Rembrandt Europa[Image: Rembrandt’s ‘The Abduction of Europa’]

This article is a sequel to an earlier piece entitled ‘Why is Europe not coming together in response to the Euro Crisis?’ and is best read in conjunction with this article (co-authored with James K. Galbraith) that compares our Modest Proposal for Resolving the Euro Crisis with alternative proposals for defeating the Euro Crisis. In what follows below , I argue that, as things stand, ‘political union’, ‘more Europe’, calls for a ‘Eurozone economic government’, or for a ‘Euro Chamber’ within the European Parliament, are not preludes to a democratic federal Europe. Instead, they are steps towards a postmodern European feudalism that is, in fact, the very antithesis of a democratic federation. The article concludes with an analysis of why our Modest Proposal offers Europe a rare chance to prevent the creation of a European iron cage in which what is left of our democracies must suffocate. Unlike all moves that are currently heralded as ‘baby-steps’ towards federalism, the Modest Proposal’s emphasis on ‘Europeanised Decentralisation’ is perhaps Europe’s best shot at a future consistent with the basic principles of a constitutional democracy.



In a previous article I argued that Federation was never truly the ‘logical’ conclusion of the Eurozone’s formation. There were, of course, many, including President Mitterrand and Chancellor Kohl, who had surreptitiously hoped that the euro’s inevitable crisis, at some point, would force our politicians to concede to the creation of a federal constitution and a federal government to be elected on the one-person-one-vote principle. Alas, they were badly mistaken: a democratic United States of Europe was, and remains, inimical to the European Union’s DNA.

The reason why the Eurozone is experiencing its never-ending existentialist crisis was, at first, the lack of an Extra-market Surplus Recycling Mechanism (see here) and, more importantly perhaps, its political commitment to not creating such a mechanism once the crisis had erupted. And the reason why extra-market (that is, political) surplus recycling has never been on the cards, before or after the crisis, was that the EU’s institutional design was created to preclude, rather than to pave the ground toward it.

Why preclude a political, extra-market, for recycling surpluses which was, as the United States realised in the 1940s, essential to maintaining an asymmetric monetary union between high and low capital intensity economies? Because European elites assumed that the United States would be playing this stabilising role on behalf of Europe ad infinitum and, therefore, that Europe could forever freeload on the US-directed surplus recycling. Thus, the Eurozone’s ‘constitutional’ foundation, or what I refer to as the Principle of Perfectly Separable Debts and Banking Sectors.

As long as the United States did play that stabilising role globally (that is, until the Fall of 2008), the Eurozone worked reasonably well, at least on the surface. With no need to centralise fiscal policies, the European Union could legitimise the lack of a European demos to keep in check its (a) Brussels-based technocracy and (b) a law-making process unconstrained by anything resembling a sovereign Parliament. With national parliaments supposedly exercising democratic control over fiscal policy, the EU’s institutions worked in the interests of an unholy alliance between a Central European heavy industry cartel, high output (mainly French) farmers, and a burgeoning financial sector.

However, as soon as the United States lost its capacity to stabilise the global economy through the operation of its twin deficits and of Wall Street, the Eurozone began to unravel.[1] At that critical juncture, there was no alternative to the centralisation of the management of public debt and, thus, of fiscal policies. But how could fiscal policies be centralised when they remained, in principle, in the remit of national parliaments and governments that were, essentially, bankrupt and in a death embrace with insolvent banking sectors? The answer Europe opted for was: By means of large loans to the insolvent nations which, to pass through the Parliaments of the surplus countries, had to come attached with punitive, austerian strings.

Thus, centralisation of Eurozonal fiscal policy took the form of an Austerity Union that magnified the crisis, caused it almost to dissolve the euro and, finally, when the ECB acted in the summer of 2012 to save the common currency, transferred the crisis from the money markets to the realm of Europe’s real economy. As the fault lines between the surplus and the deficit member-states deepen, causing the whole edifice to forfeit coherence and to slide into fragmentation, even the most ardent defenders of the original European design now advocate that, to save it, there is a need for a political union. Tragically, many commit the cardinal error of mistaking talk of a political union as a move toward a federal democracy.


“Ideally, Europe would be a political union… Consider two proposals. Why not have a European budget commissioner with powers to reject national budgets if they do not correspond to the rules we jointly agreed?… We also favour a ‘Eurozone parliament’ comprising the MEPs of Eurozone countries to strengthen the democratic legitimacy of decisions affecting the single currency bloc.”

The above lines were penned by two influential German politicians who were thought of as ‘true blue’ federalists in the early 1990s, courtesy of joint articles arguing in favour of political union: Karl Lamers, the CDU’s former foreign affairs chief, and Wolfgang Schäuble, Germany’s current finance minister.

In their recent article (Financial Times, 1st September 2014), Lamers and Schäuble return to their favourite theme, once more advocating political union and offering two examples of what they mean by the term in the present moment of the Eurozone’s history. It is interesting that they chose to publish their fresh piece, entitled ‘More integration is still the right goal for Europe’, as the debate on the Eurozone’s failure to shake off the Euro Crisis flared up again following the ECB President’s Jackson Hole speech, in which Mr Draghi acknowledged the deflationary pressures upon Europe’s common currency area and the role of universal austerity in fermenting them.

Looking carefully at their two proposals, one realises that, indeed, their idea of political union is spectacularly at odds with the notion of a federal democracy; indeed with constitutional democracy of any kind. This is not, I submit, the result of carelessness on the authors’ part but, rather, the logical and inevitable result of further European integration along the lines of the original EU design. Let’s take the two proposals one at a time.

Lamers&Schäuble, Proposal No.1: A fiscal overlord to end national sovereignty over budgets

The idea that rules that agreed to by all Eurozone member-states ought to be centrally policed by Brussels is all-powerful and to be ‘crossed’ only by those who wish to incur the collective wrath of Germany’s political establishment (as a certain French minister recently found out the hard way). However, Wolfgang Schäuble is possibly the only German politician to have taken this idea to its logical, philosophical even, conclusion. Demonstrating remarkable consistency over the years, Dr Schäuble is now repeating, perhaps somewhat more mildly, views that he outlined twenty years ago. For instance, on 15th June 1995, in Die Welt, he took a swipe at the notion of national sovereignty as non-sensical, pouring scorn over the “academic debate over whether Europe is a federation or an alliance of states”.

If Dr Schäuble was right then, that there is no noteworthy difference between a federation and an ‘alliance of states’, then the idea that the Eurozone could establish a fiscal overlord, with the power to veto national budgets, makes perfect sense now. The appointment of such a person to a position of great central power would, indeed, signal closer political union and a move toward federation. But, is there no difference between a federation and an ‘alliance of states’ or the ‘Europe of Nations’? I submit that there is. And it is the difference between democracy and despotism.

Back to basics, Part 1: Sovereignty as democracy’s bedrock

One often forgotten fact about liberal democracies is that a constitution’s legitimacy is determined not by its legal content but by politics. As Tony Benn suggested once, we should constantly ask those who govern us five questions: “What power have you got? Where did you get it from? In whose interests do you exercise it? To whom are you accountable? And how can we get rid of you?” Indeed, ever since Sophocles’ Antigone, we have known that all good women and men have a duty to violate laws not founded on political and moral legitimacy. Political authority is the cement that keeps legislation together and the sovereignty of the body politic that engenders the legislation is its foundation. To claim, as Dr Schäuble did in 1995, and implies again in 2014, that it makes no difference whether the Eurozone is an alliance of sovereign states or a federal state is purposely to ignore that the latter can create political authority whereas the former cannot.

An ‘alliance of states’ can, of course, come to mutually beneficial arrangements against a common aggressor (e.g. in the context of a defensive military alliance), or in agreeing to common industry standards, or even effect a free trade zone. But, such an alliance of sovereign states can never legitimately create an overlord with the right to strike down the states’ sovereignty, since there is no collective, alliance-wide sovereignty from which to draw the necessary political authority to do so. This is why the difference between a federation and an ‘alliance of states’ matters hugely. For while a federation replaces the sovereignty forfeited at the national or state level with a new-fangled sovereignty at the unitary, federal level, centralising power within an ‘alliance of states’ is, by definition, illegitimate, and lacks any sovereign body politic that can anoint it.

One may retort that the European Union’s democratic credentials are beyond reproach, as the Commission is appointed by elected heads of state who also form the European Council that legislates on behalf of Dr Schäuble’s ‘alliance of states’ or Jean Monnet’s ‘Europe of Nations’. Moreover, there is the European Parliament which has the power to throw out parts of this legislation. To round off this rejoinder, it is often added that sovereignty is, in any case, highly over-rated and profoundly meaningless in an inter-dependent, globalised world. In that kind of global village, the French, the Germans, indeed the Greeks, all Europeans, enjoy more sovereignty when they pool their national sovereignties together into one, common, European realm. And if this means that we institute a fiscal Leviathan, with a remit to keep us all in fiscal awe, and in line with the Stability Pact, so be it.

The above retort demonstrates how terribly Western European appreciation of the founding principles of liberal democracy has been depleted. The appalling error of such a defence is to confuse political authority with power. A parliament is sovereign, even if it is not particularly powerful, when it can dismiss the executive for having failed to fulfil the tasks assigned to it within the constraints of whatever power that the executive, and the Parliament, possess. Nothing like this exists today in the Eurozone. While members of the European Council are elected officials answerable theoretically to national parliaments, the Council itself is not answerable to any Parliament; indeed, to no body politic whatsoever. To claim that Iceland’s sovereignty is obsolete because it is too small to have much power is like arguing that a weak person with next to no political clout might as well give up her political rights.

To put it slightly differently, small sovereign nations, like Iceland, have choices to make within the broader constraints created for them by nature and by the rest of humanity. However limited these choices, Iceland’s body politic retains absolute authority to hold their elected officials accountable for the decisions they have reached within the nation’s exogenous constraints and to strike down every piece of legislation that it has decided upon in the past. In sharp contrast, the Eurozone’s finance ministers often return from Brussels, or wherever it is that the Eurogroup and Ecofin has just met, and decry the decisions that they have just signed up to, using the standard excuse that “it was the best we could negotiate” or that “I was outvoted at Council”

During the Euro Crisis, this lacuna at the centre of Europe grew hideously larger. Smaller member-state representatives notoriously argued, upon their return back home, that they disagreed with the Council’s decision but did not feel empowered to vote against the larger nations. At the same time, it was not uncommon for representatives of larger, powerful states also to blame the rest for bad decisions that they had consented to, on the basis that they had acted under duress, so as not to undermine European unity. So, even if a majority of Council members rejected the logic of the legislation Council had passed, the ‘story’ ended there as European Union law takes precedence over national laws. No forum or assembly of European citizens (including the so-called European Parliament) could, after that point, strike down these decisions or censure those who had reached them. In this sense, while small, powerless Iceland continues to enjoy full sovereignty, (the, by comparison,) omnipotent European Union has been stripped of all forms of sovereignty. Funnily enough, the Eurozone is a mighty macro-economy with a Central Bank, but no government and or body politic, and utterly lacking the “we, the people” who can uniquely provide the necessary bedrock of political legitimacy.

In conclusion, in the absence of a federation that will transfer sovereignty from national to a federal level, the EU’s legislative mechanism has always pushed legitimacy to breaking point. A fiscal Eurozone overlord, with the formal authority to wipe the floor clean the national parliaments’ authority over taxation and government expenditure, would signal the end of the pretence that the European Union remains in the liberal democratic tradition. That Dr Schäuble does not seem to understand that, and the fact that most commentators fail to recognise this failure of comprehension, is a hideous testimony to the State of the Union.

Lamers&Schäuble, Proposal No. 2: A Euro Chamber within the European Parliament

Would the creation of a Euro Chamber within the European Parliament not address the aforementioned point? Drs Lamers and Schäuble suggest that it ought to comprise MEPs from the Eurozone member-states.[2] Other proponents of ‘more Europe’ have suggested that the Euro Chamber should consist of members of national parliaments in proportion to their country’s population size, so as to extend the existing sovereignty of national parliaments over fiscal matters to the Euro Chamber and, ultimately, to legitimise the Eurozone’s fiscal overlord.[3]

The European Parliament is the only EU institution that remotely resembles a federal body. Elected directly in pan-European elections, it seems, to the untrained eye, equivalent to the US House of Representatives or to Britain’s House of Commons. However, it only takes a slightly closer look to notice that the European Parliament is nothing like any parliament consistent with liberal democracy. In the latter, all legislative power is vested in the parliament or congress, with the executive-legislature demarcation clearly marked. In the European Union the main legislative organ remains the Council of Ministers which meets and votes behind closed doors and is composed not of legislators but of members of the member-states’… executives.

These revolving doors between legislative power at the centre and executive power in the member-states was designed, purposely, in order to have laws passed without any serious scrutiny by any sovereign Parliament that is vested with the authority of the final arbiter. While the European Parliament has acquired, over the years, new powers to legislate alongside the Council, it is still not a proper Parliament. The fact that it shares legislative power with the European Council and, remarkably, lacks the authority to initiate any legislation, means that it lacks the political authority that could legitimise the transfer of sovereignty from the national level to any Euro Chamber within the European Parliament. Such a transfer would be the equivalent of transporting water from a local pond to a far away central reservoir using a sieve.

Clearly, Drs Lamers and Schäuble like the idea of a Euro Chamber because they assume that it would legitimise the actions and authority of their fiscal overlord; in their own words, it would the “democratic legitimacy of decisions affecting the single currency bloc”. The only manner in which one can agree with them is by deleting from one’s faculties all understanding of what parliaments are meant to be and do.

Back to basics, Part 2: Democracy is about minimising the executive’s discretionary power

This section ought to be superfluous. The fact that it is not reflects badly on a Europe that seems to have forgotten the minimum requirements for a functioning liberal democracy. So, here we are, stating what Europeans once upon a time knew well, namely that:

  1. The chief purpose of law is to create a level playing field between the weak and the powerful. While a level playing field does not preclude exploitation and serious violations of freedom, it is what the least the rule of law must provide
  2. To reduce all human interaction to power relations is the opposite of the rule of law and a gateway to despotism
  3. To prevent the reduction of human interaction to power relations, and to keep despotism at bay, the executive’s discretionary power must be minimised by a sovereign body politic with the means to minimise it.

Consider the Lamers&Schäuble twin proposals from this perspective. The fiscal overlord they propose is a type of ‘digital’ Leviathan whose remit is to say ‘Yes’ or ‘No’ to a budget submitted to her office by a member-state. This Leviathan will thus have the right to scrap, and ‘return to sender’, government budgets that violate the Eurozone’s (mainly Maastricht sourced) rules; e.g. Italy or France would now be instructed to re-write their 2015 budget, and introduce further spending cuts, or tax hikes, in view of the 3% deficit rule.

But how is this different to the ‘excessive deficit’ procedures already in place at the EU level? Why will the institution of an official overlord, a fiscal Leviathan, make a difference unless the latter is vested with discretionary power? Discretionary power to do what? Let’s take our example further.

When in 2009 the Irish twin bubbles (of real estate and banking) burst, the Irish government was forced by the ECB to take onto the state’s books private debt, and demand of taxpayers that they borrow mountains of money to repay it. The result was that the budget deficit, and public debt, skyrocketed violating the Eurozone’s ‘rules’ in the process. Similarly in Spain, whose government was nurturing a pre-crisis debt-to-GDP ratio lower than Germany’s, the crisis caused the government budget deficit and debt to rise above the Maastricht limits. What would the Lamers&Schäuble Leviathan have done at that point? Send the Spanish government’s budget back to Madrid? For what purpose?

The fact is that there was no level of austerity that could have driven Dublin’s or Madrid’s deficit under 3% of GDP without demolishing their national economies and leading Ireland and Spain to a hard default on their public debt a year later. Similarly today with Italy and France: there exists no level of austerity that can push their deficits ‘within the rules’ without, in the process, wrecking the Eurozone in the medium term.

In other words, if the fiscal Leviathan is to play any substantive role, she must be able to say a great deal more than ‘Nein’. In short, she cannot be… ‘digital’ (i.e. 1 or 0, Yes or No) and must issue ‘analogue’ replies to the state budgets submitted to her. In fact, she must be at liberty to propose to national governments alternative budgets that, nonetheless, still break the agreed to rules. Of a variety of rule breaking budgets, some of which are favoured by national governments and one by the Leviathan, it must be the Leviathan’s that prevails. If not, what is the point of her existence?

But then what should happen if the national government resists implementing the Leviathan’s preferred budget and turns down her overtures for reasons that the Leviathan deems inappropriate or unconvincing? Surely Lamers&Schäuble must propose that the Leviathan be equipped with the power to steer the final budget in particular ways that in no way flow uniquely and naturally from the existing, agreed upon, rules. Massive discretionary power will, therefore, be created at Europe’s centre de facto, even if denied de jure.

Looking back to 2008 once again, let’s consider what would have happened had the Lamers&Schäuble proposal been instituted at the Eurozone’s outset. Our fiscal Leviathan would have been in place staying utterly inactive before the Euro Crisis (at least in the case of the Irish and Spanish budgets which were well within the ‘rules’ year-in-year-out) but then would swing furiously into action once the Euro Crisis hit, exercising maximal discretionary power across the continent. Would she have displayed the same penchant for interventionism in the case of Ireland as she would have in the case of the German government which also flouted, post-2008, both the deficit and debt Maastricht limits?

Whatever the answer, it is clear that, in view of points 1,2&3 above, the Euro Crisis would have:

  • propelled the Eurozone into the realm of naked power relations between the Leviathan and Europe’s crisis-hit societies,
  • violated the rule of law at a European level, and
  • denied Europe’s weaker citizens and states any constitutional protection from arbitrary, discretionary power.

Granted that any Leviathan would need to have the authority not only to reject but also to fashion member-state government budgets, could a Euro Chamber within, or complementary to, the European Parliament, provide the missing body politic that protects Europeans from their own executive and maintains the rule of law at the heart of Europe? The minimal conditions for this protection to be on tap is that the Euro Chamber: (a) is uniquely empowered to hire or fire the Leviathan; (b) is the fount of final authority regarding the contents of each member-state’s budget; and (c) has powers that are clearly demarcated by a Euro Constitution.

There are three substantial issues here: First, neither (a) nor (c) are ideas that our leaders (including Drs Lamers and Schäuble) would accept either because they lack the political power to promote them at home or because they detest the idea of passing on to the Euro Chamber so much power. As I argued in the prequel to this article, “… it is not a simple matter to graft a federal democracy upon a Brussels-based technocracy representing the unholy alliance between run-of-the-mill apparatchiks, a powerful Central European cartel of heavy industry, national politicians who have their own cosy relationship with bankrupt local bankers, and large international banks”.

In conclusion, all talk of gradual moves toward a ‘political union’ and towards ‘more Europe’ are not a first step towards a European democratic federation but, rather, and ominously, a leap into an iron cage that will not only prolong the present crisis but also wreck any prospect of a genuine federal European democracy in the future. Throwing the peoples of Europe in that iron cage, and in the name of gradual steps towards a promised United States of Europe, will complete the business of de-legitimising ‘Europe’ in the eyes of Europeans. In a never-ending loop of frightful reinforcement, authoritarianism and the economic malaise will feed off each other until Europe is brought to its breaking point.


Iron cages do not evolve naturally into democratic federations. It would be foolhardy to expect a democratic political union to emerge after locking the Eurozone’s countries together under a system of arbitrary, discretionary power, in a dark cloud of permanent austerity, and in the absence of an Extra-market Surplus Recycling Mechanism. Instead, such proposals will turn domestic economic debates into international political conflicts within a European iron cage in which economic depression and misanthropy are the only growth industries. Such a pseudo-federalist, austerian, centralised autocracy is bound to damage the economic and political well being of every European country, rich and poor, in deficit and in surplus.

Undoubtedly, the Euro Crisis has fashioned powerful forces working in favour of further centralisation, of even less sovereignty for the national parliaments, greater powers for the powers-that-be within the Brussels-Frankfurt-Berlin triangle, etc. Nevertheless, as history ought to have taught us, none of this represents moves towards a democratic federation. Empire builders are impatient with checks and balances on the executive, especially when in a hurry and under duress. Even when their intended actions are good and proper, they are bound to turn nasty in the absence of limits on the executive. In the Eurozone’s case, things are far nastier. Once the executives’ austerian policies proved catastrophic, as they surely have done, they began to seek, and acquire, fresh arbitrary power to achieve their impossible goals. Now, as Drs Lamers and Schäuble demonstrate (along with many other ‘Europeanists’), they are intent on adding a ‘parliamentary’ fig leaf of legitimacy to the iron cage they have forged.

A few months ago, James Galbraith and I analysed (in “Wither Europe? The Modest Proposal versus the Federalist Austerians”) the growing melange of proposed solutions to the Euro Crisis. We found that proposals recommending some form of closer ‘political union’ will do nothing to resolve the Euro Crisis but will, instead, succeed in boosting magnificently Europe’s democratic deficit. In the context of the present article, my point is that the forces of centralisation engendered by the Euro Crisis, if left unchecked, will create centralised power that is precisely the opposite of a federal democracy. But is there an alternative?

Our own recommendation was in favour of our Modest Proposal for Resolving the Euro Crisis. The reason was that it offers Europe a chance to accomplish two crucial tasks at once: To address the crisis through: (a) europeanising its four components (the crises of public debt, banks, under-investment and the humanitarian crisis), while (b) decentralising political power through a reduction of the discretionary power exercised illicitly today by the Brussels-Frankfurt-Berlin triangle.

Seen from another, less politically charged perspective, the Modest Proposal’s greatest merit is that it offers a way to abandon the Eurozone’s problematic Principle of Perfectly Separable Debts and Banking Sectors, and to introduce the missing Extra-market Surplus Recycling Mechanism without creating any autocratic, discretionary power at Europe’s centre and without any need to re-write the European Union’s existing rules and Treaties.

How does the Modest Proposal achieve this, seemingly, paradoxical duet of objectives? How can we europeanise the solution to the Euro Crisis’ components without centralisation? Our answer is that the europeanisation of the four sub-crises can be achieved through redeploying existing European institutions, e.g. the European Central Bank (ECB), the European Stability Mechanism (ESM) and the European Investment Bank (EIB), in a manner that:

  • keeps the discretionary power of its management at a minimum by stating clear rules that they must follow under their new re-designed roles,
  • attacks systematically the Eurozone’s systemic problems with public debt, banks that are under-capitalised, aggregate investment that is woefully low and poverty that is on the rampage, and
  • makes it feasible for national governments to stick to the existing rules of the Eurozone.

The reason why no moves toward a ‘political union’ are necessary under the Modest Proposal, and thus no discretionary power is needed for some new fiscal Leviathan, is that the redeployment we propose: (i) does not require of the German, Austrian or Finnish government to pay for the Greeks’ or the Italians’ debts or investment needs, (ii) can be effected within existing Treaties, and (iii) is to be handled on the basis of fully rule-bound management of existing institutions.

While this is not the place to explain in full our Modest Proposal (see here), as my emphasis in this article is on its political and ethical advantages over the austerian alternatives that are bound to injure European democracy irreversibly, a few words are in order as an explanation of why the Modest Proposal is a genuine solvent of the hideous dilemma between (a) a Europe reminiscent of an Iron Cage and (b) a Eurozone that disintegrates with untold consequences for the world at large.

Examining each of the four sub-crises separately it is clear that national governments cannot deal with them on their own (even if they coordinate their actions) while Europe’s ‘centre’ is also not geared, at present, effectively to intervene. It is this lacuna that provides the excuse for proposals of ‘political union’ that will yield, in my estimation, both economic failure and political tyranny.

But, what if we could revise the rules and conventions under which our existing institutions function in order to attack these four sub-crises at source without violating the charter of the said institutions or any of the Treaties? What if we can introduce additional rules that are consistent with the existing rules and which leave no room for arbitrary power to their managers and require no new discretionary power in Brussels? Then, these four sub-crises can be dealt with at the European level, i.e. be europeanised, without a need for Leviathans at the centre. Indeed, by europeanising these realms of the Euro Crisis we can return effective power back to the national powers. Thus, my term Europeanised Decentralisation.

More precisely, the europeanisation of the four sub-crises, within existing Treaties, can be based on the following rule-bound redeployments of our three main European institutions:

  • the ECB manages the part of the Eurozone’s public debt that is allowed by the Maastricht Treaty on behalf of the member-states, without printing a euro and by charging all interest payments to the member-states (at the lower interest rate that the ECB can secure in the money markets)
  • the ESM is modelled on the US TARP[4] to recapitalise failing banks and take them out of national jurisdiction, so as to break up the death embrace between insolvent states and weak banks
  • the EIB is charged with the task of managing and overseeing a European New Deal investment-led recovery program, with the ECB purchasing EIB bonds in the secondary markets in the context of an effective, non-toxic program of Quantitative Easing that creates no bubbles in the financial sector but raises investment and combats deflation throughout the Eurozone
  • the interest accumulating within the TARGET2 account of the European System of Central Banks (i.e. large quantities of money that are an increasing function of the intra-European imbalances which are responsible for people going hungry in many of our countries) can, by a simple decision of Council, fund a Eurozone US-style food stamp program could be funded by the interest accumulating within the ECB’s TARGET2 account.

Notice that none of these policies violate any of the Eurozone’s existing rules and, in fact, can be implemented fully by adding supplementary rules for the ECB, ESM and EIB managers to follow so as to ensure that they are afforded no additional discretionary power. Meanwhile, to the extent that the above resolve the debt, banking, under-investment and humanitarian crisis that make it impossible for national governments to govern within existing rules, they restore a modicum of democratic control and, thus, reduce Europe’s abhorrent democratic deficit.


Alexis de Toqueville once wrote that those who praise freedom only for the material benefits its offers have never kept it long. In today’s Europe, those who wax lyrical about the sanctity of the existing ‘rules’ are their worst enemy and the handmaidens of discretionary, autocratic power. Europe’s democrats must, for this reason, beware of those speaking of moves toward ‘political union’ and ‘more Europe’ when the real objective is to preserve an unsustainable monetary architecture.

Given the European Union’s history, and the current state of the Eurozone, ‘political union’, ‘fiscal union’ and various either ideas for further centralisation are neither viable nor desirable policies. The institutions of the EU were designed, back in the 1950s and 1960s, in order to bleach politics out of them. And since nothing is as political, and as toxic, as an attempt to de-politicise a political process, the result was institutions at odds with the concept and practices of a democracy. Europeans understand this better now that the Euro Crisis has brought onto the surface the repercussions of the EU’s institutional design. Thus, they are increasingly treating the Brussels and Frankfurt technocracies as an army of occupation, a little like the French looked at the Vichy administrators. They do not want Brussels, as it is structured today, to graduate into their federal government in response to a crisis of the EU’s own making. With good reason.

In the midst of this legitimation crisis, as Jurgen Habermas might describe, Europeans are being lured into a dreadful Faustian bargain: accept less democracy, more centralisation, greater discipline now and, in the future, you may be getting something akin to a federal state. Alas, accepting this deal will not bring federation any closer. Instead, it will:

  • Bolster the Euro Crisis
  • De-legitimise the European Union further in the eyes of Europeans
  • Replace whatever democracy we have left at the national level with consultative processes that Brussels uses in order to cement a permanent commitment to deflationary, highly redistributive (in favour, primarily, of banks and, reliably, of the top income groups) policies
  • Reduce political debates on economic policy to technocratic discussions amongst unelected managers whose allegiance lies with the technocracy that was created to service the interests of the ubiquitous Central European cartel and an all-devouring financial sector
  • Ascribe pretend- accountability to a European Parliament or a Euro- Chamber which, in reality, acts nothing like a parliament but, rather, uses the semblance of a parliament in order to conceal the fact that European Law is passed in the radical absence of a genuine parliamentary process, and
  • Entrench in European law the dangerous idea that sovereignty is passé in the era of globalisation.

None of these developments is consistent with a sustainable European Union. At some point, Europeans will shake this monstrosity off their backs and escape from the iron cage under construction around them. Unfortunately, the resulting European disintegration will come at a horrendous socio-economic cost.

This is why it is important to inject into Europeans’ minds and souls the optimistic message That Astonishingly There Is AN Alternative (i.e. TATIANA, as opposed to… TINA). The said alternative is to combine europeanisation of the crisis’ four components, by means of rule-based re-deployment of the ECB, the ESM and the EIB, with the decentralisation of power which is needed to reinvest national parliaments with the power to reinvigorate Europe’s democracies. Then and only then, once democracy has been revived at the level of the member-states, can we begin the conversation that we must have of what future we want for Europe. Of whether we wish to create a genuinely democratic European federation or, indeed, to find ways of orderly disbanding our monetary union.


[1] This is the main thesis of my The Global Minotaur: America, Europe and the future of the world economy, London: Zed Books – see Chapter 9 of the second (2013) edition.

[2] This is also the view of the so-called ‘Glienicker Gruppe’ of German economists comprising Armin von Bogdandy, Christian Calliess, Henrik Enderlein, Marcel Fratzscher, Clemens Fuest, Franz C. Mayer, Daniela Schwarzer, Maximilian Steinbeis, Constanze Stelzenmüller, Jakob von Weizsäcker, Guntram Wolff.

[3] E.g. the so-called French-based ‘Piketty Group’ consisting of Thomas Piketty: Florence Autret, Antoine Bozio, Julia Cagé, Daniel Cohen, Anne-Laure Delatte, Brigitte Dormont, Guillaume Duval, Philippe Frémeaux, Bruno PalierThierry Pech, Jean Quatremer, Pierre Rosanvallon, Xavier Timbeau, Laurence Tubiana.

[4] The Troubled Assets Relief Program


  • In system theory talk, when a very small change in input produces an extremely high divergence at outpout, this system is unpredictable and unstable. EU is such a system according to your description. The input (decision about alliance or federation) needs such a great deal of dissection and discussion and consideration and these ideas blend so much that they seen indistinguishable, whereby at the output you may get either democracy or despotism.
    No! EU is an unstable system and the pendulum is moving fast towards the other end, the one of dissolution.

    • “The creation of the euro was followed by the emergence of huge imbalances, with vast amounts of capital flowing from the core to the periphery. Then came a “sudden stop” of private capital flows, forcing the peripheral nations to eliminate their current account deficits, albeit with the process slowed by the provision of official loans, mainly through loans among central banks. The really bad news for the periphery is that so far the adjustment has taken place mainly through depressed economies rather than regained competitiveness; so the counterpart of that “improvement” for Spain is 25 percent unemployment.

      Normally you would and should expect the adjustment to be more or less symmetrical, with surplus countries reducing their surpluses as deficit countries reduced their deficits. But that hasn’t happened. Germany hasn’t adjusted at all; all of the rise in peripheral European current accounts has taken place at the expense of the rest of the world.

      And that’s a very bad thing. We are still in a world ruled by inadequate demand, and very much subject to the paradox of thrift. By running inappropriate large surpluses, Germany is hurting growth and employment in the world at large. Germans may find this incomprehensible, but it’s just macroeconomics 101.

      You might argue that it’s not the German government’s fault that it runs surpluses — but you’d be wrong. (I’ve fallen into this trap, but acknowledged the error.) For one thing, Germany has pursued fiscal austerity despite its creditor status, contributing to an overall tightening of policy in the eurozone. And one way to think about Germany’s role within the euro is that it is in effect engaging in huge foreign exchange intervention via Target 2, which holds down the “shadow Deutche Mark”:

      Of course, I don’t expect German officials to admit that there’s anything to what Treasury says. They’re not big on macroeconomics as we understand it; actually, they’re not big on accounting identities, since their view seems to be that everyone should be like Germany, and run huge trade surpluses.

      But Treasury just stated the obvious and true.”

      Paul Krugman, November 2013

    • In systems theory unstable systems become stable by incorporating a feedback loop. Feedback is introduced by connecting the output with the input. The recycling of surpluses seems like the equivalent of feedback in electrical or mechanical systems.

  • Irrespective of how the EU was put together and under which real or false intentions it developed to this point, the bottom line is that today the Eurozone has turned into a German prison. Therefore instead of spending time figuring out how to save this unholy/unwanted construct, our time ought to be better spent on how quickly we can dismantle it.

    And if you ask what went wrong, the simple answer is: Germany. Two WWs later and Europe today has an ever more acute German Problem which pales in comparison to those of the past. Only another war could solve such type of problem because it defies reason, justice as well as any type of professed pseudo-fraternity.

    One thing is beyond doubt today: the EU for the vast majority of its citizenry makes its people poorer, less democratic and undeniably less free. Get out of this prison, NOW!

  • Not only EU is an unstable system, but in fact it is a complex system of far greater subtlety than the EU leaders are willing to accept. And they modeled that on certainty and straight linearity conditions that simply do not exist. Linearity is an artificial way of viewing the world. But real life with real politics of real people is by far not linear. And as a hybris most of the leaders do not know the meaning of the word in its ancient greek context.
    So they simply serve gladly their oligarchic state. Exercising authority in the same way as with the inherited wealth. Without discipline. And chaos may not be an abstract state of the system anymore.

    • ==> A missing word above, due to wrong quotation marks used. P
      ===> Please read : And as a hybris most of the leaders do not know the meaning of the word ECONOMY in its ancient greek context.

  • Complex Non-Linear Social/Political systems require careful, cool-headed reforms which are implemented by well trained, problem solvers and people who are capable of strong leadership & are able to get their underlings to implement a thorough plan of action. As Mr Galbraith & yourself have explained in the recent past…this hasn’t existed in Western or Eastern Europe for many years, may be decades! So I just want to repeat what you have said in the past…when the peoples of any nation are collectively punished, publically humiliated, stereotyped as either “Grasshoppers” or “Ants”…the evil serpent in the human psyche will return, replicate and run Amuck!

  • Clearly, there is a third option which would entail democratic federalism, with a directly elected fully sovereign legislative branch, a true federal sovereign issuer of the currency and imposer of FEDERAL taxes to give it value, etc. The EU-wide federal legislative branch may very well be bi-cameral (with the upper-house being something like a Council of States).

    It’s not like there isn’t a workable model (which can be improved upon) to act as a blue-print.

  • “In other words, if the fiscal Leviathan is to play any substantive role, she must be able to say a great deal more than ‘Nein’. In short, she cannot be… ‘digital’ (i.e. 1 or 0, Yes or No) and must issue ‘analogue’ replies to the state budgets submitted to her.”

    In order for for any kind of change of the current system to take place those in power, first and foremost, would have to agree that your above quoted statement is correct. This would at least enable them (i.e. Mr Schäuble and his entourage) to see the flaws in their concept of a federalized europe, which you so accurately describe.

    Unfortunately they seem to be incapable of thinking along ‘analogue’ lines. It’s the ‘swabian housewife’ – theory in effect: When the finacial crisis began to turn into a ‘euro-crisis’, chancelor Merkel made this infamous analogy between a nation consolidating its budget and a housekeeper from the southern german state of Swabia, whose inhabitants are famous for their alleged frugality and financial discipline, wherein she claimed that every swabian housewife knew not to spend more than she earned and that the deficit countries of the eurozone would be well advised to follow her example.
    There is to date still no sign of any understanding among the german elites about the difference between macro- and microeconmic points of view. In fact, judging by their words and actions over these past five vears, it seems like they don’t see the former as a legitimate angle on the problems at hand, but as a rather un-scientific approach, which lacks the power of ‘digital’ thinking and is therefore not a viable option. ‘Analogue’ thinking beyond a mathematically defined framework of ones vs. zeroes or good vs. bad fiscal policy that would require infinetly more human ‘processing power’ in order to reach a conclusion which might not even stand as ultima ratio, simply does not compute with them.

    Consequently, what they want are seemingly definite, fast and easy solutions to the problems at hand they can then forge into another technocratical framework and forget about. Looking at the big picture evokes all kinds of uncertanties that defy their entrepreneurial arithmetic, take way too long to process and can’t be framed into neat little soundbites for the public.

    Admittedly, describing a complex system through this ‘black or white’ filter has propably been an essential part of politicians’ campaign strategies ever since the first european democracies emerged along the mediterranean coastline and it has also been the preferred way of thinking of all the ‘swabian housewifes’ throughout history in order to make the world around them seem more managable than it actually is. But my guess is that we have now reached a point in history where propaganda has become a means to its own end and the propagandists themselves have come to percieve it as the actual truth rather than as a tool to sell their policies to the public.

    Sadly, I don’t think it is possible to convince the powers that be of any kind of ‘analogue’ solution to the european problem, as long as the people in charge remain slaves to their own black-and-white rhetoric. The only peaceful way to rid ourselves of these puppets would be to convince the people that seemingly fast and easy solutions may not always be the best ones and that they should give their votes to people who don’t claim to have them ready. And there we hit the wall.

    • Hubert:

      What you mean to say is “binary” instead of “digital”. The 1 or 0 is a binary outcome whereas the same outcome is always digital because it involves digits (i.e. 0 or 1).

    • Dean,

      Actually, I was refering to Yanis’ use of the word ‘digital’ in the article. Maybe I misunderstood him.
      Of course you’re right to point out that ‘digital’ does not necessarily mean binary. But I still like the ‘analogy’, even if it may not be making the most accurate use of the term, because the people I was writing about seem to cling to the notion that human interactions, even within complex social systems, can be explained by mathematical algorithms whose outcome can ultimately be judged in absolute terms like black or white, right or wrong, one or zero. Following that way of thinking, people, societies, whole nations and the world economy can be governed and steered in the ‘right’ direction if only one uses the proper mathematics.
      In other words, the leading class of our western civilization ist treating humanity like a complicated machine, and their approach to fixing its flaws is constantly updating its operating system and working on patches and bugfixes instead of facing the fact that the whole contraption just doesn’t work.
      I could also just have accused them -again – of being mindless worshippers of the colden calf that is ‘the market’, believing that their rational expectations will eventually be fullfilled by their self-made pagan deity and thus acting most irrationally without ever noticing it.
      But I always write something along these lines and I guess it’s getting a little boring.

    • o.k. I understand you better now. But here is the thing Hubert. If the masses are directed in a certain way and then Merkel conducts 600+ private polls (paid for by the German taxpayer to the tune of 2 Million euros) to basically reflect precisely what the public sentiment is as a means to staying in power then we have the definition of the perfect negative loop. First the elites manipulate the people and then the politicos reflect and amplify the manipulated opinion of the public….hmmmmm……none of this sounds very good; do you agree?

    • @ Dean

      I absolutely agree. Which is why I sometimes wish there was a way to force people to educate themselves about what’s really going on instead of blindly believing all those polls, studies and expertises bought and paid for by special interest groups who have anything in mind but the wealth of nations and their citizens.
      But of course there isn’t. And democracy keeps on killing itself by remaining trapped in that feedback loop.

  • Yanis, I greatly admire your logical description of the political difficulties facing all European citizens today, but with one proviso; the now desperate need for what one might describe as new private sector rules and institutions related to the provision of free enterprise, private sector employment. To that end and to compliment your own input, recently, The Times, here in the UK had put up an article under the headline of “Euro Blues” to which I had placed this comment, which I feel applies just as much to your article above.

    “These eight words still ring in my ears, regardless that they were spoken by one of two city bankers asked to interview me by the Bank of England in 1994:

    “It is the government’s responsibility to create jobs”

    These so called “Euro Blues” are not European in origin; they originate from the self same mindset that spoke those words to me two decades ago. So the very first thing to accept is that the problem is not confined to the lack of action by several European governments; it is an underlying problem caused by a widely held belief, that carries right across the entire financial industry of the Western economies; that the responsibility to create jobs, economic prosperity, financial stability; all rests with government.

    That illusion was deliberately created by executive governments of all complexions to deliver total control over their respective economies; to themselves. By the same token, the free market for delivery of what Adam Smith describes as Capital Stock in the introduction and plan of work to The Wealth of Nations, was deliberately redesigned to become the mechanism for delivery of ever increasing “sovereign” lending to the same executive governments; now so desperately in debt. In so redesigning, they removed all thought, mostly by the addition of very complex rule structures, about those previous responsibilities to create jobs; outside of government influence.

    In the real world, by far the majority of employment is created by individuals creating new, very small businesses, that they both own and manage; free enterprise businesses. So the very first thing to realise is that, by permitting “Government to create jobs”, the rest of the financial system has lost perception of their own role in that process.

    Today, everyone outside of government must relearn that the primary responsibility is surely the re-investment of the savings of the people, in work, (the wellspring for the future economy), for the benefit of the working nation; particularly, into the competitive activities of those that wish to create prosperous employment for the citizens of the nation wishing to work; through the establishment of many, well capitalised, new, privately owned, free enterprise businesses; particularly, those very small new businesses, right down at the grass roots of the economy?

    My point being, that by creating the financial services industry, everyone failed to recognise the need to replace the grass roots function of that delivery of the early stage equity capital into new, very small, free enterprise businesses.

    This is a challenge facing every professional in the wider financial services industry. At what point does everyone recognise the now desperate need for a change in direction, ergo, re-directing that wellspring back into its once very successful role of capitalising the creation of a prosperous economy; outside of the influence of “Government”?

    Again, modern economics seems unable to recognise the benefit of competition between potential employers of the people, for their use as employees; to drive up the income and thus the prosperity of the employee.

    No one talks about increasing competition for the potential employee.

    To deliver competition between employers, for the employment of the people, requires that they can raise new equity capital, delivered on free enterprise terms, to create new competitive employment. That the competing employer has to raise the value of their potential employees income to attract the local citizen to their employment. There is no other mechanism that will do that.

    This is the simple fact everyone seems to have forgotten; to increase prosperity requires that we deliver competition between employers, and the only way to ensure that is through competitive investment; bringing us right back to the matter of the level of available capital to generate competition for employees; between employers; outside of government; to ensure the ongoing prosperity of the nation.

    The only way forward is the creation of rules, mechanisms and institutions dedicated to the delivery of free enterprise based equity capital to any potential employer; to ensure delivery of competition between them; for the employee.

    Until the entire financial services industry grasps the need to define both the required level of invested equity capital, Adam Smith’s Capital Stock, from that savings wellspring; particularly right down into the grass roots of the wider, free enterprise economy; along with the necessary rules, structures, mechanisms, institutions for such delivery, surely; no nation will succeed in in any long term aim; to create a stable, prosperous, successful, national economy?”

  • Hi Yanis,

    Considering your idea was formulated along with James Galbraith who is a proponet of MMT, I (an economics and politics noob) would have imagined that you would suggest that the eurozone countries get out of the Euro and into their own sovereign currencies but with trade treaties that enable some kind of Extra-market Surplus Recycling Mechanism. However, you dont recommend that. As far as I understand you instead recommend measures similar to those taken by sovereign countries like the USA but still within the Euro straitjacket. Can you please explain why? Thanks in advance! 🙂

    • While I do not wish to speak on behalf of JKG, he and I agree entirely on this matter. If the Eurozone was merely a fixed exchange rate system, based on bilateral pegs, its dissolution would be the optimal strategy – exactly what happened to Bretton Woods when its underlying ‘assumptions’ no longer held – or what happened to the Latin American countries that had foolishly pegged their currency to the US dollar. Alas, the Eurozone is more than that. Our peripheral countries do not have national currencies that are pegged to, say, the euro or the DM. They, in effect, have a foreign currency ruled over by a foreign central bank that is in complete control of their banks. While it would be ideal to have our own currencies again, the trajectory that would take us to that state would first drag us through the fire of hell. Why? Because it takes 12 months at the very least to create from scratch a currency. 12 months during which all hell will break loose, meaning that a massive capital flight will ensue the moment it is announced that we shall be re-constituting our currencies. This is equivalent to pre-announcing, 12 months in advance, a devaluation.

    • The correct answer is a coordinated EMU breakup. Not a Grexit, or a Frexit or Brexit but a 16EZexit which will leave Germany with a de facto D-Mark despite still calling it a euro. It’s the substance that counts not the appearance.

      No one in the right mind is advocating a return to drachma. These are not unilateral moves we are talking about; rather very sensitive, highly skilled coordinated moves that need to take place so as to leave Germany isolated and on her own to ponder the consequences of her “freeloading” which is no longer allowed or permitted in any shape or form.

  • Oh boy, this article was worth the wait! Your political analysis has come a long way over the past 4 years that I read you blog. I am in complete agreement with your assessment of the current EZ regime as an “iron cage”. But, here are some thoughts.

    1) Methinks the Leviathan is already in place, in the form of recent EZ treaties. Whether it will be a “troika” scheme, an ECB “conditionality” or the “fiscal overlord” of Schauble-Lamers is just a matter of form, not substance.

    2) “… those who praise freedom only for the material benefits its offers have never kept it long.”
    To this, I would add the dual; that those who choose to tolerate loss of freedom, in order to keep their material benefits, have never kept them long.

    3) It is likely that some form of the Modest Proposal’s 3 policies–public debt mutualization, banking union, Marshall plan—will be implemented, in order to avoid decay of the EZ. Yet, the Modest Proposal has been deemed “unconstitutional” (remember the Karlsruhe decision) w.r.t its “decentralization” aspect. Then what? Most likely, a Faustian “Grand Bargain” will be struck: consent to the Leviathan in exchange for Germany’s assent to the 3 policies—i.e., a Leviathan who may not be an austerian, at first.

    So, see my point (2) above.

    4) In my mind, the only chance of having both the MP’s policies and maintain liberal democracy, is if it arrives as another “Grand Bargain”; either that, or we break up the EZ and go through the “12 months of hell”.

    This was the way progress happened throughout history, e.g., the New Deal, imposed under the spectre of the communist party taking power in the USA. Only at the precipice do the powers-that-be yield to the hoi polloi, when it is against their interests.

    And, if they don’t yield, then let us have the “12 months of hell”. For, if the Iron Cage is set up, and we learn to tolerate it, escaping may be much more costly.

    PS. I don’t really understand your “postmodern feudalism” analogy, but I recall this; once feudalism was blessed by the church and became the status quo, it lasted for a thousand years and took a century of civil warfare to get rid of it.

  • I can’t but agree with Krugman when he says: the big lesson of the eurozone disaster is that you can’t have independence without your own currency. You just can’t. That’s a fact.

    So the question for all eurozone governments is” “when did you make aware your people about this? when did your people said that they were o.k. with subordinating their sovereignty? as part of what debate and democratic process?”

    “Scots, What the Heck?
    SEPT. 7, 2014

    Paul Krugman

    Next week Scotland will hold a referendum on whether to leave the United Kingdom. And polling suggests that support for independence has surged over the past few months, largely because pro-independence campaigners have managed to reduce the “fear factor” — that is, concern about the economic risks of going it alone. At this point the outcome looks like a tossup.

    Well, I have a message for the Scots: Be afraid, be very afraid. The risks of going it alone are huge. You may think that Scotland can become another Canada, but it’s all too likely that it would end up becoming Spain without the sunshine.

    Comparing Scotland with Canada seems, at first, pretty reasonable. After all, Canada, like Scotland, is a relatively small economy that does most of its trade with a much larger neighbor. Also like Scotland, it is politically to the left of that giant neighbor. And what the Canadian example shows is that this can work. Canada is prosperous, economically stable (although I worry about high household debt and what looks like a major housing bubble) and has successfully pursued policies well to the left of those south of the border: single-payer health insurance, more generous aid to the poor, higher overall taxation.

    Does Canada pay any price for independence? Probably. Labor productivity is only about three-quarters as high as it is in the United States, and some of the gap may reflect the small size of the Canadian market (yes, we have a free-trade agreement, but a lot of evidence shows that borders discourage trade all the same). Still, you can argue that Canada is doing O.K.

    But Canada has its own currency, which means that its government can’t run out of money, that it can bail out its own banks if necessary, and more. An independent Scotland wouldn’t. And that makes a huge difference.

    Could Scotland have its own currency? Maybe, although Scotland’s economy is even more tightly integrated with that of the rest of Britain than Canada’s is with the United States, so that trying to maintain a separate currency would be hard. It’s a moot point, however: The Scottish independence movement has been very clear that it intends to keep the pound as the national currency. And the combination of political independence with a shared currency is a recipe for disaster. Which is where the cautionary tale of Spain comes in.

    If Spain and the other countries that gave up their own currencies to adopt the euro were part of a true federal system, with shared institutions of government, the recent economic history of Spain would have looked a lot like that of Florida. Both economies experienced a huge housing boom between 2000 and 2007. Both saw that boom turn into a spectacular bust. Both suffered a sharp downturn as a result of that bust. In both places the slump meant a plunge in tax receipts and a surge in spending on unemployment benefits and other forms of aid.

    Then, however, the paths diverged. In Florida’s case, most of the fiscal burden of the slump fell not on the local government but on Washington, which continued to pay for the state’s Social Security and Medicare benefits, as well as for much of the increased aid to the unemployed. There were large losses on housing loans, and many Florida banks failed, but many of the losses fell on federal lending agencies, while bank depositors were protected by federal insurance. You get the picture. In effect, Florida received large-scale aid in its time of distress.

    Spain, by contrast, bore all the costs of the housing bust on its own. The result was a fiscal crisis, made much worse by fears of a banking crisis that the Spanish government would be unable to manage, because it might literally run out of cash. Spanish borrowing costs soared, and the government was forced into brutal austerity measures. The result was a horrific depression — including youth unemployment above 50 percent — from which Spain has barely begun to recover.

    And it wasn’t just Spain, it was all of southern Europe and more. Even euro-area countries with sound finances, like Finland and the Netherlands, have suffered deep and prolonged slumps.

    In short, everything that has happened in Europe since 2009 or so has demonstrated that sharing a currency without sharing a government is very dangerous. In economics jargon, fiscal and banking integration are essential elements of an optimum currency area. And an independent Scotland using Britain’s pound would be in even worse shape than euro countries, which at least have some say in how the European Central Bank is run.

    I find it mind-boggling that Scotland would consider going down this path after all that has happened in the last few years. If Scottish voters really believe that it’s safe to become a country without a currency, they have been badly misled.”

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