Small independent nations could be the salvation of EU’s crisis, writes NOEL G DESOUZA
The 2012 Australian Budget would appear like a fantasy to the people of several European countries which face stringent austerity measures. Wayne Swan, the Australian Treasurer, spread out gains to low and middle-income earners, whilst avoiding handouts to the rich. This is the exact opposite of the European situation where the low-income strata face unemployment and the middle-income earners face social welfare cuts.
Two pillars upon which European integration is based are currently causing problems. The first is the free movement of people from one country to another; this has implications for jobs and social welfare benefits. Portuguese building construction workers, for example, are displacing British union workers in Britain. The next is the free movement of goods; there have been protests at the import of fish from outside France to the detriment of French fishermen.
It is now becoming increasingly clear that the Euro currency is a failure and, even more so, that the European Union in its present form is becoming unacceptable for many within the union itself and it may not last for long in its current form. The Euro should have been phased out a few years ago and the union needed to have been loosened.
The patchwork of states which form the European Union are all different, both culturally and economically, and uniting them is inadvisable, if not foolhardy. Fusing such different states into a single union was always a pipe dream. The idea initially was to prevent the numerous wars that had plagued this small continent. Wars are avoidable by means other than by fusing all these countries into a marriage which is now proving to be inconvenient. Sarkozy was so immersed in saving the Greek economy and the Euro that the French people ultimately wanted to know what he had done for France’s own interests.
British Prime Minister Cameron has his own version of austerities like cutting grants for university education. The recent municipal elections in Britain have seen the Tories wiped out in several councils which they had dominated for a long time. Wayne Swan’s Australian budget actually increases the education budget, specially supporting parents with school-going children substantially.
A galaxy of European leaders were committed to unifying Europe and expanding into the former Communist states. Sarkozy did so to his detriment. Ken Livingstone who failed in his bid to oust Boris Johnson as the Mayor of London has counselled the Labour Leader Ed Milliband to jettison the discredited policies of one such europhile Tony Blair, as those are the policies which are holding Labour back.
Several governments in Europe have faced political demise. Governments have changed hands in Ireland, Portugal and Spain but rather than solve problems, their austerity “solutions” have deepened the economic crisis. The Dutch government, finding that the demands for austerities would only cause much pain for their people, has resigned en masse; its ministers are unwilling to do thankless work and then get bulldozed out of existence.
The culmination of the European crisis appeared in France with the defeat of Nicolas Sarkozy. The new President Francois Hollande is proposing measures opposite to those for which Sarkozy worked for so hard and so fruitlessly. Sarkozy worked for saving Europe and the Euro through austerities whilst Holland is working for saving France through growth. The nation states are triumphing over a failed union.
Indian states are increasingly behaving like nation states. Just like the Eurozone countries have looked to the European Central Bank to bail them out of their troubles, the Indian states are putting pressure on the central government to obtain grants for a variety of projects. The Chief Minister of West Bengal, Mamata Banerjee is reported to be asking the Centre for more funds in exchange for supporting the Centre’s nominee for the Presidential election!
The parallel of regionalism in Australia is the constant clamour from individual Australian states for a share of the tax pie. The mineral-rich states are attempting to keep taxes from mineral production exclusively for themselves.
India needs to ensure that any measures which it takes do not erase the gains which have been painstakingly built up in the last three to four decades. India is in a strong position to manufacture the needs of Europe, but Europe has to be in a position to buy what India manufactures. Currently this is not the case. The French President Hollande’s push for growth might help in the long term.
Australia is lucky for being situated in a region which is flourishing in comparison to Europe. Its mineral wealth is what Asia needs. Indeed, when Donald Horne wrote his famous work The Lucky Country, he had said that Australia is only managing to look after itself because of its mineral wealth, and hence he called it the lucky country.