Four horsemen of Apocalypse
Two-speed Europe? Then why did we ever undertake this giant unification project?
Prof. Mihail Konstantinov
17 March, 2017
At a recent key summit in Versailles the leaders of Germany, France, Italy and Spain argued in favour of what was hitherto considered a taboo, two-speed Europe. This move has several implications. First, the old adage that everything that does not defy the laws of physics is possible is proven right. Besides, physics is a dynamic science and what might be inconceivable today could become possible tomorrow and is bound to happen at some point. Second, it appears that officially adopted principles for solidarity, unity, mutual assistance, European values and the likes could easily be derogated by the intentions and decisions of several party and state leaders. This is reminiscent of the unforgettable practices of communist countries and unions, like the socialist Council for Mutual Economic Assistance established by the USSR as a counterbalance to its western versions.
Third, the summit in Versailles betrays the now perpetual state of panic of western European elites brought on by the changing of the guard in the US, the UK’s decision to exit the bloc and the dreaded results of upcoming general elections in the Netherlands, France and Germany. Panic is what makes these elites resort to crisis-mode PR in the frail hope that things will get better. They surely will, but not the way the leaders imagine.
These are some of the visible, purely political but far from only or even most important aspects of the situation. Unfortunately, and as always, it all comes down to money, more specifically resources, economy and survival. On that level, things are uncontrollable and getting worse. World leaders love the mantra about economic growth. Thankfully, real growth in Europe and North America is actually negative. Granted there is positive growth in China, India and elsewhere in Asia. I will elaborate on that “thankfully” in a bit. World leaders, however, would have you believe that there is economic growth, just not enough. In truth, Europe and the US are not growing economically, just accumulating debt.
It is simple: let us take a family that had income of BGN 50,000 in 2015 and owed the bank the same sum as of 31 December that year because of mortgage and leasing payments (this is the actual model of middle class families with 1-2 children in Bulgaria). In our scenario, as a result of 5% economic growth, that family’s income increased to BGN 52,000 in 2016. The family also changed its wide-screen TV (CIA’s 24/7 window into their lives) and their children’s two smartphones (also surveillance instruments that the CIA, the Russian FSS and anyone who cares enough can use), which led to BGN 5,000 more in debt. Therefore, after payments on the old debt, as of 31 December 2016 the family owes the bank the same amount and has the same assets.
Their net worth stayed the same, at best. And thank God, because if economic growth was real and not offset by debt, the planet’s resources would have disappeared tomorrow, not in 10 years, as is the current pace. And resources will be depleted, the laws of physics show.
Given the zero economic growth, debts across the economy cannot be repaid. And they are more than huge, they are impossible to settle. Neither this generation, nor the next ones (if there are such) will achieve this. As things stand, debt is bound to only mount, but for how long? Physics laws teach us that in a closed system nothing can increase indefinitely.
The answer to this question should be rewarded with a Nobel Prize for economics. The debt of Europe’s sick man, Greece, approaches 200% of its GDP and no one is capable of curbing it because the Greeks are incurring debt with a higher pace than their long-suffering creditors can cancel it.
The big Versailles Four is, of course, led by German Chancellor Angela Merkel, who is pushing the record for political longevity in her country. As we know, Germany’s debt is high but the country has a functioning economy composed of more than just a service sector but a car-making industry, etc. So, you should not fret over Germany’s debt ratio even if it reached 100%.
Another prominent member of the Four is French President Francoise Hollande, who has the lowest approval rating in his country’s history. And he looks set to hold that dubious honour for eternity. France is a proud and strong democracy, a nuclear power and one of the permanent members of the United Nations Security Council with the right to veto the international organisation’s decisions. Although it must be noted that this proud and strong democracy is in a permanent, and we might add ineffective, state of emergency because of its inability to cope with the terrorist threat coming from its own citizens of migrant descent. France’s debt is lower than that of Greece but it is also equally impossible to repay. Besides, it is still growing and at an increasing pace at that.
The third member of the Four arguing in favour of two-speed Europe (separating the frontrunners from the laggards) is Italy’s premier Paolo Gentiloni, the former foreign minister who took office on 12 December 2016. Eight Italian PMs have been implicated in corruption by a special team of prosecutors since 1992. Not bad, this makes for one corrupted premier in every three years on average for that period. The problem, however, is with Italy’s banks. Stress tests conducted in the sector caused the inspectors themselves a great deal of stress. As if the fact that Italy also has an unmanageable mountain of debt was not enough, the holes in the banking system proved to be just as colossal and impossible to plug. The denouement there is getting closer and it will be spectacular.
The fourth Versailles member is Spanish premier Mariano Rajoy, who has been in office for 6 years. In that period, the country took on more debt, its banks are in a similar predicament as the Italian and its unemployment is monstrous, youth unemployment rate especially is through the roof.
The four leaders seem like the Four Horsemen of the Apocalypse described in the Book of Revelation of Jesus Christ to John of Patmos. How easily they slashed the bond and divided European nations in two groups. One may even say that countries like Bulgaria and Greece are moving at a third speed. No car, even the most sophisticated Mercedes, can run on two speeds at once. Of course, we can chop the car into two and even three parts. It would be the latest spectacle in a turbulent global situation with the US determined to become “great again” but also step away from some of its missions and the Russian empire doing what it does best again and that is to fight. Otto von Bismarck once remarked on this Russian trait, saying that the country knows several ways to get the Russian bear out of its lair but not a single good one to put it back in. And finally, China is yet to take the place of a global leader that it has been preparing for in the past 5,000 years but it probably needs just five more, to finish its army. Maybe even less, depending on how much time history gives it.
And so, we are facing two-speed Europe, with Germany at the lead and the rest struggling to keep pace, or even the same direction. Why did we even start that whole deal with the European Union then?