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[28/02/2006] EU decisions still cloaked in secrecy

*** EU DECISIONS STILL CLOAKED IN SECRECY

Trumpets blew in Brussels in Decemeber when it was announced that the
Council of Ministers, which makes EU laws, would allow TV cameras in to see
them doing that. They called this opening the Council's law-making function
to "the public".  Now it turns out that the cameras can come in only for
the Council's initial deliberations after the EU Commission, which has the
monopoly of proposing EU laws, has presented its proposal, and the final
actual vote on it. "The debates in between will still be closed to the
public," says the EU Ombudsman in an interview with EUobserver. "The
intermediate steps are the more  delicate ones, where decisions are
hammered out and negotiations take place." Also the December decision only
covers certain EU policies, but not all. So the main EU legislature  will
in practice remain as closed and secret as North Korea's.  It will remain
literally an oligarchy, a committee  of 25 Ministers making laws in secret
for 450 million people,  and irremoveable as a group . . . The total
opposite of real democracy in fact.

_____________

*** THE EU CONSTITUTION: WHAT WOULD HAPPEN IF THE PEOPLE SPOKE?

"If you had referendums in Poland, the UK or Denmark, I'm not sure what
would happen," said Dutch Prime Minister Jan-Peter Balkenende in January,
referring to national referendums on the proposed EU Constitution that were
initially  planned but called off after the French and Dutch peoples voted
No to it last summer.

And how would Ireland have voted in October last in the referendum the
Government had in mind for then if the French had voted Yes?  Would
26-County voters have voted to make themselves real citizens of the EU
State the proposed Constitution would have legally established,instead of
being the notional or honorary EU citizens they are now?  Would they have
voted to give the new EU the Constitution proposed to found the loyalty and
obedience that  all states demand of their citizens and which the
Constitution explicitly refers to?   Would they have voted to make the EU
Constitution supreme over the Irish Constitution by changing the latter so
as to recognise that supremacy?  For that would have been the legal effect
of the constitutional amendment the Government and principal Dail political
parties would all have been urging 26-County voters to vote Yes to.

How would such a step have been reconcileable with "the right of the people
of Ireland to the ownership of Ireland, and to the unfettered control of
Irish destinies",  called for in the 1916 Proclamation which President Mary
McAleese was extolling recently, a right that Proclamation states is
"sovereign and indefeasible"?  "Indefeasible" means a right that cannot be
lost or alienated.

[28/02/2006] EU reappoints failed anti-fraud chief

*** EU REAPPOINTS FAILED ANTI-FRAUD CHIEF

The commissars of the EU Commission have overruled Member States' request
for a new head of the EU's internal anti-fraud agency, OLAF.  The
Commission has re-appointed German citizen Franz-Hermann Bruner, who has
headed OLAF since March 2000, from among 181 candidates for the job.

Bruner has been strongly criticised this past two years for his handling of
the "Tillack case", in which a respected German journalist was arrested and
accused of bribery for uncovering fraud at the EU Commission.  Bruner was
also in charge when leaked OLAF documents said that the agency conducts
"fake investigations," and he has faced criticism for his mishandling of
the major Eurostat fraud scandal.  Under EU rules the Commission has to
consult Member States and the European Parliament on these top
appointments, but the final decision rests in its own hands. Commission
spokesman Johannes Laitenberger argued that OLAF is "a special case,"
exempt from the principle that top Commission officials have to be rotated
every seven years. . . Clearly another case of the Brussels bureaucrats
looking after their own!

[28/02/2006] Napoleon the first Euro-Federalist?

*** NAPOLEON THE FIRST EURO-FEDERALIST?

"We must have a European legal system, a European appeal court, a common
currency, the same weights and measures,  the same laws ...I must make of
all the peoples of Europe one people,and of Paris the capital of the
world."  So said Emperor Napoleon 1 in conversation with his Chief of
Police Joseph Fouché around  1805, as quoted in Chapter 1 of the book
"1812" by Adam Zasmoyski, who gives two sources:Herold 245,243,and Fouché,
II/114,

[28/02/2006] Another Europe is Possible

*** DESIGN FOR A NEW EUROPE

Professor John Gillingham, senior Harvard research scholar, has written a
valuable book, "Design for a new Europe".   In a lecture to launch it
earlier this month he argued that the EU must change fundamentally,
otherwise it "will either drift off into irrelevance, become an obstacle to
desirable change, or at worst, its structural failures could trigger
financial panic."

Professor Gillingham called for an overhaul of the Brussels institutions,
and the return of powers over the CAP and regional funding to Member
States.  He also argues that the EU needs to develop a more flexible
structure, consisting of a minimal number of common policies with all
additional policies operating on an "opt in" basis.

[15/12/2005] ICTU’S David Begg, Morning Ireland and “racist” comments on immigration

Open Letter from Anthony Coughlan

__________________________

TO:

Ms Aine Lawlor
Morning Ireland,
RTE,
Dublin 4

Wednesday, 14 December 2005

Dear Aine Lawlor,

I was amused to hear you interview ICTU's David Begg on "Morning Ireland"
today re the Irish Ferries dispute and to hear him expatiating on what he
termed the problems that arise from merging an Irish labour force of 2
million with an East European labour force of 70 million.

The thought crossed my mind that maybe you would suggest that David Begg
was encouraging "racism" and "racist" sentiment by drawing attention to
such problems.  I remember well your putting this suggestion to me when I
tried to draw attention to exactly this situation in an interview with you
on the same programme at the time of the second Nice Treaty referendum in
2002.

I sought to point out on that occasion that merging a labour market of 2
million with one of 70 million would lead to significant immigration to
Ireland from the poorer countries of Eastern Europe, that this would
inevitably have a downward effect on Irish workers' wage-rates and working
conditions, and would make it difficult to maintain even the minimum wage
rate for many people working here.

During the Nice referendum I also remember David Begg implying that it was
encouraging "racism" to suggest that it would be difficult to maintain
high-quality wage and working conditions in face of significant
immigration, when he and I spoke together at the Magill Summer School in
Donegal.  Mr Begg and such other Yes-side worthies as Proinsias de Rossa
and Minister for Europe Dick Roche produced ludicrously low estimates at
that time of how many workers would come to this country if we were one of
only a handful of EU States to operate an "open door" policy from Day One
of EU enlargement.  See some of their estimates below. They threw insults
about "racism" and "racist" at anyone who questioned their dogmatic
assurance that no serious problems could arise.

The problems arising from Gama, Irish Ferries, the widespread violation of
our minimum wage laws in the construction and some service trades etc., are
occurring  in a context where Ireland has an economic boom and there are
plenty of jobs available.  Can you imagine  how hard it would be to
maintain Irish workers' wages and standards in the event of an economic
downturn?

Being unable to prevent downward pressure on Irish workers' wages and
working conditions due to their uncritical embrace of uncontrolled EU
immigration, David Begg and others will now fall back on seeking to
maintain  the Irish minimum wage level, even though many immigrants are
willing to work for less than that. Trying to maintain different national
minimum wage-levels in a 25-Member EU in which there is total free movement
of labour is a bit like trying to enforce one minimum wage rate in Kerry,
but a different one in Limerick next door, and a different one again in
Tipperary and the other Irish counties. One can attempt it with an army of
Labour Inspectors, but widespread evasion is inevitable.

I can imagine the day will come when some attractive Czech and Polish radio
presenters, as articulate as your good self but willing to work for less
money, will appear on RTE's current affairs programmes as a result of the
station being affected by "the bracing winds of competition"  in the labour
market which David Begg and others have helped let Irish workers in for.

In late 2002 I was present at the National Forum in Europe in Dublin Castle
when David Begg told those present that he supported the proposed EU
Constitution. This was before that Constitution had even been signed and
when its final provisions were not yet publicly known.  Mr Begg's
commitment of support was given without any policy discussion on the matter
in  ICTU's affiliated trade unions. If the French had voted Yes to the EU
Constitution last summer and we had had the referendum on it that was
planned for here in October, one can be confident that Mr Begg would have
been urging Irish workers to vote for it, with much fatuous talk about the
"European social model", only for them to regret bitterly doing that later
when it was too late.

I am sending copies of this letter for their information to David Begg,
Cathal Goan, the producer of "Morning Ireland"  and various other trade
union and media people who will remember the shameful way some elements of
the Yes-side behaved  in discussing migration during the 2002 Nice Treaty
referendum.

Yours sincerely

Anthony Coughlan
Secretary

P.S. In today's "Irish Independent"(p.14) economics correspondent Brendan
Keenan, writing under the heading "Amazing immigration flow poses
challenge",  states that 66,000 foreigners applied for Personal Public
Service Numbers to work in this State between May and October this year, an
average of 11,000 per month, nearly all of them citizens of the new EU
States.

_______

QUOTES ON EAST EUROPEAN IMMIGRATION FROM THE 2002 NICE TREATY REFERENDUM:

" There is no reason to believe ... that large numbers of workers will
wish to come" [Minister for Europe Dick Roche, I.T. Letters,  12/7/2002 ]

_______

"Mr. X also repeats the line propagated by the No to Nice campaign that
only four countries are to permit immigration after enlargement. This
statement grossly misrepresents the position of the other member states."
[Dick Roche,   I.T.Letters, Aug/Sept. 2002]

_______

"Ireland will be in precisely the same position as all other member states
on the question of free movement following any enlargement of the
Community." [Dick Roche, as reported in the Irish Times, September 2002)

__________

"It is the view of the Irish Government and a number of other governments
that this idea that there is going to be a huge influx of immigrants is
just  not supported. The evidence is just not there for it. They are not
going to  flood to the west. The same rules are going to apply in all 15
states. There  is no evidence to suggest that the people of the Czech
Republic or Poland  are less anxious to stay in their home as (sic) we are.
[ Dick Roche, transcript of interview with The Irish Catholic, 19/9/2002.]

___________

" It is a deliberate misrepresentation to suggest that tens of thousands
will suddenly descend en masse on Ireland." [Proinsias De Rossa, I.T.
Letters,  20/8/2002 ]

____________

" The expected trickle of immigration to Ireland will on balance benefit the
Irish economy." [P. De Rossa, I.T. Letters,20/8/2002

___________

" I estimate that fewer than 2,000 will choose our distant shores each
year."   [P.De Rossa, I.T. Letters, 20/8/2002 ]

____________

"There is no evidence there would be a problem with free movement of
workers on accession." [Taoiseach Bertie Ahern, Dail Eireann,10/9/2002 ]

____________

"Efforts have been made to foment fears that migrants from the new member
states could flock to Ireland. This is not only unpleasant but plainly
wrong." [Brian Cowen, Sunday Business Post, 7/7/2002 ]

____________

"Ireland is already benefiting from the skills and energy of workers from
the applicant states, about 7,000 of whom  received work permits last year.
There is no basis whatever for expecting a huge upsurge  in these numbers."
[Brian Cowen, Sunday Business Post, 7/7/2002 ]

-------------------

" The second myth is that the Nice Treaty will mean mass immigration from
the new EU member countries in Eastern Europe. This is probably the most
odious of the myths propagated by some in the "No" campaign." [Minister
Willie O'Dea, Sunday Independent,Summer 2002]

___________

[11/12/2005] The power of the EU over our lives

COPY OF ARTICLE FROM "VILLAGE MAGAZINE", 8 December 2005
_____________

AN EU "WATERSHED DECISION"

The power of the EU over our lives has been dramatically extended by a
recent judgement of the European Court of Justice (ECJ) in Luxembourg that
has got remarkably little  attention in Ireland.

In September the Court ruled that the EU had the right to create
pan-European criminal offences for breaches of EU law, which Member States
would have to implement even if they are opposed to such criminal
sanctions.

This ECJ judgement opens the door to the creation of a body of
supranational EU criminal law for the first time. This had been proposed in
the EU Constitution which the French and Dutch rejected last summer, but
the September judgement brings it into being anyway. It signals a major
shift of power from national capitals to the EU.

For the first time in legal history this judgement permits the EU rather
than its Member States to lay down sanctions such as prison sentences and
fines for citizens violating EU laws. As a consequence Member States lose
their exclusive power to decide what constitutes a crime, and when their
citizens may be fined, imprisoned or given criminal records. Member States
are thereby deprived of one of the classical prerogatives  of all
independent sovereign States.

"This is a watershed decision," said Commission President Manuel Barroso in
greeting the ECJ judgement. The Commission lost no time in jumping in with
a document on 23 November that listed seven areas which it said should
become EU crimes immediately: private sector corruption, credit card and
cheque fraud, counterfeiting euro notes and coins, money laundering, people
trafficking, computer crime and marine pollution.

The Commission suggested that possible future EU crimes could be be
corruption in awarding public contracts, racial discrimination and
incitement,intellectual property theft and trafficking in human organs and
tissues. Legal commentators  have suggested that financial services,
consumer protection law, health and safety rules for factories and offices,
the CAP,fisheries policy, transport and trademarks could become further
fields of application for EU crimes and penalties in time and require
significant  harmonization of national  criminal codes in these areas.

At present it is up to Member States to decide whether to use criminal
sanctions to enforce EU laws or not, and what those sanctions should be.
Thus Ireland decides that if fishermen violate  EU fisheries laws they may
be fined, have nets confiscated and so on. The ECJ judgement permits the EU
to decide what will be EU crimes in future, and how Irish and other
citizens should be punished for committing them.

It is surely remarkable that 50 years after the Treaty of Rome the Court of
Justice should claim such a power for the EU.  Although the ECJ judgement
related to environmental matters, it means that the EU can in principle
attach supranational criminal penalties henceforth to breaches of EU law
going back to the original Treaty of  Rome, so long as the Commission
proposes and the Council of Ministers agrees by majority vote that cross-EU
criminal penalties are necessary and should apply.

The ECJ judgement was given in a dispute between the Commission, supported
by the European Parliament, and the Council of Ministers as regards their
respective powers.  The Commission contended that it could propose criminal
sanctions for breaches of EU law and have them agreed by majority Council
vote. The majority of the "old Europe" 15 on the Council of Ministers,
including the Irish Government, contended that imposing criminal sanctions
for breaches of EU law required unanimity,so that each Member State
retained a veto. Eoin Fitzsimons SC represented Ireland in the case.

The Court came down on the Commission's and Parliament's side, as it
generally does as regards anything that expands EU powers. One of the ECJ's
own judges, Pastorino, once characterised the ECJ as a "court with a
mission" -  that mission being to  increase the powers of the EU to the
utmost by means of its interpretation of the European treaties.

The Commission, Court and Parliament share this common aim, for all
increases in EU power increase the powers of these supranational
institutions and the power of the judges, bureaucrats and MEPs that compose
them.  The EU Member States, their governments, parliaments and citizens
lose power correspondingly.

Henceforth a Member State that opposes a breach of a particular EU law
being made into a crime, or opposes the level of EU penalty attached, will
still have to introduce it if a sufficient number of other EU States vote
for it.   In principle the new legal  position would allow the EU to compel
Ireland to jail or fine its citizens for doing things that the Irish
Government and Oireachtas did not consider a crime - improbable though that
may seem at present.

Commission officials are reported as saying that in future they will draft
tests to decide if offences against EU laws are civil, administrative  or
criminal.

In this way 25 non-elected EU judges, together with the 25 non-elected EU
Commissioners, have  increased their power over all of us in what amounts
to a judicial coup d'etat against democratic national governments and the
citizens that elect them.

[25/09/2005] What leading EU politicians actually say…

BUILDING THE EU SUPERSTATE: WHAT LEADING EU POLITICIANS SAY ABOUT IT

(The quotations below are in chronological order backwards)

"In the foreseeable future, we will not have a constitution. That's
obvious.  I haven't come across any magic formula that would bring it back
to life. Instead of never-ending debates about institutions, let's work
with what we've got. Political will and leadership are more important than
institutions."

- EU Commission President Jose Manuel Barroso, Rzeczpospolita, Warsaw;
Irish Times, 2 September 2005

_________

"We know our electorate, and if we ask them again we will get the same
reply. We will have to reassess the situation in 2006. At the moment I
cannot see anyone wishing or asking for a second vote."

- French Minister for European Affairs Catherine Colonna, Irish Times, 13
September 2005

_________

"After Nice the forces of political Europe joined others in stoking the
fire. The Commission, the Parliament, the federalists, French proponents of
integration, the media, all found Nice too 'intergovernmental'. Together,
they imposed the idea that Nice was a disaster, that we urgently needed a
new treaty. Soon a 'new treaty'  wasn't enough. It had to be a
'Constitution', and little did it matter that it was legally inappropriate.
When the time came, the result had to be ratified. What tiny national
parliament, what people, would then dare to stand in the way of this new
meaning of history? The results of the Convention, at first deemed
insufficient by maximalists, became the holy word when it was realised that
selfish governments might water it down.

At every stage of this craze, from 1996 until 2005, a more reasonable
choice could have been made, a calmer rhythm could have been adopted, that
would not have deepened the gap between the elites and the population, that
would have better consolidated the real Europe and spared us the present
crisis. But in saying this, I understimate the religious fervour that has
seized the European project. For all those who believed in the various
ideologies  of the second half of the 20th century, but survived their
ruin, the rush into European integration became a substitute ideology.

They planned urgently to end the nation state.  Everything outside this
objective was heresy and had to be fought. This was in the spirit of Jean
Monnet, the rejection of self and of history, of all common sense.
'European power' was a variation, the code name for a counterweight to
America that excited France alone for years and towards which the
'Constitution' was supposed to offer a magical shortcut. And let us not
forget the periodic French incantations for a Franco-German union.

As the train sped on, these two groups, instead of braking the convoy, kept
stoking the locomotive, some to enlarge and others to integrate, deaf to
the complaints coming from the carriages. Since we had to ask for
confirmation from time to time, the recalcitrant peoples were told they had
no choice, that it was for their own good, that all rejection or delay
would be a sign of egotism, sovereignty, turning inward, hatred of others,
xenophobia, even Le Penism or fascism. But it didn't work. The passengers
unhooked the carriagesŠ"

- Hubert Vedrine, French Foreign Minister 1999-2005, Irish Times, 8 August
2005

____________

"I want to believe obstinately that neither the French nor the Dutch have
rejected the constitutional treaty. A lot of the questions in the French
and Dutch debates find answers in the constitution. But the voters - and
this is why we need this period of explanation and debate - did not realise
that the text of the  constitutional treaty, the nature of the
constitutional treaty, aimed to respond to numerous concerns."

- Jean-Claude Juncker, Luxembourg Premier and holder of the EU presidency,
International Herald Tribune, 18-19 June 2005

__________

"Some people have wanted to bury the Constitution before it's even dead. I
am opposed to this, because burying the Constitution would mean burying the
idea of what's behind the Constitution, which is political union."

- Guy Verhofstadt, Belgian Prime Minuster, Agence Europe News Bulletin, 17
June 2005

__________

"It was a mistake to send out the entire three-part, 448-article document
to every French voter, said Mr Giscard. Over the phone he had warned Mr
Chirac in March: 'I said, "Don't do it, don't do it. It is not possible for
anyone to understand the full text.'"

- V.Giscard d'Estaing, interview in The New York Times, quoted in
Euobserver, 15 June 2005

___________

"The agenda must and will continue. Globalization is not something China
imposed on us, but something we have done ourselves.  People must be told
that globalization is our policy. . . I see a clear danger when people are
saying less Europe is better. More integration is not the problem, it is
the solution."

- EU Commission Vice-President Günter Verheugen, International Herald
Tribune, 8 June 2005

__________

"The Constitution is the capstone of a European Federal State"

- Guy Verhofstadt, Belgian Prime Minister, Financial Times, 21 June 2004

__________

"This (drafting an EU Constitution) is what you have to do if you want the
people to build statues of you on horseback in the villages you all come
from."

- V.Giscard d'Estaing, Financial Times, 21 June 2004

__________

"We know that nine out of 10 people will not have read the Constitution and
will vote on the basis of what politicians and journalists say. More than
that, if the answer is No, the vote will probably have to be done again,
because it absolutely has to be Yes."

- Jean-Luc Dehaene, Former Belgian Prime Minister and Vice-President of the
EU Convention, Irish Times, 2 June 2004

_____________

"You cannot ask the citizens to ratify the Treaty of Nice and then say to
them that what they have ratified no longer counts for anything before it
has even come into force.  How could we then ask them to believe in what we
are doing?

- Spanish Prime Minister Jose Maria Aznar, Le Monde, 8 March 2004

_____________

"The Convention brought together a self-selected group of the European
political elite, many of whom have their eyes on a career at a European
level, which is dependent on more and more integration and who see national
governments and parliaments as an obstacle. Not once in the sixteen months
I spent on the Convention did representatives question whether deeper
integration is what the people of Europe want, whether it serves their best
interests or whether it provides the best basis for a sustainable structure
for an expanding Union. The debates focused solely on where we could do
more at European Union level. None of the existing policies were
questioned."

-  Gisela Stuart MP, The Making of Europe's Constitution, Fabian Society,
London, 2003.

__________

"From a Chinese, Indian or  American perspective, the individual countries
of our continent grow indistinct and merge. What people see increasingly is
Europe as a whole.  Just cast your mind beyond our narrow temporal limits:
in the eyes of  history, the integration of the whole continent is our
nation-states' only  chance of survival."

- Romano Prodi, President of the EU Commission, European Parliament, 16
December 2003

____________

"An enlarged Union based on Nice is not in the interest of any Member State
Š This is not a threat. This is a messenger delivering news."

- German Foreign Minister Joschka Fischer, Irish Times, 14 November 2003

__________

"We've got to be explicit that the road to greater economic success does
not lie in this cosy assumption that you can move from a single market
through a single currency to harmonising all your taxes and then having a
federal fiscal policy and then effectively having a federal state."

-  Gordon Brown, British Chancellor of the Exchequer, The Guardian, 5
November 2003

__________

"There is no Europe without European defence and there is no European
defence without Britain."

-   French Foreign Minister Dominique de Villepin, Financial Times, 16
October 2003

___________

"This is crossing the Rubicon, after which there will be no more sovereign
states in Europe with fully-fledged governments and parliaments which
represent legitimate interests of their citizens, but only one State will
remain. Basic things will be decided  by a remote 'federal government' in
Brussels and, for example, Czech citizens will be  only a tiny particle
whose voice and influence will be almost zero Š We are against a European
superstate."

-  Czech President Vaclav Klaus, Mlada Fronta Dnes,  29-9-2003

_________

"We are 5 per cent from a real European federal state and claims about the
independence of countries will have a more and more hollow ring. I am not
sure the citizens are in any way aware of what is going on. All the changes
are duly labelled in calming phrases."

- Torben Lund MEP, leader of Danish Social Democrats in the European
Parliament and former government minister, Politiken,  12 August 2003

_________

"Defence Europe is an essential dimension of Europe. Without it, the voice
of the European nations won't be heard in the international arena.  Without
the requisite capabilities for military action, Europe will remain impotent
or dependent."

- French President Jacques Chirac, speech at Creil, 30 September 2002

__________

"We need to develop the instinct of acting together. The first reflex is
still national."

-  M.Valery Giscard d'Estaing, President of the EU Convention, The
Guardian. London, 13 September 2002

_________

"If we were to reach agreement on this point (i.e. a consensus proposal
from the EU Convention), we would thus open the way towards a constitution
for Europe. To avoid any disagreement over semantics, let us agree now to
call it 'a constitutional treaty for Europe.'"

-  M.Valery Giscard d'Estaing, President of the EU Convention, Irish Times,
1 March 2002

_________

"When we build the euro - and with what a success - when we advance on the
European defence, with difficulties but with considerable progress, when we
build a European arrest-warrant, when we move towards creating a European
prosecutor, we are building something deeply federal, or a true union of
states Š The Charter of Fundamental Rights of the European Union must
become a charter of rights that is applicable and effective Š I wish this
Constitution to be the Constitution of a rebuilt Union, able to reflect its
social cohesion, deepen its political unity, express its power externally."

- M.Pierre Moscovici, French Minister for Europe, Le Monde,28 February 2002

__________

"European monetary union has to be complemented by a political union - that
was always the presumption of Europeans including those who made active
politics before us ŠWhat we need to Europeanise is everything to do with
economic and financial policy. In this area we need much more, let's call
it co-ordination and  co-operation to suit British feelings, than we had
before. That hangs together with the success of the euro."

- German Chancellor Gerhard Schröder, The Times, London, 22 February 2002

__________

"Defence is the hard core of sovereignty. Now we have a single currency,
then why should we not have a common defence one day?"

-  Spanish Defence Minister Federico Trillo, European Parliament Committee
on Foreign Affairs, 19 February 2002

__________

"The EU ought to develop into a great power in order that it may function
as a fully fledged actor in the world."

- Paavo Lipponen, Prime Minister of Finland, London, 14 February 2002

__________

"It (the introduction of the euro) is not economic at all. It is a
completely political step Š The historical significance of the euro is to
constuct a bipolar economy in the world. The two poles are the dollar and
the euro. This is the political meaning of the single European currency.
It is a step beyond which there will be others. The euro is just an
antipasto."

-  Commission President Romano Prodi, interview on CNN, 1 January 2002

__________

"The currency union will fall apart if we don't follow through with the
consequences of such a union. I am convinced we will need a common tax
system."

-  German Finance Minister Hans Eichel, The Sunday Times, London, 23
December 2001

__________

"The European constitution that Germany and France wish for will be an
essential step in the historic process of European integration."

- Joint statement of French President Jacques Chirac and German Chancellor
Gerhard Schröder, Nantes, 23 November 2001

___________

"Let us act in such a way that it (an EU Constitution) becomes a reality in
2004 Š Such a text would unite the Europeans by enabling them, through
their solemn approval, to identify with a project Š What can we do so that
Europe carries greater weight  on the international stage? Š Now we must
define, without timidity, the areas where we want to go towards more
Europe, within the framework desired by France, of a Federation of Nation
States."

-  French President Jacques Chirac, address to French Ambassadors, 27
August 2001

___________

"It (the EU) is one of the few institutions we can develop as a balance to
US world domination."

- Swedish Prime Minister Goran Persson in Gothenburg, New York Times, 15
June 2001

__________

"We need a European Constitution.  The European Constitution is not the
'final touch' of the European structure; it must become its foundation.
The European Constitution should prescribe that Š we are building a
Federation of Nation-States Š The first part should be based on the Charter
of Fundamental Rights proclaimed at the European summit at Nice Š If we
transform the EU into a Federation of Nation-States, we will enhance the
democratic legitimacy Š We should not prescribe what the EU should never be
allowed to do Š I believe that the Parliament and the Council of Ministers
should be developed into a genuine bicameral parliament."

- Dr Johannes Rau, President of the Federal Republic of Germany, European
Parliament,   4 April 2001

__________

"Are we all clear that we want to build something that can aspire to be a
world power? In other words, not just a trading bloc but a political
entity. Do we realise that our nation states, taken individually, would
find it far more difficult to assert their existence and their identity on
the world stage."

- Commission President Romano Prodi, European Parliament, 13 February 2001

___________

"Thanks to the euro, our pockets will soon hold solid evidence of a
European identity. We need to build on this, and make the euro more than a
currency and Europe more than a territory Š In the next six months, we will
talk a lot about political union, and rightly so. Political union is
inseparable from economic union. Stronger growth and European integration
are related issues. In both areas we will take concrete steps forward."

- French Finance Minister Laurent Fabius, Financial Times, London, 24 July 2000

___________

"One must act 'as if' in Europe: as if one wanted only very few things, in
order to obtain a great deal. As if nations were to remain sovereign, in
order to convince them to surrender their sovereignty. The Commission in
Brussels, for example, must act as if it were a technical organism, in
order to operate like a government ... and so on, camouflaging and toning
down. The sovereignty lost at national level does not pass to any new
subject. It is entrusted to a faceless entity: NATO, the UN and eventually
the EU. The Union is the vanguard of this changing world:it indicates a
future of Princes without sovereignty. The new entity is faceless and those
who are in command can neither be pinned down nor elected ... That is the
way Europe was made too: by creating communitarian organisms without giving
the organisms presided over by national governments the impression that
they were being subjected to a higher power. That is how the Court of
Justice as a supra-national organ was born. It was a sort of unseen atom
bomb, which Schuman and Monnet slipped into the negotiations on the Coal
and Steel Community. That was what the 'CSC' itself was: a random mixture
of national egotisms which became communitarian.  I don't think it is a
good idea to replace this slow and effective method - which keeps national
States free from anxiety while they are being stripped of power - with
great institutional leaps Š Therefore I prefer to go slowly, to crumble
pieces of sovereignty up litle by little, avoiding brusque transitions from
national to federal power. That is the way I think we will have to build
Europe's common policies..."

- Italian Prime Minister Giuliano Amato, later Vice-President of the EU
Constitutional Convention, interview with Barbara Spinelli, La Stampa, 13
July 2000

_____________

"We already have a federation. The 11, soon to be 12, member States
adopting the euro have already given up part of their sovereignty, monetary
sovereignty,and formed a monetary union, and that is the first step towards
a federation."

- German Foreign Minister Joschka Fischer, Financial Times, 7 July 2000,

___________

"We will have to create an avant-garde Š We could have a Union for the
enlarged Europe, and a Federation for the avant-garde."

- Former EU Commission President Jacques Delors, Liberation, 17 June 2000

__________

"The last step will then be the completion of integration in a European
Federation Š such a group of States would conclude a new European framework
treaty, the nucleus of a constitution of the Federation. On the basis of
this treaty, the Federation would develop its own institutions, establish a
government which, within the EU, should speak with one voice Š a strong
parliament and a directly elected president. Such a driving force would
have to be the avant-garde, the driving force for the completion of
political integration Š This latest stage of European Union Š will depend
decisively on France and Germany."

- German Foreign Minister Joschka Fischer, speech at Humboldt University,
Berlin, 12 May 2000

___________

"To promote the process of European integration, we must improve an
institutional mechanism already existing in the European Union, reinforced
co-operation, by making it more flexible and effective. This approach
allows a few states to move faster and further Š We are all aware that this
mechanism is vital."

- French Prime Minister Lionel Jospin, French National  Asssembly, 9 May 2000

__________

"Common responsibility for the European currency will also engender a
common decision-making instance for the European economy. It is unthinkable
to have a European central bank but not a common leadership for the
European economy. If there is no counterweight to the ECB in European
economy policy, then we will be left with the incomplete construction which
we have today Š However even if the building is not finished it is still
true that monetary union is part of a supranational constitution Š It is
our task for the future to work with the appropriate means for the transfer
of traditional elements of national sovereignty to the European level."

- Italian President Carlo Ciampi, Frankfurter Allgemeine Zeitung,8 Feb.2000

___________

"If you don't want to call it a European army, don't call it a European
army. You can call it 'Margaret', you can call it 'Mary-Anne', you can find
any name, but it is a joint effort for peace-keeping missions - the first
time you have a joint, not bilateral, effort at European level."

- EU Commission President Romano Prodi, The Independent, London, 4 Feb.2000

____________

"We must now face the difficult task of moving towards a single economy, a
single political entitY Š For the first time since the fall of the Roman
Empire we have the opportunity to unite Europe."

- EU Commission President Romano Prodi, European Parliament, 13 April 1999

__________

"It is only natural that the eastern part of the continent will become our
preoccupation for years to come, because Germans see this as  a matter of
historical destiny. The most fundamental priority we have is trying to
integrate all of Europe. But for France the underlying issue is all about
coming to terms with its loss of influence in the world."

- Herr Immo Stabreit, former German Ambassador to France, International
Herald Tribune, 11-12 September 1999

__________

"The euro was not just a bankers' decision or a technical decision. It was
a decision which completely changed the nature of the nation states. The
pillars of the nation state are the sword and the currency, and we changed
that. The euro decision changed the concept of the nation state and we have
to go beyond that."

- EU Commission President Romano Prodi, Financial Times interview, 9 April 1999

____________

"The introduction of the euro is probably the most important integrating
step since the beginning of the unification process. It is certain that the
times of individual national efforts regarding employment policies, social
and tax policies are definitely over. This will require to finally bury
some erroneous ideas of national sovereignty Š I am convinced our  standing
in the world regarding foreign trade and international finance policies
will sooner or later force a Common Foreign and Security Polic worthy of
its name Š National sovereignty in foreign and security policy will soon
prove itself to be a product of the imagination."

-  German Chancellor Gerhard Schröder on 'New Foundations for European
Integration', The Hague, 19 Jan.1999

____________

"Our future begins on January 1 1999. The euro is Europe's key to the 21st
century. The era of solo national fiscal and economic policy is over."

-  German Chancellor Gerhard Schröder, 31 December 1998

___________

"The euro is a sickly premature infant, the result of an over-hasty
monetary union."

- German Opposition leader Gerhard Schröder, March 1998

___________

"The euro is far more than a medium of exchange Š It is part of the
identity of a people. It reflects what they have in common now and in the
future."

- European Central Bank Governor Wim Duisenberg, December 31 1998

___________

"Transforming the European Union into a single State with one army, one
constitution and one foreign policy is the critical challenge of the age,
German Foreign Minister Joschka Fischer said yesterday."

- The Guardian, London, 26 November 1998

____________

"The single currency is the greatest abandonment of sovereignty since the
foundation of the European Community Š It is a decision of an essentially
political character Š We need this united Europe Š We must never forget
that the euro is an instrument for this project."

- Spanish Prime Minister Felipe Gonzalez, May 1998

__________

"Federalism might make eurosceptics laugh but, with the creation of the
euro,the halfway stage would be reached. Four key organisms would have a
federal or quasi-federal status: the Central Bank, the Court of Justice,
the Commission and the Parliament. Only one institution is missing: a
federal government."

- M.Jacques Lang,  Foreign Affairs Spokesman, French National Assembly, The
Guardian, London, 22 July 1997

____________

"As a monetary union represents a lasting commitment to integration which
encroaches on the core area of national sovereignty, the EMU participants
must also be prepared to take further steps towards a more comprehensive
political union."

- Annual Report of the German Bundesbank, 1995
___________

"In Maastricht we laid the foundation-stone for the completion of the
European Union. The European Union Treaty introduces a new and decisive
stage in the process of European union, which within a few years will lead
to the creation of what the founding fathers dreamed of after the last war:
the United States of Europe."

- German Chancellor Helmut Kohl, April 1992

___________

"There is no example in history of a lasting monetary union that was not
linked to one State."

- 0tmar Issing, Chief Economist, German Bundesbank, 1991

___________

"A European currency will lead to member-nations transferring their
sovereignty over financial and wage policies as well as in monetary affairs
Š It is an illusion to think that States can hold on to their autonomy over
taxation policies."
- Bundesbank President Hans Tietmeyer, 1991

___________

"We argue about fish, about potatoes, about milk, on the periphery. But
what is Europe really for? Because the countries of Europe, none of them
anything but second-rate powers by themselves, can, if they get together,
be a power in the world, an economic power, a power in foreign policy, a
power in defence equal to either of the superpowers. We are in the position
of the Greek city states: they fought one another and they fell victim to
Alexander the Great and then to the Romans. Europe united could still, by
not haggling about the size of lorries but by having a single foreign
policy, a single defence policy and a single economic policy, be equal to
the great superpowers."

- Prime Minister Harold Macmillan, who initiated the UK's application to
join the EEC, The Listener, London, 8 Feb.1979

____________

"On the basis of repeated meetings with him and of an attentive observation
of his actions, I think that if in his own way W.Hallstein (ed: first
President of the European Commission) is a sincere 'European', this is only
because he is first of all an ambitious German. For the Europe that he
would like to see would contain a framework within which his country could
find once again and without cost the respectability and equality of rights
that Hitler's frenzy and defeat caused it to lose; then acquire the
overwhelming weight that will follow from its economic capacity; and,
finally, achieve a situation in which its quarrels concerning its
boundaries and its unification will be assumed by a powerful coalition."

- President Charles de Gaulle, Memoirs of Hope, 1970
____________

"The fusion (of economic functions) would compel nations to fuse their
sovereignty into that of a single European State."

- Jean Monnet, founder of the European Movement, 3 April 1952

____________

"The pooling of coal and steel production should immediately provide for
the setting up of common foundations for economic development as a first
step in the federation of Europe."

- Robert Schuman, Declaration on the European Coal and Steel Community,
Europe  Day, 9 May 1950

_____________

"Who controls the currency, controls the country."

- John Maynard Keynes, 1932
______________

"I have always found the word 'Europe' on the lips of those who wanted
something from others that they dared not demand in their own names."

- German Chancellor Otto von Bismarck,Gedenken und Erinnerungen, 1890

[14/09/2005] Ireland loses; EU wins power to jail Irish Citizens

EU WINS POWER TO JAIL IRISH CITIZENS ... IRELAND LOSES IMPORTANT CASE IN EU
COURT

(Sent to you for your information by Anthony Coughlan, The National
Platform EU Research and Information Centre,Dublin  ...  Please forward to
your friends and acquaintances who may be interested in or concerned about
this)

Wednesday 14 September 2005

The EU has been given the power to compel Irish courts to fine or imprison
people for breaking EU laws, even if the Irish Government and Dail Eireann
are opposed.

An unprecedented ruling yesterday by the EU Court of Justice in Luxembourg
gives Brussels the power to introduce harmonised criminal law across the EU,
creating for the first time a body of European criminal law that all Member
States must adopt.

The judgment by the EU supreme court was opposed by 11 EU Governments
including Ireland. In principle the judgement gives the EU the power to
impose criminal sanctions for all breaches of EU law. It greatly extends
the power of the non-elected Brussels Commission, which would have the
exclusive right to propose such criminal sanctions, to be adopted by
majority vote of the Council of Ministers.

Traditionally the EU Court of Justice (ECJ) works hand in glove with the
Commission, as both are supranational institutions that benefit from
increasing supranational powers. In the words of one of its judges,the ECJ
is a "court with a mission" -  that mission being to extend the
supranational powers of the EU and its institutions to the utmost. The
Commission's press release of yesterday welcoming the Court ruling may be
read at  http://www.statewatch.org/news/2005/sep/ecj-environment-dec.pdf

Yesterday's  ruling was given in a test  case about environmental law, an
issue which  may make it acceptable to some people who fail to appreciate
its constitutional and political implications. The judgement is a legal
landmark that sets an important precedent. It gives the Commission the
right to decide when breaches of EU laws are so serious that they should be
treated as criminal.

The Member States who lost the court-case were seeking to guard their
sovereignty over criminal law. The Commission took them to court after they
blocked it from introducing harmonised criminal law for pollution. The
Court of Justice ruled in the Commission's favour, concluding: "The
European Community has the power to require the member states to lay down
criminal penalties for the purposes of protecting the environment."

Yesterday's judgement upheld the EU Commission's challenge to the Council
of Ministers' "Framework Decision on the Protection of the Environment
through Criminal Law". The Council of Ministers  contended in the case
that,as EU law currently stands, Member States cannot be forced to impose
criminal penalties in respect of conduct covered by the Framework Decision.
Ireland and the 10 other Member States that suppoorted the Council of
Ministers position contended that not only is there no express conferral of
power on the EU  to impose criminal sanctions  under the European treaties,
but, "given the considerable significance of criminal law for the
sovereignty of the Member States, there are no grounds for accepting that
that power can have been implicitly transferred to the Community at a time
when specific subnstantive pwoers,such as those pertaining to the
environment, were conferred on it."

The Commission disputed this view and yesterday's judgement came down
decisively on the Commission's side.

The judgement effectively means that when Member States transferred powers
to the EU, the Court of Justice has now decided that they implicitly gave
the EU power to impose EU criminal sanctions for breaches of EU law.

EU Member States  have always insisted that the power to set criminal law
goes to the heart of national sovereignty and must be decided by national
Governments and Parliaments. The judgement of the Luxembourg judges means,
however, that national governments can no longer exempt EU law from being
upheld by criminal sanctions.

When Irish people agreed in successive referendums to transfer powers to
Brussels, the politicians who supported this never told them  that they
could be found to be in breach of EU criminal law for disobedience!

The Commission says that it would use its new powers only in extreme
circumstances, but its officials are already talking about introducing EU
crimes for overfishing, deliberate polluting, money laundering, price
fixing and the vast legal territory of the EU internal market.

José Manuel Barroso, the President of the Commission, welcomed yesterday's
ruling: "This is a watershed decision. It paves the way for more democratic
and more efficient lawmaking at EU level."

In reality it opens the way to criminal laws over a vast policy territory
being rewritten at EU level,and a harmonised EU criminal code, which was
prefigured in the proposed EU Constitution that was rejected by French and
Dutch voters this summer.

The Court said that although as a general rule criminal law does not fall
within EU powers, that "does not prevent the Community legislature ... from
taking measures that relate to the criminal law of member states which it
considers necessary".

The ruling means that the Commission can propose an EU crime that, if
passed by the European Parliament and a qualified majority of Member
States, must be adopted by all Member States even though a particular
Government and Parliament may be against it.  This means that Ireland can
be forced to introduce a crime into its law if enough other EU States
support it. It also gives the Commission the power to compel members to
enforce EU criminal law if governments drag their heels or if their courts
refuse to sentence people.

The ruling was welcomed by most MEPs, who will now have the powers to pass
criminal law and not just civil law.

The EU Council of Ministers which lost this case yesterday, was supported
in the proceedings by Ireland, Denmark, Finland, Sweden, the Netherlands,
Germany,  France,the UK, Spain, Portugal and Greece

====================AND ===========
Some excerpts from today's UK press reports on this judgement
==================================

THE GUARDIAN, Wednesday 14 September 2005

Brussels wins right to force EU countries to jail polluters

Nicholas Watt, European editor

Brussels was given greater powers over the EU's 25 members yesterday, when
the European court of justice declared that the union's rules can be
enforced through criminal sanctions . . .

The court delivered its ruling after a disagreement between the commission
and the council of ministers over the punishment of polluters. Both sides
agreed that polluters should face criminal penalties, but they disagreed on
how these should be enforced: European ministers argued that under the
"Third Pillar" of the Maastricht treaty, the matter should be left in the
hands of governments who would have the power of veto.

The commission argued that it should be enforced through the "First Pillar",
also known as the "Community Pillar". This waters down the power of member
states by involving all three of the EU centres of power - the commission,
the council of ministers, and the European parliament. Countries also lose
their national veto. This view was endorsed by the Luxembourg-based court.

The ruling means the commission would have the right to tell EU countries to
impose criminal penalties on polluters. This would be carried out in
national courts, although the commission would like to extend its powers by
recommending the level of punishment.

Michel Petite, head of the European commission's legal service, said: "I
suppose that for a directive to be complied with, we might want to to say it
has to be a criminal penalty, we may want to say it has at least to be at
this level. That could be viewed as a necessary condition for the directive
to be complied with properly. But that was not contemplated in the ruling."

British government sources indicated that the result of the court's ruling
will be deadlock, with no criminal charges being brought against polluters
at a European-wide level. EU countries originally voted in favour of the
original plan to allow governments to decide the matter by 11 votes out of
15 in 2003.

"There was such a strong vote because of the principle that this should be
decided by member states. That point of principle has not changed, so there
will be deadlock," one source said.

But pro-Europeans welcomed the European court of justice's ruling. Chris
Davies, the Liberal Democrat leader in the European Parliament, said:
"Europe needs an umpire to ensure fair play between member states and to
dismiss the cheats. The commission is the only body that comes close to
fitting that role and this court ruling gives it more teeth with which to
bite."

============================AND ====================

THE INDEPENDENT, London,  Wednesday 14 September 2005

Europe may impose criminal penalties for breaching EU law

By Stephen Castle in Brussels

. . .  the head of the Commission's legal service, Michel Petite, hinted that
in future the Commission might not only push member states to apply criminal
sanctions, but also to set the scale of sanctions. The Commission said the
ruling applied to areas where it enjoys competence, including internal
market measures, environmental protection, data protection, defence of
intellectual property and monetary matters. . .

=======================AND====================

THE DAILY TELEGRAPH,  Wednesday 14 September 2005

Criminal sanctions to enforce EU law

By Andrew Sparrow, Political Correspondent

European commissioners yesterday hailed a landmark legal judgment that could
give them the power to use criminal sanctions to enforce EU law.

José Manuel Barroso, the commission president, claimed that the European
Court of Justice had made a "watershed decision" that would lead to "more
democratic and more efficient lawmaking at EU level".

Eurosceptics said the decision showed that national governments were losing
power to determine their own laws. . .

The ECJ decision is hugely sensitive because until now the EU has only been
able to use the criminal law to enforce its decisions in certain categories
where all member states agree legislation by unanimity. In theory, qualified
majority voting - which allows EU law to be made against the wishes of a
minority of member states - could now be used to take decisions that would
have to be enforced throughout the EU by criminal sanctions.

The ECJ issued its ruling following a power struggle between the commission,
the EU's unelected bureaucracy, and member states.

Two years ago, member states created a new law on environmental pollution,
involving minimum EU-wide penalties for serious offenders, using the
unanimity decision-making procedures set out in the so-called "third pillar"
of the EU's treaty provisions.

But the commission took the member states to court because they believed
criminal sanctions should be available to enforce laws.

Yesterday, the commission claimed that the court decision set an "important
precedent" because it would allow "the commission to continue to enhance its
efforts to ensure compliance with the provisions of European Community law
also by means of criminal law".

The internal market, environmental protection, data protection, protection
of intellectual property and monetary matters were all named by the
commission as areas where EU law could be backed up by criminal sanctions. . .

[24/08/2005] What about the truckers?

HOW ABOUT THE TRUCK DRIVERS?

by Dr Richard North from EU REFERENDUM  blog, 22 August 2005

Well, if the accountants won't do it, and the farmers are too busy to get on
their tractors and drive to Brussels, how about the truck (or lorry, as we
used to say) drivers?

Having had to weather the increased fuel costs and the insanity of the
working time directive, they are, according to the Transport News Network,
now bitching about foreign truck drivers.

More specifically, they have noted that EU enlargement has created a
"bonanza" for Eastern European lorries on UK Roads. Lorry operators from the
ten accession states joining in May 2004 have doubled their traffic volumes
in the UK, says the Department for Transport.

Of the new EU member states, 31 percent of the traffic from the new member
states is from Poland - up 36 percent in the last year. Czechoslovakia and
Hungary account for 25 percent each - up 23 percent and 87 percent
respectively since Q2 2004. Overall traffic volume from accession states has
increased 3.5 times since 2003.

The figures also confirm that the dwindling share of traffic undertaken by
UK-based international hauliers has stabilised. In 1996, UK hauliers
accounted for half of all international traffic. However, the combination of
growing low cost foreign competition from Eastern Europe, and Sterling's
appreciation in value against the Euro, meant that by 2004 the market share
of UK-based hauliers had fallen to 25 per cent.

Foreign trucks now represent some ten per cent of the maximum weight
vehicles operating on UK roads - there are around 10,000 foreign lorries on
UK roads every day of the week.

The point, of course, is that while UK operators pay through the nose for
road tax and bear some of the highest diesel costs in Europe, none of these
vehicles - or the almost ten percent from outside of the EU - make any
payment to operate on UK roads.

Simon Chapman, Chief Economist of the Freight Transport Association says
"International road haulage is an extremely tough environment for UK
hauliers. No sooner had the problems created by Sterling's exchange rates
begun to abate then lower cost competition from Eastern Europe put further
downward pressure on rates. UK operators cannot operate indefinitely on
wafer thin margins just to keep the wheels of their truck fleets turning."

If we were an independent nation, we could perhaps levy a charge on every
foreign vehicle entering the country - as do some other countries - but this
is regarded as "discriminatory" by the EU and thus prohibited.

In an attempt to level the playing field, the government did attempt to
bring in a lorry road user charging scheme, based on satellite monitoring,
applicable to both domestic and foreign lorries, but this ran into technical
problems and was abandoned, leaving no solution to an obviously unfair
situation.

Perhaps, therefore, the lorry drivers can be prevailed to rise up. They
could give lifts to the accountants, and bankers, and could be joined by the
farmers in their tractors, to say nothing of the slaughterhouse owners, the
fishermen, the airline pilots, the junior doctors (who cannot now get
training places because of the working time directive), the electrical and
electronic manufacturers, the garment retailers, chemical manufacturers, the
military, taxpayers, consumersŠ

Come to think of it, it there anyone left?  Why don't we all rise up?

[25/08/2005] Has the Euro GOT a future?

THE TIMES, London, Thursday 25 August 2005

A hard truth: the future of the single currency is now far beyond our Ken

Anatole Kaletsky (Economics Correspondent)

THERE WAS a time when Kenneth Clarke's admission that "the euro has been a
failure" might have dominated the headlines for weeks. It might even have
changed the course of Britain's history. Had Mr Clarke been prescient enough
15 years ago to recognise the fatal flaws in the single currency project,
the Tories might have been spared the humiliation of Black Wednesday and the
suicidal infighting over the Maastricht treaty; they might still be
governing the country.

If the ex-Chancellor had humbly admitted five years ago that he had been
wrong about the euro, he would surely now be the Leader of the Opposition
and the Conservatives might be vying for power with Labour in a hung
parliament. By this week, however, Mr Clarke's public confession about the
failure of the euro was as irrelevant to the future as Macbeth's final
soliloquy comparing himself to "a walking shadow, a poor player who that
struts and frets his hour upon the stage and then is heard no more".

But while Mr Clarke's regrets about the euro may no longer be of any
interest in Britain, they remind us of something extremely significant about
the wider world beyond. The euro has been enjoying a political honeymoon in
the four years since it was introduced. While the Europe's economic
performance has gone from bad to worse almost since the day when the euro
was launched in January 1999, no respectable politician has ever dared to
blame the euro or criticise the single currency project in any way. This
taboo has now been lifted.

In Italy, Silvio Berlusconi has consciously encouraged an anti-euro movement
designed to blame Italy's problems on Romano Prodi, the man who took Italy
into the single currency, who happens to be his main political opponent in
the forthcoming general elections. In the Netherlands, France and Germany,
the euro has started to be blamed for inflation, economic instability and
unemployment - and while some of these charges may not be intellectually
sustainable, nobody can dispute that the European Central Bank has performed
poorly, certainly in comparison with the US Federal Reserve Board, the Bank
of England, the Bank of Japan or the emasculated German Bundesbank.

Why does all this matter? Because the euro, like any other paper currency,
is just an illusion; its power to command people's lives and motivate effort
depends entirely on a suspension of disbelief. People must not only think
that these elaborately printed but worthless bits of paper will be
exchangeable for valuable goods and services. They must also believe that
their intrinsically worthless paper money will continue to be honoured for
the indefinite future by the whole world. That belief, in turn, rests
ultimately on the faith that the value of paper money will be upheld by a
government with the right and the ability to levy taxes on a wealthy nation.

But if the EU is not going to evolve towards a full-scale political union
who exactly is going to guarantee the value of the euro? And if the
membership of the eurozone is never even going to be equivalent to
membership of the EU, with Britain, Sweden, Denmark and other EU countries
remaining outside, then why should a government, whether it is Italy or
Germany, that finds it inconvenient to use the euro not simply opt out and
re-create its own national currency?

The sudden emergence of questions such as this does not necessarily mean
that the eurozone will fall apart or even that the euro will completely
cease to exist, but it does mean that such possibilities may soon be
seriously considered. And if investors ever start to worry about the
long-term viability of the single currency project, scenarios for the total
collapse of the euro will suddenly come into view.

The most plausible such scenario is Italy withdrawing from the euro, under
pressure from mounting unemployment, a weak economy and imploding public
finances, exactly the same combination of pressures that forced Italy out of
the ERM in 1992. If the possibility of Italian withdrawal were ever taken
seriously by the markets, foreign holders of Italy's E:1,500 billion public
debt would face enormous losses, since the Italian Government would simply
convert its bonds into "new lire" and would legally get away with this
conversion.

In fact, such are the financial risks of Italian withdrawal to the European
financial system, that the Italian Government may now be in a position to
blackmail the European Central Bank into reducing interest rates and
devaluing the euro simply by threatening to withdraw. Such an easing by the
ECB would actually be a rational response to the present economic problems
throughout the eurozone. But this is where a multinational monetary
institution would face a fatal problem.

If the ECB were seen as capitulating to Italian blackmail, the euro's
survival would face a new and even more serious threat: a collapse of public
confidence in Germany and the Netherlands, where populist politicians would
start blaming their countries' economic problems on the weakness of the ECB.
Right-wing German and Dutch politicians might well start demanding a
stronger currency - and threaten to leave the euro if the ECB continued to
accommodate Italy's "inflationary" demands.

It is possible to imagine a situation where the Germans and Dutch were
demanding a tighter policy to punish Italy while Italians were demanded an
easier policy to keep their economy afloat - with both sides threatening to
leave the euro if their demands were not met. The game would then really be
up for the euro and the ECB.

A break-up of the euro seems highly improbable in the next year or two. But
anybody who still believes that such a break-up is impossible should bear in
mind the lessons from the break-up of the ERM, the sterling, franc and lira
devaluations of the 1960s, the collapse of the dollar-based Bretton Woods
system in the early 1970s and the prewar abandonment of the gold standard.
In confrontations between politics and financial markets, events can move
straight from "impossible" to "inevitable" without ever passing through
improbable.