Source: Dr Mariyln Mifsud¸ PKF Malta
As published on Malta Today ; Wednesday 3rd July 2013
It is interesting to recall how the history has bequeathed us with the North American Union¸ the European Union¸ the United Arab Emirates Union and so many others¸ therefore it was only natural that in the quest to save the Euro another attempt is made to create a unionised banking institution. This¸ when fully functional¸ results in a Pan European institution sporting a megalithic edifice that would¸ by controlling the very life of currency¸ hold within its grasp unlimited power over all currency transactions particularly in Europe. Perhaps this might sound hyperbolic¸ exaggerated or surreal but if you think about it¸ Central banks have the exclusive authority to command the printing of more – or less- currency. So the new Banking Union is being constructed in order to solidify the ramifications that were too weak to withstand the tsunami of 2008’s Lehmans¸ Madoff and other banking scandals. Thus the proposed EMU (Economic and Monetary Union) will in theory create an impenetrable army that will shield the world’s economy from the torrents of refined conmen and modern-day white-collar charlatans. On the drawing board the mandarins at Brussels hope that the European Banking Union will breathe a new life into the flaying Euro and restore confidence and economic well-being for posterity.
But the memories are still fresh in our minds how the Western world is wounded from a mighty financial crisis blow¸ where between 2008 and 2011 reportedly a third of the European Union’s economic output was pumped into reviving failed banks using reserves of tax-payer’s cash. In this context it could be many are doubtful of the magical solution of creating a union strong enough to envisage any upcoming structure at this point.
It was only a few months ago when George Soros spoke of the two-pronged classification of the financial crisis which morphed into a sovereign debt crisis and a banking crisis. So if there is a banking crisis that still needs to be rectified a banking union can only act one of the tools to help hone the solution¸ but is certainly not the answer to all of Europe’s problems. And if it is true that the major flaw of the Euro is having a union of currency but not of politics and if the Euro is truly inherently flawed¸ then many ask how does a further union of currency through a banking union help solve the problem? So is the compromise solution only a palliative? The answer can be found by examining the history of the European Union. This was built with the best of intentions¸ one building block at a time using Karl Poppers theory of piece-meal social engineering¸ as the layers were constantly refined and enhanced to meet the time’s needs.
Now one reads of member states willing themselves to exit the Union in an attempt to save themselves from the molten claws of the Euro-Frankenstein. Euro-sceptics are growing stronger in numbers and some of them talk of the collapse of the European Union as a distant yet possible occurrence in Titanic-like parallel. Speaking about huge job losses coupled with the austerity measures introduced in bailout countries EU leaders are meant to focus on fighting yout