The Game Is Up

Ambrose Evans-Pritchard in the Telegraph writes that the German 'yes' vote yesterday, itself a foregone conclusion and irrelevant to solving the immediate Euro crisis, has actually a greater significance. Like the German Constitutional Court a couple of weeks ago, it's a 'yes' to this bailout but a 'no' to any further integration:

The furious debate over the erosion of German fiscal sovereignty and democracy – as well as the escalating costs of the EU rescue machinery – has made it absolutely clear that the Bundestag will not prop up the ruins of monetary union for much longer.

The Germans, the paymasters, have reached their limit of EU integration and this is profoundly significant.

As Bundestag president Norbert Lammert said yesterday, lawmakers had a nasty feeling that they had been "bounced" into backing far-reaching demands. This can never be allowed to happen again. He warned too that Germany's legislature would not give up its fiscal sovereignty to any EU body.

In a sense, the Bundestag vote was much like the ruling by the Constitutional Court earlier this month...what mattered was the Court’s implicit warning that Germany had reached the outer boundaries of EU integration, that German democracy is under threat, and its explicit warning that the Bundestag’s fiscal powers could not be alienated to Brussels.

Germans have begun to sense that the preservation of their own democracy and rule of law is in conflict with demands from Europe.

All of which means that Jean Monnet's dream of a Europe with no nation states and no democracy is all over. When confronted head on with the choice of full integration with the EU or sovereignty and democracy, the people will inevitability choose the latter - nation states, territory, a sense of belonging are essential to human nature.

Monnet himself knew this, which is why he adopted a process known as 'engrenage' or 'gearing' to facilitate political integration. By moving towards 'ever closer union' using what are essentially salami tactics Monnet hoped to achieve his goal without people noticing, until the very last minute. Then he hoped that we would all wake up under a fully-fledged union and say; 'hey I like this new world order'. Deluded yes but his political project came very close to being realised.

And this is why the Euro crisis has been so significant; it has torpedoed completely the engrenage method.

Like everything else in the EU, the Euro was a trojan horse for 'more Europe' - a political project despite Peter Oborne's assertions to the contrary. In a currency union you need to start with politics and end with economics. A currency union needs; one government, one chancellor, one budget, one economic policy and fiscal transfers from richer parts of the union to subsidise other less rich parts. A classic example of a largely successful economic union is the UK for these very reasons.

The EU however put the cart before the horse - it had one currency but 17 different budgets, economic policies and governments - and deliberately so. Knowing they wouldn't get away political union first - because the pesky voters might get in the way, they hoped that the Euro's flaws would facilitate it via the back door. They hoped that the Euro faced regular little 'problems' due to its inherent faults which then could be met with 'more Europe is the solution'. And step by step it would reach its ultimate goal.

Unfortunately (for them) the current problems are so big that the engrenage method is woefully inadequate, instead countries are being asked to make one giant leap to full integration (the only workable solution) missing out all the little steps in-between. And one of the most important countries in the EU has just said nein in response.

It's all over - "the train that is fortunately moving too fast for anyone to stop it" has been stopped. The fallout, the legacy, the problems will all remain with us for a long time yet, but the irresistible force of the EU has reached an immovable object, now it must begin its slow decline.

With deep irony the Germans have saved the rest of Europe from tyranny.