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MarkGB 

"Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world" - Henry Kissinger

and yet...

"Sooner or later everyone sits down to a banquet of consequences" – Robert Louis Stevenson

A dream of 'peace and prosperity' or a dream of federalism - they are not the same thing

In response to an FT article by Gideon Rachman on 29th June 2015, entitled 'Europe's dream is dying in Greece'

http://www.ft.com/cms/s/0/e965eca6-1e45-11e5-ab0f-6bb9974f25d0.html#ixzz3eTec35zy

Not all who share the "European dream of unity, peace and prosperity" also share the dream of a Federal Europe. The first is a state of civilisation - a state of 'being', the second is a State of government, of politics.

In my view, the dream of peace and prosperity has been hijacked by the dream of federalism. The Euro was meant to be a step towards federalism, made by a group of people who wanted to go the whole way to fiscal union, but knew they couldn't get there at that time, because the desire to maintain individual national sovereignty was too strong. They took the step anyway, using a badly designed currency, a half way house, hoping that it would work well, the individual nations would learn to accept it, and fiscal union would follow. 

This was folly - a common currency will never work so long as there are 19 different bond markets and 19 different fiscal policies, all trading on the same exchange rate. This amounts to a glorified peg, and pegs always break. The Euro is broken and Greece is bust. No amount of pretence will change that, and pretence is not a good way to create peace and prosperity, whatever Mario Draghi or Christine Lagarde might say to the contrary.

"Unity, peace and prosperity" is still a dream for most of us - who in their right mind wouldn't want that? A Federal Europe is not the only way to get there, many of us don't want it, and its about time we had an honest conversation about what we do want, unless we think another 20 years of drip drip federalism is a good idea - I don't.  

Personally, I think free trade creates peace, not conformity and certainly not the rigged markets we have currently. The politicians in Europe are throwing the baby out with the bath water and the federalists don't seem to get the irony - maybe they should read Adam Smith to reacquaint themselves with another approach.

As if Jeb Bush would ever use his name for personal gain...

Martin Wolf says no reason to suppose investment banking is riskier than retail banking