As the turmoil worsens in the financial markets the European Union is proving utterly incapable of handling the
crisis. Far from rescuing the economies of its member states the EU itself is starting to buckle under pressure.
The great American free-market economist Milton Friedman long maintained that the EU’s monetary union would not survive a serious recession – or “the first bump in the road”, as he put it. His prediction is looking all too accurate as the European banking system teeters on the edge of meltdown.
The looming catastrophe exposes the folly and deceit of all the enthusiasts for the EU who argued that the sacrifice of national sovereignty was a small price to pay in return for dynamic growth. Now the EU member states who signed up to the euro are experiencing the worst of all worlds.
Not only have they lost their national independence but they are also experiencing the start of the worst slump since the Second World War. The currency they adopted is chronically weak, the union they joined is imploding. The EU’s aggressive destruction of the nation state has been in vain.
Precisely because it takes no account of differences in national economies, the institution of European monetary union has proved hopelessly ill-equipped for the present crisis.
They decided to have the currency first and then build the nation. Unfortunately, that doesn't work. You've got to have a nation first and then you can build a currency. They thought that political will could overcome the economics of the matter.
But the truth is that while you can ignore economics, economics ain't gonna ignore you.