Investment news, European Union. Due to numerous problems inside European Union (Greek debt problems, similar situation in Italy), pessimistic predictions about its future have started appearing more frequently. Moreover, there have recently appeared already panic comments about sad perspectives of “common European home”.
All experts are speaking straight out about a soon collapse of European Union. In this regard they recall another relatively recently deceased Union – Soviet. One of these days French newspaper “Le Monde” has published a very interesting article of Francois Heisbourg, with a very tell-tale headline “Will Europe repeat the history of the USSR?”
Such topics used to be characteristic of Russian press, especially so-called “patriotic”. This time Frenchmen have raised up the issue, encouraging people to seek for the common features between these giant and unique political entities and their problems.
“Le Monde”: modern EU is late USSR
Francois Heisbourg appeals to recall late 1980-s and details of USSR collapse, claiming that people are blind if they do not notice some parallels:
■ common economic problems. “Despite the difficulties between these two systems, in both cases we can observe the loss of economic viability and the erosion of economic growth,” writes the French journalist. It is not hard to guess that economic problems of the EU first of all concern Euro crisis;
■ Euro problems. The author’s comments about the problems of European common currency are the following: “…we have adopted common currency, having created no federal means of management and tax mechanisms, without which Euro has no future”. The USA, India, and Brazil are a good instructive example of this, as in these countries the differences between states are so big that it is hard to imagine how they can coexist. At the same time, though, they have well-set federal mechanisms, which allow evening any contradictions. Besides, Europeans refuse to recognize federal incentives at any level, dooming the common currency to total failure. The only thing that remains unclear is what is the relation to the USSR, where the federal constituent used to be very strong?
■ what will happen if Euro collapses? “If common currency is abolished, EU will not last much longer,” claims Heisbourg, “common market will not survive, as well as the freedom of movement.”
■ what if Euro survives? This neither guarantees the long life of “common European home”. There is a large number of other noneconomic problems, which are bringing the EU to chasm. French observer mentions the following:
- no common ideology and growing skepticism to common European values (this factor existed in late USSR);
- no trust to centralized power, which is represented Brussels officials (similar used to exist in the Soviet Union);
- no clear boundaries (the USSR could not afford such luxury);
- no common defense policy, which France is always against, and Britain refuses to partake. (it certainly was different in the USSR);
- finally, recognition of common currency not in a part of the territory (absolutely nothing parallel to the USSR).
■ what is the main parallel, according to the French observer? Modern EU and “Gorbachev” USSR have one main common feature: all decisions are taken with a delay and, accordingly, have little influence. And there are no reservations to this;
■ some optimism. Anyway, Francois Heisbourg supposes that Europe is not going to face “Soviet-type” or even “Yugoslavian-type” separation. Europeans are believed to have learnt a lesson from two world wars and will not fight for hegemony anymore; instead, they will now care only about personal welfare.
USSR – EU: are there more similarities or differences?
The issue, which was raised by French press, has paid attention to large multinational entities that are now formed in European territory. Knowing the history of the Soviet Union and observing establishment and evolution of the European Union, these two projects can be compared to find similar and different features. Judging from these features, certain conclusions can be drawn.
According to , the two unions had some common features:
1. Both, USSR and EU, are multinational entities. Thus, their members include not only nations with different cultures, but also states/republics with different economic growth and potential. Members of each Union are approximately divided into three groups: donor countries that pay for others and have equal political rights with others, developed countries that pay for themselves, and less-developed countries that receive support either from donors, or from the center.
2. Economy. Both Unions formed common economic space. However, during the time of modern global economy, when the whole world forms one free market, exclusively European market is something odd.
3. National and union regulatory bodies functioning together. In this reference, their (USSR and EU) competence was very different, which, though, does not change the essence.
4. Common currency. The only difference is that Euro, unlike Soviet rouble, is not recognized everywhere in the EU.
5. Inner boundaries are only administrative. It is true in both cases.
6. Common ideology. In USSR – communism, and in the EU – so-called “European values”.
Dirrefences:
1. First of all, USSR was a state, whereas EU is an association of sovereign states (that have their own foreign policy, armed forces, and even political system). It is rather difficult to imagine contradictions between Ukrainian and Soviet delegations in UNO, own armed forces of Georgian SSR, or monarchy inside Soviet Central Asia.
2. Soviet Union had planned economy and similar to current Greek problems (when a country has been blinding the real state for a long time) were absolutely impossible in the USSR.
3. The republics entering the USSR did not undergo a long intake procedure and did not have to wait for decades.
4. The USSR has never considered excluding one republic or another, as it is now happening to Greece.
5. And, most importantly, USSR collapsed not because of its foreign debt or devaluation of national currency. It had the whole range of other reasons (ideological crisis, weak central power, and defeat in Afghanistan). Some of these problems are topical for Europe, but they certainly are not fateful.
Are the rhumours about the USSR collapse related to Euro rate?
Economic and social problems continue in Greece, Italy, Spain , Portugal , and other EU countries. In combination with panic among analytics and political scientists, these problems lead to further devaluation of Euro rate in relation to other national currencies, especially US dollar.
According to Masterforex-V Trading System , having formed down wave а(С) or wave С of Н4/Н8 level, Euro rate is within correction, maintaining the opportunity to form sub-wave в(С). Formation of strong down wave с(С) will be proved by passing the minimum of 1.3483; nearest support will be provided by points 1.3440/50 and 1.3356/76. Mid-term trend will reverse if sloping channel MF and pivot MF are passed.
“Market Leader” Magazine and hold a questionnaire in Forex forum: in your opinion, is European Union repeating the history of the former USSR?
■ yes, no doubt;
■ no, it has its own way;
■ history cannot have two exactly the same situations.
