Euroskeptic Spoilers in the Council: Two-Tracks as a Solution

During its meeting in October 2012, the European Council decided to move forward on the legal underpinnings of a banking supervisor at the ECB. The position was officially accepted at the next meeting in December. The position was designed to be responsible for overseeing the banks in the states that use the euro. Some of the debate between state leaders at the October meeting involved when the supervisor would be up and running. The issue of timing was particularly relevant and indeed pressing at the time because federal bailout money would flow directly to banks only once a supervisor is in place. To the extent that Spanish banks desperately needed additional capitalization to cover their bad debts, the ability of the Council to come up with legislation for a supervisor position in a timely manner—the upcoming German election notwithstanding—was crucial to stabilizing the market not only in the E.U., but internationally as well. The Council's members can be subjected to critique in this respect.

The complete essay is at Essays on Two Federal Empires, available at Amazon.

Is the Commission Blackmailing Britain?

In October 2012, the Daily Online reported, “Brussels officials are threatening to hit Britain with millions of pounds in fines in retaliation for pulling out of pan-European justice and crime policies.” It is the element of “retaliation” that was particularly provocative in the state known for its outspoken Euro-skeptic element. The E.U. cannot afford such an atmosphere to foment. Moreover, the dual-track trajectory should be fostered rather than retarded by the E.U. Government, due to the very different notions of the E.U. among the states.

The complete essay is at Essays on Two Federal Empires, available at Amazon.

2012 Nobel Peace Prize Winner: The European Union

In the modern world of organizations and the members who inhabit them, it perhaps makes sense that the Nobel peace prize would go to a government rather than to a particular official thereof. One immediate problem was figuring out which officials in the E.U. would accept the award. Martin Schulz, the president of the European Parliament, immediately issued a statement indicating that his institution expected to be part of the award ceremony. Herman Van Rompuy, president of the upper chamber, and Jose Barroso, president of the E.U. Commission, could also be said to have had legitimate claims in receiving the award on behalf of the E.U. itself. The absence of an “overall” figurehead in the E.U. is likely a result of Europe’s unhappy experience with “one man rule.” Indeed, the E.U. itself can be said to be a check on such nationalist excesses. In this regard, the peace prize provided Europeans with a change to catch their breath and take in the big picture amid an austerity/debt crisis.

The full essay is in Essays on the E.U. Political Economy, available  in print and as an ebook at Amazon. 

A "Bronx Upbringing" Out-of-State: Tolerance in a Federal Empire

Typically, the American empire is assumed to refer to the hegemony of the U.S. in the world. “Imperialism,” in other words, is thought to refer to a major power imposing on lesser ones around the world—the influence being directed externally. I contend that the United States of America is itself an empire, even apart from its external influence, as the Union is composed of republics having distinctive cultures and on the scale of early-modern European kingdoms (e.g., United Kingdom, Switzerland, the Netherlands—which had been “international” in medieval times).

The complete essay is at Essays on Two Federal Empires, available at Amazon. 

Conflicts of Interest: Relying on a Wall Street Bank’s Safeguards

In October 2012 the Wall Street Journal reported, “the Financial Industry Regulatory Authority is examining how major investment banks and brokerage firms define and manage conflicts of interest between themselves and their clients.” Prime facie, defining and managing such conflicts between oneself and others can be regarded as itself a conflict of interest. It is perhaps a bit like the wolf negotiating with itself on its new job guarding the hen-house. I suspect that the regulators were going too far in attempting to translate “regulating” into managerial terms. The Journal goes on to ponder, “Will the first systematic look at conflicts on Wall Street in years make a difference for investors?” In my view, investors have good reason to be skeptical of the FIRA’s “manageralizing” approach.

The full essay is at Institutional Conflicts of Interest, available at Amazon.

A Separate “Eurozone” Budget: Two-Track Federalism

A separate E.U. budget of €20 billion, 0.2 percent of the GDP in the “eurozone” of the E.U., was proposed in the midst of the debt crisis to be spent in E.U. states that have adopted the euro. At the time of the proposal, the budget for the entire E.U. totaled around €130 billion, which was just over 1 percent of the E.U.’s GDP. While adding 0.2 percent to a federal budget that is just over 1 percent of GDP might seem insignificant to Americans, one might recall the first century of the U.S. (through 1860, and then from roughly 1870 to World War I), when the U.S. budget as a percent of GDP was roughly the same as a percent of GDP.

The complete essay is in Essays on Two Federal Empires, available at Amazon. 

The US Govt Budget as a percent of GDP      

Source: Gordon Tulluck

Homer on Heroic Leadership in Business

Can a merchant be a hero?  A manager in the grips of the business-leadership fad, which began in the 1980s, might reply, “yes, of course.” A hero in the corporate context is said to be a “champion,” “servant leader,” “coach,” or “visionary leader.” Hero and leader are typically conflated in society, moreover, without any real thought on whether heroes are necessarily leaders. A hero might rescue a damsel in distress without having any followers. It could be countered that Odysseus in Homer’s Odyssey is both a hero and a leader on his journey. However, of such a hero-leader, being a merchant would be excluded. Describing the attributes of Homer’s notion of the hero figure is instructive, for while the characteristics seem especially oriented or applicable to merchants, Homer takes pains to exclude the business caste from Odysseus’ heroic leadership.

Odysseus leading his men.  A business likeness?     Source: Maudandoscar.org

Material from this essay has been incorporated into The Essence of Leadership: A Cross-Cultural Foundation, which is available at Amazon. 

Different Unemployment Rates in E.U. States: Stretching Federalism Too Far?

For August 2012, the unemployment rate in the E.U. was 10.5 percent, which translates into 25 million Europeans without a job. In the U.S., the comparable rate was 8.1. These figures mask the huge inter-state differences in both unions, especially in the E.U. What impact do they have on the respective federal systems? 

                                 

                                                               E.U. Unemployment Rate.    Google

The complete essay is at Essays on Two Federal Empires, available at Amazon.

Poor States in the U.S. and E.U.: A Drawback of Federalism

The state-debt crisis in the E.U. has had the unfortunate effect of exacerbating the prejudice in the northern states against the poorer southern states. The people in the latter states are purportedly lazier or more corrupt (e.g., Greece’s patronage system). Historically, it has even been thought that the warmer climate makes people less industriousness. Faced with this long history of prejudice, it is difficult to assume that shifting more governmental sovereignty from the states to the Union will somehow make Europe one big happy family. In other words, federalizing more competencies is unlikely to make every state economically on par with Germany.

The complete essay is in Essays on Two Federal Empires, available at Amazon.

Report on the Future of Europe: Federalism and Democracy

The report of the Future of Europe Group, released on 17 September 2012, warrants careful consideration by E.U. citizens and their state and federal officials. Beyond the various reforms proposed in the document is the critical notion that not every state need be a part of the enhanced integration (i.e., the additional governmental sovereignty being shifted to the Union from the states). This assumption applies both to the proposals themselves and to the application of a super-majority in place of unanimous consent to future amendments to the E.U.’s basic law. It follows that if the Czech Republic and Britain prefer the status quo, this would not prevent other states from going on to closer union. From an American standpoint, this “dual or multiple track” approach to federalism is quite foreign.

The complete essay is at Essays on Two Federal Empires.

The E.U. flag at the European Commission.  

Barroso's State of the Union: Is the E.U. a Political Union?

On September 12, 2012, President Barroso delivered his State of the Union Address. His depiction of the E.U. itself can be regarded as blurry, and his notion of "political union" as being misplaced as something somehow not yet extant. Even so, he does manage to accurately characterize the epoch at the time in terms of the Union being in its development stage. He correctly labels this stage as decisive for Europe.

The complete essay is at Essays on Two Federal Empires.

  President Barroso talking with Angela Merkel of the state of Germany.         NYT

Bailouts, Bond-Buying: E.U. Plows Ahead!

On September 12, 2012, a psychological threshold was reached in the E.U. on the way toward “ever closer union.” That is to say, at the end of that day Europeans could feel an overdue sense that come what may, the euro would be protected. Moreover, the E.U. (at least for the states willing to sign up for greater E.U. enforcement of state deficit and debt limits) would proceed along with further incremental shifts of governmental sovereignty from the states to the union thereof. The sense of relief was palpable in Europe as state and federal officials as well as commentators and citizens breathed a collective sigh of relief.

Most pressingly, the constitutional court of the state of Germany announced that that state could in fact contribute to the fund to bailout indebted states. The court held that the state legislature would have to pass any increases because the further integration of the E.U. must not be allowed to proceed without commensurate democratic legitimacy and the rule of law. The President of the E.U. Parliament observed that this holds at the E.U. level as well.

The complete essay is at Essays on Two Federal Empires.

Should Catalonia Be a New E.U. State?

                                      Catalons rally in favor of secession from the state of Spain.     Globalpost.com

A crowd estimated at 1.5 million rallied in Barcelona on September 11, 2012 to urge the secession of the Catalonia region from the E.U. state of Spain. I put it this way because the fact that Spain was at the time a semi-sovereign state of the European Union mitigates the importance of whether Catalonia becomes a separate state or not. Similarly, the Egypt region of the U.S. state of Illinois had thrice in the history of Illinois hosted a movement to secede from that republic to form a new state in the U.S.

Whether a Catalonia in the E.U. or Egypt in the U.S., the fact that federal law would presumably still apply lessens the impact of the change, especially in the U.S. because of all of the competencies or domains that had been claimed by the Union at the expense of the powers of the state governments (something the Europeans have been assiduously trying to avoid).


The full essay is in Essays on the E.U. Political Economy, available in print and as an ebook at Amazon.

Should Entitlement Programs Be Cut?

If human beings have survival among our inalienable rights as citizens for whom both rights and duties apply, then we as a society must grapple with how sustenance can be guaranteed to those among us who are not meeting their own needs. I put it this way to highlight the lack of conditionality in the right. That is to say, if it is inalienable, then it is irrelevant whether the person is lazy or of a bad temperament.

The entire essay is at "Should Entitlement Programs Be Cut?"

ECB Bond-Buying: Democracy Deficit

In September 2012, the European Central Bank unveiled the Outright Monetary Transactions program in which the central bank would purchase bonds from debt-laden E.U. states that use that euro and agree to “strict and effective” budget policy. The bank’s head, Mario Draghi, insisted that the program is within the bank’s mandate to protect the value of the euro. Indirectly, if a state government that uses the euro were to default, the currency itself would face downward pressure that could cascade into the collapse of the currency.

Will the ECB be the one to save the euro?     Estonian Free Times

The full essay is in Essays on the E.U. Political Economy, available in print and as an ebook at Amazon.