THE LATEST CRACK IN THE EU EDIFICE: DUTCH PRIME MINISTER RUTTEMarch 20, 2018
As regular readers here know, I have a high regard for the research and reporting of Mr. F. William Engdahl, whose book, Seeds of Destruction, helped expose the "wonderful" worldview of I.G. Farbensanto. In that book, Mr. Engdahl exposed the doctrine of "substantial equivalence" that allowed Farbensanto to skirt long-term scientific requirements of testing of their products because they were "substantially equivalent" to natural crops, while at the same time allowing it to patent the very same products. It was a case of having one's glyphosate cake, and making everyone else eat it. (More recently, Mr. Engdahl has completed a new book, Manifest Destiny: Democracy as Cognitive Dissonance.) But he has also weighed in on international and European politics from time to time, and Mr. K.L. spotted this article and passed it along:
When I had read this article, I experienced a bit of deja vu, for I was reminded of Napoleon Bonaparte's "come back" when he escaped his exile on the island of Elbe, landed in southern France, and marched on Paris, with the troops of the French army deserting their allegiance to the restored Bourbon monarchy, and going over to Napoleon who had ensconced himself once again in the Fontainbleau palace, only to discover that the Allied Coalition of Britain, Prussia, Austria, and Russia - in a diplomatic first - had declared war, not against France, but against him personally. We'll get back to that bit of deja vu momentarily. I had another bit of deja vu as well, for I was reminded of the War of the League of Cambrai, when the rest of Europe had had enough, and decided to go to war with the Republic of Venice, and put an end to its international financial manipulations.
As Mr. Engdahl points out in the article, recent election results in Europe, from the Netherlands to Austria, Hungary, Germany, and most recently and spectacularly, Italy, have begun to exhibit the profound fissures and cracks in the European Union edifice that were always there, for whether or not Geert Wilders' efforts in the Netherlands or Frauke Petry's efforts in Germany did not put them in their respective executive mansions, the results were earth-shaking enough to pull the mainstream parties to the right. Already German's Interior Minister is calling for an end to the Merkel-Brussels-Paris-Berlin open borders policy. In Italy, moves are being made for a back-up plan to leave the EU and the euro and to restore a national currency in case negotiations with Brussels fail. These plans include actual amendment to the Italian constitution allowing popular referenda on treaties.
But Mr. Engdahl highlights other cracks and fissures emerging:
During a visit to Berlin March 3, Dutch Prime Minister Mark Rutte bluntly came out against the recent trend led by Germany, France and other EU states to create a top-down central supranational state along the lines of a United States of Europe. He told press, “There has been this narrative that there is this inevitability of closer cooperation in a European federal state.” He became blunt: “This horrible language about ‘ever closer Union’ I don’t like. In the past 20 or 30 years this has moved from ever closer union of the peoples of the EU working together on collective issues, where member states weren’t able to deal with it themselves, to become an inevitable goal in itself.” Then Rutte declared the unspeakable “S” word: “We can never forget that these are sovereign nations. This is not a movement in itself, just when needed in special occasions. It has moved from a collective effort of nations to a goal in itself. It’s totally wrong!”
North-south divide opens
Now in addition to the growing East-West divide within the EU between Poland, Hungary and others versus Berlin and Paris, there is a clear North-South divide opening. Rutte’s throwing down the gauntlet in Berlin was followed three days later by a meeting of eight northern EU finance ministers including Netherland on 6 March where they issued a common statement that was directed against the French-German Macron Plan that seeks to create more centralized Brussels control beginning with a single EU finance minister. The finance ministers of Holland, Denmark, Estonia, Finland, Latvia, Lithuania and Sweden issued their declaration from Den Haag where the meeting took place.
Macron, with apparent backing of the new German coalition, joined with EU Commission President Jean-Claude Juncker to call for a common Eurozone budget and a European finance minister as the first step to a central fiscal union that would be even more controlled top down from Brussels. Macron proposes in effect an ultimate EU fiscal union, with Europe-wide taxes and spending, even more top down than at present as sovereign nations would largely lose the taxation sovereignty. Macron’s plan is a thinly-disguised attempt to create an EU fiscal union in which German taxpayers as well as Dutch and other conservative EU members will in essence bail out Southern European countries, including Greece and Italy where French banks hold the largest exposure. Macron unveiled his plan in September 2017 just as German elections were taking place. He promoted it as a way to a “sovereign (sic), united and democratic Europe,” something it definitely is not. (Emphasis added)
What's at stake is making Germany and the relatively prosperous economies of the northern European Germanic states liable for the weaker economies of southern Europe, which would happen in the EU as Merkel and Macron want to fashion it: a top-down bureaucratic state with no wiggle room for sovereign nations or, for that matter, any real popular representation:
The surprise decision of Chancellor Angela Merkel late last year to “kick upstairs” long-standing and respected fiscal conservative CDU Finance Minister Wolfgang Schauble, the way was cleared to name a new German finance minister more open to the Macron ideas, something Schauble bitterly opposed. With Schauble gone, the resistance is greatly weakened to creation of a de facto Eurozone “transfer union” in which northern EU states, including above all Germany, accept large fiscal or tax transfers to the heavily indebted Eurozone states of the south. The ultimate winners in such a scheme would be French banks.
And how is this to be accomplished? Why, through the bundling of securities, that's how, rather like all those credit-default swaps and derivatives bundling that led to the 2008 meltdown, and which left quadrillions of dollars of derivatives on the books (the biggest exposure to which held by any one bank is, incidentally, Deutschebank):
According to a report in the online US news site Politico, EU Commission Vice President, Valdis Dombrovskis, revealed plans to propose creation of so-called “European Safe Bonds“ (ESB) or “Sovereign Bonds Backed Securtities“ (SBBS) at the May EU summit. The state bond debt of different EU states would be “bundled” into new securities and sold. As the US rating agency Standard and Poors noted, “European safe bonds (ESBies) have been proposed as a tool to increase the supply of ‘AAA’ rated euro-denominated assets and reduce systemic risks from banks’ large holdings of bonds issued by their respective sovereign governments.” The reality they point out is likely to be the opposite. German AAA bonds will have to be “bundled” with higher risk bonds from countries such as Italy or Greece in an effort to sell the risky Greek debt.
Enter Dutch Prime Minister Mark Rutte, who is issuing a peculiar warning:
As the 2007-2008 US asset-backed securities crisis revealed, these schemes to bundle risky debt with safer debt such as Germany backfire badly once a real systemic crisis erupts. As Dutch Prime Minister Rutte warned, beware of US hedge fund operators bearing large gifts and beware of sly attempts to further erode EU national fiscal and other sovereignty to stabilize de facto bankrupt Eurozone French and other banks. (Emphasis added)
And there it is: Prime Minister Rutte has exposed the fact that the Emperor Charlemagne's new clothes really aren't any clothes at all, and the weakness of French (and German banks, read Deutschebank) is the real factor driving this move toward "integration", making northern Europe liable for the socialist sins of the southern part. Mr. Rutte has, in effect, said that the EU is unmasked, and stands naked for all to see what it really is: it's a scheme to bail out the finance capitalists. Rutte is saying, in his own way, what dismissed German Finance Minister Wolfgang Schauble said some years ago: the debt finance model is over. There is no way forward that is not a massive reform. And in case there's any doubt who the unnamed "hedge fund managers" might be, Mr. Engdahl spells it out:
The push for a Brussels-run EU, ultimately with the central power to issue “Eurobonds” for the entire Eurozone, has been a top issue for billionaire US hedge fund speculator, George Soros. Were this to happen, it would turn the EU into a huge financial target for currency speculators and make Germany and other fiscally prudent states the paymaster for weaker states such as Greece or Italy or Spain in the next financial crisis, and make no mistake there will come a next, as nothing fundamental has been done by EU governments since the 2008 crisis to fundamentally reduce systemic risk. The zero interest rate policy of the ECB has kept the debt bubble inflated across the Eurozone. Since the ECB introduced its unprecedented program of buying Eurozone state debt in 2015, the ECB has bought an eye-popping €2.3 trillion of euro securities to end of 2017. All agree this is unsustainable. The question is what to do.
What, indeed, to do, for nothing else highlights the difference between "finance capitalism" (or as I like to call it, "crony crapitalism") and "equity capitalism" like Soros, who produces absolutely nothing, except chaos and discord wherever he decides to meddle. And Italians (and Hungarians, and Austrians, and Germans, and Poles) know all too well Soros' role in aiding "immigrants" come to Europe.
What, indeed, to do? Perhaps, just perhaps, it's time to start thinking in terms of the example of M. Bonaparte, his "return", and how the rest of Europe dealt with it. Perhaps it is time for another War of the League of Cambrai. Russia and Hungary have already declared that individual and his various entities persona non grata; Britain certainly has cause to do so, and Mr. Rutte appears to be willing to say that the Emperor has no clothes at all.
See you on the flip side...