May 25, 2007 (the date of publication in Russian)

Mikhail Khazin


The mission of Angela Merkel and Nicolas Sarkozy is to keep the euro zone under control of Washington and London

For many years – or maybe even decades Ц Europe has been living in accordance with double standards. Not just in the banal form, "our son-of-a-bitch" being allowed what is forbidden to others to a smaller extent. This phenomenon is much broader though hardly visible on the surface.

While the USSR existed, Europe could not allow itself a geopolitical game of its own. All the attempts to start such a game – particularly represented by de Gaulle's policy or the Communist parties of France and Italy in even earlier times, were harshly restrained by the United States.

After USSR's disintegration, the situation started changing, and Europe – primarily France and Germany Ц undertook an active search of their own geopolitical identity. This was expressed in many developments, including the accelerated enlargement of the European Union, the effort to adopt the European Constitution, as well as efforts to develop Europe's own military forces, independent from the United States and outside NATO.

By today, all those attempts have turned a failure.

The European military forces are not established. The constitutional process is stalled. New EU members behave rather as US allies than "old EU"-loyal nations.

But something more is wrong about the European Union generally. Despite all the attempts to "detach" from the United States and Atlanticism – which is complicated due to powerful influence of the Atlanticist factions of the European elite Ц the EU is able to function only in coexistence with the United States with its present financial and economic policy, and in the framework of the Western globalistic project which rests upon two pillars Ц the US and the UK.

The essence of Europe's dependence on the United States is determined with the system of global division of labor. In the aftermath of World War II, this system was developed in a way granting Europe the role of producer of goods with a high added value, the United States being the major consumer of those goods.

In 1940-1960s, the US demand for commodities was affordable; today, it is significantly stimulated with USD emission. The United States produces around 20% of the world's GDP (in purchasing-power parity), and consume over 40% of the global product. In Europe, those "scissors" are not so wide (20% and 25-30%), but the major problem is different. Europe's surplus of financial resources is determined by the US demand, which is at least 50% supplied with monetary emission – which means that this demand may collapse at any moment.

Definitely, the global financial establishment is not at all intended to destroy the system which enables it largely to rule the world and Europe in particular. Today, however, this establishment is not more able to keep the global financial situation under control.

A typical implication of this establishment's concerns is seen in the arm-twisting effort to plant Atlanticist political leaders in the major European nations – Germany and France. Angela Merkel and Nicolas Sarkozy were chosen not "on occasion" but for a quite clear purpose which is now being implemented. The task of these European leaders is to reinforce the "Atlantic unity" Ц more in economic than merely ideological terms. The purpose is to prevent the European economy from starting a "free float".

Why is this objective so crucial for the United States today? To make a judgment, we should look back at the options of salvation of the global financial and economic system, earlier used by Washington.

At the first signs of the financial system’s instability, the United States chose "pure monetarist" levers to handle it. This option wrecked, as it was obvious from financial crises of 1998 and 2000. Later, US neocons placed stake on a “heavy-handed option" – for which the September 11, 2002 terrorist act was instrumental. After the disaster in Iraq, this option was also unworkable, as the influence of the neocons Ц Bush, Cheney, Wolfowitz Ц was seriously impeded. Eventually, it became obvious that the establishment of the "Western project" arrived to the conclusion that disintegration of the present dollar system into "currency zones" has already started, and that its full-scale salvation is unattainable.

While the zone of the tentative ACU in South-Eastern Asia is definitely out of Washington's and London's control, the euro zone is still controlled. Therefore, the major purpose to day is to prevent decoupling of the euro from the US dollar. This is the essential background of policies, introduced already quite openly for the last six months.

Most obviously, the design of economic strategy reproduces that of the XIX century. The major stake will be made on accelerated development of the US-European (formerly, only American) region under protection from armed forces and by policies of drastic protectionism. This choice is logical, as the resources of the United States alone, under the present rate of economic development, may be insufficient (see, while the aggregate capacities of a larger West (the United States, Canada, Mexico, and Europe) may be enough to afford stability. Definitely, the transition to this economic policy would suggest strong trade barriers for imports from China, other countries of South-Eastern Asia, and Latin America.

This design essentially suggests cease of any emission – meaning that the Federal Reserve of the United States should behave in the same way as the European Central Bank. The level of life of the US population is going to significantly decline.

Still, Europe will face far more serious problems. It will become practically impossible to "feed" new southern and eastern countries of the European Union. The whole system of domestic donations will be devastated with the evaporation of its major source – the US consumer demand, earlier supported by the dollar emission. Therefore, European countries will also experience a sever lack of investments for maintenance of economy and infrastructure. The picture will generally remind rather a version of Great Depression than the XIX century-style accelerated growth. Under these circumstances, the structure of today's EU will collapse Ц also due to present Atlanticist policies of its leaders.

What is going to happen later? Obviously, the anti-Atlanticist factions of European elite are likely to acquire an opportunity of revenge, also favorable for Russia. The major obstacles for Russia's new prospects emerge from the still powerful domestic "fifth column" of the "Western project", while Russia's sovereignty in foreign policy has not restored since the tragedy of 1990s. Russia will be able to use the opening opportunities only in case it liberates itself from the burden of the Western project's influence, choosing to pursue a genuinely independent policy line.

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