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On Sunday, Ireland became the latest bailout nation in the European Union, accepting an emergency loan of $85 billion Euros ($113 billion) in order to stave off insolvency. These bailouts are an effort to save the European Union, a conglomeration held together by a common currency–and not much else. Can the EU be saved? Probably. Should the EU be saved? That is the essential question.
The European Union was officially created on February 7th, 1992 when the Maastricht Treaty was signed. On Jan. 1, 1999, the euro was introduced as the official accounting currency according to that treaty. At that point, EU countries were required to fix their currency rates to the euro, and prevented from allowing those rates to fluctuate against the euro itself or the currencies of any other Union members. On Jan. 1, 2002, the euro became legal tender, and on July 1, 2002, individual member currencies were officially eliminated. At that point, the European Central Bank began running the monetary policies of the member nations.
Why was the European Union created? A continent which had suffered through world wars was firmly convinced that uniting rivals whose long history of confrontation had led to economic devastation and the deaths of millions would — as former French Prime Minister Robert Schuman said in the Schuman Declaration of 1950 — make war “not merely unthinkable, but materially impossible.” Thus began a long process to realize what Winston Churchill hoped for in 1946, when he envisioned a future “United States of Europe.” “In this way only will hundreds of millions of toilers be able to regain the simple joys and hopes which make life worth living. The process is simple. All that is needed is the resolve of hundreds of millions of men and women to do right instead of wrong and to gain as their reward blessing instead of cursing,” he said in a 1946 speech in Zurich, Switzerland.
Unfortunately, the “toilers” are currently unimpressed. In Dublin, 100,000 Irishmen took to the streets to protest the austerity measures that will be enacted as a result the latest bailout. In that regard, they join their fellow EU compatriots, the Greeks, who engaged in a series of demonstrations, some violent, after they received a similar bailout with similar strings attached. Thousands of Europeans have also demonstrated in France, England, and Portugal as governments everywhere in Europe grapple with the daunting reality that occurs when other people’s money has run out.
Yet in Ireland, there is an unseemliness to this bailout which legitimizes a substantial portion of Irish wrath. Last May, Irish Senator David Norris spoke to the Seanad (Irish Senate) regarding a “grossly serious matter” relating to a leading European bank. According to an article in Ireland’s Sunday Business Post, Mr. Norris was referring to “liquidity breaches at the Irish operations of a leading European bank. It is believed that the scale of the alleged 2007 breaches was so great that it left the bank several billion euro short for liquidity purposes.” Mr. Norris was allegedly given this information by a whistleblower who worked as “senior risk manager based at one of the European banks in the International Financial Services Centre” who claimed his “repeated 2007 warnings that liquidity had fallen disastrously short of the required levels went virtually unheeded by both the bank and the Financial Regulator.”
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