There is something so exciting about multinational alliances and treaties like NATO, the UN, and the EU. Some (NATO) have fulfilled their mission to some extent. Others (the UN) have failed miserably time and time again. I think the jury is still out the EU. Certainly the Euro is extremely strong. But the job of the central bank is almost impossible. How do you make economic policy that works for so many different economies? One interest rate might be great for one country while killing the economy in another region. For instance, Britain wants rates to stay relatively high to control inflation. However, such a strong Euro is hurting tourism. (That’s why Disney is doing so well in the US while the rest of the US economy is tanking.) So countries like Italy and Greece that depend on a lot of tourism dollars would actually like to see a weaker Euro and lower interest rates.
On the political side, Europe currently has a rotating presidency. While it may sound great to share the power, there is a price to be paid. A recent article in The Economist describes the political quagmire that has resulted in trying to choose the president of the European Union.
KING SOLOMON, relates the Bible, acted wisely and decisively when faced with two women claiming the same baby: his threat to cut it in half swiftly revealed the real mother. The European Union is different. Faced with two rival plans, its approach is to say yes to both, delay a reckoning for years and then throw money at the compromise. If EU leaders were running Solomon’s court they would award both women custody, build parallel nurseries with public funds and review progress in 2014.
Many things look like great ideas on the surface (see my recent blog entry on the ridiculous gas tax holiday proposal) until you take the time and effort to actually understand the entire situation.
