EU at ‘crunch point’ over future of the Eurozone says expert
The EU performed a U-turn this weekend after the bloc threatened to cut-off vaccine exports to the UK. After widespread condemnation following Brussels’ decision to trigger Article 16, effectively erecting a hard border on the island of Ireland, European Commission President Ursula von der Leyen backed-down following a call with Prime Minister Boris Johnson. Many have said the events which unfolded at unparalleled speed exposed the “second rate” nature of the EU.
Countries within the bloc that are discontented with the EU – mostly those in the south of the continent – might now reconsider their own place in Brussels, it has been suggested.
Yet this will be an almost impossible feat, Robert Tombs, the renowned British historian, told Express.co.uk.
He said almost every country in Europe is “trapped” inside the eurozone, the monetary area in which 19 states have adopted the euro.
The problem comes as any country wishing to exit the euro, reverting to its old currency, would face harsh economic forces and distorted exchange rates.
Any such move would ultimately devastate a country’s economy at unprecedented rates.
EU: The bloc has trapped many countries within the eurozone
EU vaccine: European Commissioner for Health Stella Kyriakides talks about the vaccine crisis
Talking about whether Brexit will give countries in the EU inspiration to follow suit, Prof Tombs said: “I’m sure there will be more discontent, there’s quite a lot of that already, but I think the thing is there’s no obvious way out.
“Britain didn’t dislike the EU more than most other countries in Europe, but we could leave it because we were out of the eurozone and hence the risks of leaving were not so great.
“In countries like Italy, France, Greece, where the EU is much more unpopular than it is in Britain, there is widespread belief that you can’t actually leave it.
“So, what do you do? You might say the obvious thing in that case is to change the way it operates. But there’s no suggestion of how you can do that, and hence people are in a sense stuck, they’re trapped.”
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Eurozone: The monetary union essentially binds many member states to the bloc
Already many countries in the EU are tied to the bloc as a result of debt and previous contractual obligations.
Greece, for example, to avoid default, loaned money from the EU and International Monetary Fund after the 2008 financial crisis, and is still to this day paying back the billions of euros sum.
More recently, the EU approved a COVID-19 recovery fund to bail out those countries hardest hit – mostly in southern Europe – by the pandemic.
Pay-out of the stimulus package has been delayed, however.
German Chancellor Angela Merkel and French President Emmanuel Macron – both of whom were enthusiastic proponents of the fund – lashed out at Brussels for being “too slow” to get the money out.
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Robert Tombs: The historian said it is almost impossible for countries to leave the eurozone
Italy: Italy’s government debated the EU COVID-19 recovery package last month
French finance minister Bruno Le Maire suggested that EU bureaucracy was to blame.
While it is a positive aspect for countries whose economies have been battered by the pandemic, many have opposed the package, branding it as more EU integration, intended to wed fragile countries to the bloc even further.
Sergio Montanaro, Italexit Party spokesman, told Express.co.uk that the recovery fund in fact “binds countries to the EU” for the indefinite future.
It is a sentiment held by Prof Tombs, who said the more integration occurs, the more European countries simply “can’t undo the euro”.
He said: “For people like Emmanuel Macron, they want Europe to become a sovereign Europe with much more of a central government controlling the economy.”
Coronavirus: The southern European countries have been hit the worst by the coronavirus pandemic
Former left-wing Minister of Finance for Greece, Yanis Varoufakis, said this poses no problem for countries like Germany and France who enjoy a euro surplus.
In 2018, he went as far as to predict that the poorer EU countries are at the mercy of their rich northern neighbours, who could quite easily leave the Union and plunge the likes of Italy and Greece into crisis.
He said of the German political class: “The moment they start sniffing in the wind that possibility they might have to bail out 2.7 trillion euros of Italian debt, believe you me, the Bundesbank already has plans in the drawer for printing Deutsche Marks.”
And while many European nations appear “trapped” within the EU, Britain, it has been noted, is now able to pursue state aid, and industrial and manufacturing endeavours without having to secure consent from Brussels.
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Paul Embery, a leading trade unionist and Labour member told Express.co.uk: “We’ve now freed ourselves from the shackles of the EU which I believe to be an explicitly anti-socialist institution, which is very much in favour of market forces and pro-austerity, and against public ownership and against state aid.
“These powers will now be repatriated to the UK.
“Of course, I don’t think a Conservative Government will implement a lot of these things, but there’s an opportunity for, say, a radical Labour Government in the future to engage with some of those things now that we’ve left.”
‘This Sovereign Isle’ by Robert Tombs, published by Allen Lane, is out now.