Financial Failings in Europe

By: Grainne Rhuad

With the pomp and circumstance of the English monarchy’s royal wedding done I’m left wondering what on earth are all those gift shops going to do with all the leftover wedding kitsch they created to cash in on the wedding. I mean, how many tea trays can possibly be sold with the royal bride and groom’s poorly replicated faces on them?

Although I’ve never understood the drive to collect things glorifying other people’s countenances I find myself feeling a little sympathetic towards the shop owners who are hawking this shite.  Money must be made off of this wedding somehow, especially given the fact that English tax payers footed the bill for the wedding.

The royal family issued a statement in the weeks leading up to the wedding that they were trying to keep costs down, but just take a look at some of the expenses for this shindig:

Just the cake itself cost $80,000.  Okay, there were probably a lot of people to feed but to put it in perspective that’s approximately $138
a slice.  I don’t know about you, but I paid a grand total of $500 for my wedding cake.

Kate’s dress itself cost $434,000.  To put this in perspective, the average wedding dress of a high end wedding is around $1500.  Also there was absolutely no reason to even purchase a dress, designers were likely clamoring to provide one for free.

No accounting has been made of how much was paid to police and other security that for obvious reasons had to work overtime.  Altogether it is
estimated the wedding cost taxpayers £20 million (that’s 32 million U.S. dollars).  Just think of what sort of social programs could be funded had the couple been married quietly in one of their many palaces without all the pomp.

I bring all this up because England like the rest of the European Union and indeed the world is in a deep recession.  Yet somehow the monarchy managed to sell the world on the uplifting value of a wedding which they would only catch orchestrated glimpses of on the telly.

Lest we think the U.S. is the only country in a financial crisis right now, it’s important to take our blinders off and understand that the whole of Europe is floundering.  Adding to the problem is the EU, the very institution which was supposedly going to help prevent any European nation having to stand alone.

The EU has its origins in the Coal and Steel industries of Europe which banded together after the Second World War in order to provide stable and fair trade agreements.  Over the next couple of decades this cooperation grew to include food commodities and travel.  Eventually making it possible to travel throughout Europe without passport and culminating in the introduction of the Euro, a universal currency.  After the events
of September 11, 2001 the European Union banded even closer together in order to share information and law enforcement.  Currently the EU boasts 27 member countries.

However the drawbacks to being so closely linked are beginning at this time to show.  With Ireland having been in a long-term state of unrest, the economy was severely impacted and the EU stepped in to help bail them out.  Even still Ireland has not been able to get on its feet and recently the EU had to reduce its interest rates on money borrowed hoping Ireland will be able to pay something of its debt.

Notably three countries have been faltering and in recent years have petitioned for bailout from the EU, Ireland, as mentioned before, also Greece and Portugal.

This has caused tension between cooperating countries, specifically Britain in which Conservative Eurosceptics are looking for a fight. They
are on the prowl for issues big enough and provocative enough to justify a confrontation with the government, as they seek to advance their core objective: edging a reluctant Tory leadership closer to including an In-Out referendum on EU membership in the next party manifesto.

Put plainly they do not want to bailout Portugal.  The argument being that EU funds are meant to be for disaster response and the whole of Europe is in financial crisis.  The fact that Britain might be required by treaty to contribute to bailout is becoming a divisive point.  Estimations of British contributions are somewhere around £3.2 billion.  This is in addition to their bailout contribution to Greece which was in the range of €945 million to €4.26 billion, with the higher end of the estimate being more likely.  At a time of painful spending cuts at home, British taxpayers are going to have to dig deep for Portugal, to the tune of billions. Makes a big wedding party sound like a really really bad idea.

However Britain obviously is not the only country facing the hard task of contributing to its neighbors in financial stress.  Spain is currently facing an all-time high in unemployment rates as is Italy.  All this brings to bear the question: Is the EU strengthening Europe as a whole or weakening it by making all of Europe financially unsound at the same time?

One would postulate the latter as just like the U.S. the EU has begun to look to borrow money from China.  China is not exactly excited about the prospects.  While China exports a lot of goods to Europe, Europe really does not have a lot to recommend itself to China.  Therefore a largely pointless courting dance has begun with China holding all the strings and Europe desperately trying to impress. “China is not adverse, however, to extracting maximum political advantage from Europe’s predicament, by holding out the promise of future financial help.  Small amounts of Chinese cash trickled through. But none made the slightest bit of difference to Europe’s predicament.

Beijing’s true opinion of Europe was revealed last Saturday by Mr. Lou Jiwei, the boss of China Investment Corporation, the country’s sovereign wealth fund.

Addressing the Boao Forum for Asia, a gathering of regional business and political leaders held on Hainan island, he said that ‘from the investment perspective’, he was ‘not very optimistic about Europe’”.Currently the dialogue of the deaf between Europe and China is set to continue, with the Chinese seeming to offer help while real salvation remains a mirage.  This is what China seems to do best.  They haven’t stayed a major power for centuries for no reason.

But what does all of this mean to the EU, the U.S. and the world?  There is a lesson here.  Diversity is important.  Being big and having close
allies as the EU does as well as the U.S. with her states can be strength.  But it could also be a weakness as when united they all fall down.  Being diverse and smaller allows for countries to specialize, have more bargaining power and make decisions based on what is best for those living in the area in question. It would allow for England to tell the rest of Europe to “Sod off, we’ll take care of ourselves.” (And assumedly pay for ridiculous weddings “For the uplifting of the English people.”)

The same could be said in say, Alaska if they regained sovereignty, they could sell their resources (or not) under their terms for their benefit, not ordered to by the U.S. government.

The Great Experiment of unifying nations may be a failure.  It certainly looks that way.  It is probably time to start looking at diversifying rather than unifying.