collapse of the Holy Roman Empire in the early 19th century.
[2] secure from the vagaries of nationalistic jostling of the various European national states
