The Rotten Heart of Europe: The Dirty War for Europe's Money

Rating:
Summary: Excellent
Review: Bernard Connelly has written the consummate "expose" on the Maastricht treaty and the process of European monetary integration. Connelly, a former member of the European Commission, blows the lid off the Maastricht treaty and the intransigence of Jaques Delors and the Kohl-Mitterand relationship, which led to the European Monetary Union (EMU) provisions in Maastricht. This is at heart story of the politics of monetary policy, especially the failed Exchange Rate Mechanism (ERM), with three primary themes: the primacy of politics in determining monteray policy, the role of "vision" and "ideology" in determining policy, and the comedy of errors which was the ERM. One should not let the economics of this book prevent them from reading it. At heart, this is a great story and has the intrigue of the best historical novel. Connelly has written a factual tale containing a heroine (Baroness Thatcher), villians (Delors, Kohl, Trichet, Mitterand, Tietmeyer), and Alphandery, the innocent whistle-blower who brings the ERM crashing down. Connelly provides any reader interested in knowing about the lunacy of European monetary integration just why this idea is flawed, and provides economic evidence to defend his primary arguments. Among the more important and convincing conclusions reached in this work are: the necessity of flexible exchange rates, the inherent negatives of Europhilism (and especially Franco-philism, since "Europe" is seen as way to prevent the rise of "Anglo-Saxon" institutions), and the belief in free, competitive markets. A final comment one feels obligated to make about this book is its timeliness, and his villification of France, which is supported by following the recent row over the control of the European Central Bank. If one wants to read one book on why the EMU was really founded, and why it won't work-this is the book.

Rating:
Summary: Overwhelming
Review: Bernard Connolly was fired by the European bureaucrats after this book came out. If you read this book you will understand why. This book has all the detail you could ask for. It is an incredible expose of the events leding up to European Monetary Union.

If you support the European Community, reading this book will change your mind -- if you dare read it.

Rating:
Summary: Overwhelming
Review: Bernard Connolly was fired by the European bureaucrats after this book came out. If you read this book you will understand why. This book has all the detail you could ask for. It is an incredible expose of the events leding up to European Monetary Union.

If you support the European Community, reading this book will change your mind -- if you dare read it.

Rating:
Summary: Excellent
Review: Excellent work. The reality at the core of all the pomp-and-circumstance surrounding EMU. Read it and be wiser.

Rating:
Summary: Superb demolition of the EU
Review: Review of The Rotten Heart of Europe: the dirty war for Europe's money, by Bernard Connolly, Faber & Faber, 1995, £17.50.

THIS BRILLIANT book is a devastating exposure of the pretensions of those who want to rule Europe. It shows that the attempts to achieve monetary and economic union, and consequently political union, are bad for us. They will not bring monetary stability, economic growth or political harmony. Instead they will destabilise currencies, reduce growth and promote hatred between the nations of Europe.

Economic and Monetary Union (EMU) is supposed to build on the experience of the Exchange Rate Mechanism (ERM). Britain's membership of the ERM forced us into a disastrous and quite unnecessary recession. After two years of suffering, Major said in July 1992 that Britain would soon be the leader of the ERM. Two months later, we were well out of it, and ERM had bermbed, as Jacques Clouseau, Major's mentor, would say.

ERM constrained British Government policy on non-monetary matters too. The Government appeased Spain over the fishing dispute to keep Spain happy about the sterling/peseta rate. So the Common Fisheries Policy, so damaging to Britain's fishing industry, is not an isolated EU aberration: it stems from the whole logic of economic and monetary union.

The ERM was described as the Eternal Recession Mechanism; EMU is likely to be Even More Useless. The ERM kept the poor countries poor; it did not help them to converge; it certainly did not help them to meet the Maastricht criteria. Spain's experience of ERM was catastrophic: 22% unemployed. The ERM forced Denmark into recession: unemployment doubled to 12%, the budget was slashed, and investment, output and wages all fell. In the ERM, Ireland's unemployment soared from 11% to 23%. ERM subordinated nations' economic interests to minorities' foreign policy goals: ruling class interests dominated working class interests. Some still claim that ERM and EMU could control capital, but actually they were and are attacks on the working class.

A 1992 report by the Monetary Committee, which advises the EU's Council of Ministers, admitted that ERM did not stabilise prices or money and did not reduce inflation. Perhaps it was after all just a tool for moving countries towards political union.

The book also depicts the present dangerous struggle between the French and German ruling classes for control over the proposed institutions of a single European state. Germany is determined to keep the Deutschmark and the Bundesbank: it wants EMU so that it can assimilate other countries into an expanded Deutschmark zone. France wants a new currency and wants to get its hands on the Bundesbank; it pushed for the Maastricht Treaty, which would destroy the Deutschmark. Who would control Europe's currency? Who would control the proposed new European Central Bank? Germany or France?

As Wilhelm Nolling, a Bundesbank Council member, said: "We should be under no illusion - the present controversy over the new European monetary order is about power, influence and the pursuit of national interests."

They are already fighting about the 1996 InterGovernmental Conference. Germany wants the economic criteria for EMU met as soon as possible: it insists that economic convergence must precede monetary union. France wants the earliest possible date for monetary union, believing that monetary union would produce economic convergence. Both are wrong of course: convergence cannot and will not be achieved, either way.

EMU's implications are universally unpopular. The workers of France, Italy and Belgium are striking against the EU's schemes. The Austrian Government fell in October, unable to pass the EU-required budget.

We can see both from ERM's effects, and from the effects of the attempted imposition of the Maastricht criteria, how damaging membership of EMU would be. It would cause, as intended, a permanent lowering of wages, a permanently higher level of unemployment, and massive cuts in public spending.

Connolly sums up: "My central thesis is that the ERM and EMU are not only inefficient but also undemocratic: a danger not only to our wealth but to our freedoms and ultimately, our peace. The villains of the story - some more culpable than others - are bureaucrats and self-aggrandizing politicians. The ERM is a mechanism for subordinating the economic welfare, democratic rights and national freedom of citizens of the European countries to the will of political and bureaucratic elites whose power-lust, cynicism and delusions underlie the actions of the vast majority of those who now strive to create a European superstate. The ERM has been their chosen instrument, and they have used it cleverly."

Rating:
Summary: Superb demolition of the EU
Review: Review of The Rotten Heart of Europe: the dirty war for Europe's money, by Bernard Connolly, Faber & Faber, 1995, £17.50.

THIS BRILLIANT book is a devastating exposure of the pretensions of those who want to rule Europe. It shows that the attempts to achieve monetary and economic union, and consequently political union, are bad for us. They will not bring monetary stability, economic growth or political harmony. Instead they will destabilise currencies, reduce growth and promote hatred between the nations of Europe.

Economic and Monetary Union (EMU) is supposed to build on the experience of the Exchange Rate Mechanism (ERM). Britain's membership of the ERM forced us into a disastrous and quite unnecessary recession. After two years of suffering, Major said in July 1992 that Britain would soon be the leader of the ERM. Two months later, we were well out of it, and ERM had bermbed, as Jacques Clouseau, Major's mentor, would say.

ERM constrained British Government policy on non-monetary matters too. The Government appeased Spain over the fishing dispute to keep Spain happy about the sterling/peseta rate. So the Common Fisheries Policy, so damaging to Britain's fishing industry, is not an isolated EU aberration: it stems from the whole logic of economic and monetary union.

The ERM was described as the Eternal Recession Mechanism; EMU is likely to be Even More Useless. The ERM kept the poor countries poor; it did not help them to converge; it certainly did not help them to meet the Maastricht criteria. Spain's experience of ERM was catastrophic: 22% unemployed. The ERM forced Denmark into recession: unemployment doubled to 12%, the budget was slashed, and investment, output and wages all fell. In the ERM, Ireland's unemployment soared from 11% to 23%. ERM subordinated nations' economic interests to minorities' foreign policy goals: ruling class interests dominated working class interests. Some still claim that ERM and EMU could control capital, but actually they were and are attacks on the working class.

A 1992 report by the Monetary Committee, which advises the EU's Council of Ministers, admitted that ERM did not stabilise prices or money and did not reduce inflation. Perhaps it was after all just a tool for moving countries towards political union.

The book also depicts the present dangerous struggle between the French and German ruling classes for control over the proposed institutions of a single European state. Germany is determined to keep the Deutschmark and the Bundesbank: it wants EMU so that it can assimilate other countries into an expanded Deutschmark zone. France wants a new currency and wants to get its hands on the Bundesbank; it pushed for the Maastricht Treaty, which would destroy the Deutschmark. Who would control Europe's currency? Who would control the proposed new European Central Bank? Germany or France?

As Wilhelm Nolling, a Bundesbank Council member, said: "We should be under no illusion - the present controversy over the new European monetary order is about power, influence and the pursuit of national interests."

They are already fighting about the 1996 InterGovernmental Conference. Germany wants the economic criteria for EMU met as soon as possible: it insists that economic convergence must precede monetary union. France wants the earliest possible date for monetary union, believing that monetary union would produce economic convergence. Both are wrong of course: convergence cannot and will not be achieved, either way.

EMU's implications are universally unpopular. The workers of France, Italy and Belgium are striking against the EU's schemes. The Austrian Government fell in October, unable to pass the EU-required budget.

We can see both from ERM's effects, and from the effects of the attempted imposition of the Maastricht criteria, how damaging membership of EMU would be. It would cause, as intended, a permanent lowering of wages, a permanently higher level of unemployment, and massive cuts in public spending.

Connolly sums up: "My central thesis is that the ERM and EMU are not only inefficient but also undemocratic: a danger not only to our wealth but to our freedoms and ultimately, our peace. The villains of the story - some more culpable than others - are bureaucrats and self-aggrandizing politicians. The ERM is a mechanism for subordinating the economic welfare, democratic rights and national freedom of citizens of the European countries to the will of political and bureaucratic elites whose power-lust, cynicism and delusions underlie the actions of the vast majority of those who now strive to create a European superstate. The ERM has been their chosen instrument, and they have used it cleverly."