Brexit: Made in UK, designed in Brussels

If the British vote for Brexit, the European Union will be reaping what it has sown.

In 1992, Denmark voted against the Maastricht Treaty, which established the possibility of creating a common European currency. In France’s referendum on the same issue, only 51.1 percent voted in favour.

What if Europe’s leaders had listened to the doubts of their citizens and ditched the Maastricht Treaty?

The euro enabled countries to borrow more cheaply than they ever could have done without access to the ECB’s cheap financing. But this wasn’t a good thing.

It allowed Belgium, Greece and Italy to postpone necessary public sector reforms. As a result, the public sector and the public debt burden were allowed to grow even bigger.

It led to property bubbles and massive private debt in Ireland and Spain, which forced both countries to beg for a bailout. It led to transfers between countries, through the bailout funds and the ECB, and between taxpayers and banks. For example in Greece, the banks were able to dump a large part of their exposure on to eurozone taxpayers.
The common currency threatens the EU

The conditions linked to those transfers, in the form of a Troika or a Memorandum of Understanding, evoked a lot of anger in those countries forced to comply with the conditions.

Savers, insurance companies and pensioners in Germany, the Benelux and elsewhere have expressed their anger at the ECB using loose monetary policies, for example low and negative interest rates, to keep the euro project alive.

Italy’s GDP per capita is smaller than before it joined the euro. The “banking union”, common Eurozone regulation and supervision for banks, has the UK government worried about eurozone protectionism, fearing non-eurozone banks may one day no longer enjoy access to the single market without having to comply with eurozone rules.

In many countries, anger about the economic misery brought about by the euro debt machine translates into a vote for parties keen to leave the EU. In short, the common currency has ended up threatening the EU.
Anti-EU sentiment

Was the euro needed for countries to trade? No, it wasn’t. The UK, Poland and Sweden are happily trading without being a member. Was it needed to force a crisis which could then be abused to centralise power and organise transfers? Yes it was.

There were the referendums on the Nice Treaty, rejected by the Irish in 2001, the “European Constitution”, rejected by the French and the Dutch in 2005, and the Lisbon Treaty, rejected again by the Irish in 2008.

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