Why Europe Cannot Defend Itself
In the most extreme irony of all ironies in short: Europe cannot defend itself because of The European Union.
This is not polemic nor political posturing. This is about facts: hard inescapable facts.
One of the most unpalatable truths is that the institution supposedly established in order to end European wars and ensure peace, The EU, as the successor to the European Economic Community and the European Community is why Europe cannot defend itself.
I try to provide to you with insight into how and why the EU is why Europe cannot defend itself. The EU economic policy of Austerity is a main focus of this paper. Europe cannot defend itself because it does not have the money. Europe does not have the money because of Austerity. Europe has Austerity because of the euro. Europe has the euro because of The EU.
The economies of European states have been so damaged by Austerity that they cannot afford to defend themselves. The contagion in the banking system in Europe caused in 2007-08 by banks investing in worthless US mortage debt and unwise highly leveraged lending led to European states borrowing to attempt to bail out their banks. Ever since the least able to afford it, those in the bottom 40% of income, have been paying the price whilst those most able to have been avoiding the pain. The rich benefit and the least able to pay are paying and continue to pay.
Europeans, including UK citizens, are still paying today for the banking crises of 2007-2008 and paying with Austerity.
How has such stupidity been possible at the highest levels of governance in many of the most developed economies in the world?
There are many unpalatable truths about the European Project and how dangerous it is to world peace and social and economic stability. Just one of many such truths includes that the EU has appointed to the Presidency of the European Commission, and now re-appointed, without election nor opposition, a former German Defence Minister who single-handledly almost destroyed the German military, the Bundeswehr, and whom members of her own party has decried her lack of competence publicly in the German press.
But that is not the main reason why the EU cannot defend itself - but it is a contributory part and part of the wider lunacy of the EU.
Feel Free to Rant
You might become increasingly angry as you read this. You will be righteous and justified to be.
If in addition you want fire and brimstone exiting your head's every bodily orifice then read the prior paper in this series:
Austerity & the Lessons of History
It is often said that insanity is doing the same thing repeatedly expecting a different result. A main reason why Europe cannot defend itself is the policy of Austerity. Austerity is meant to reduce wasteful spending. For a more than a decade it has been simultaneously depressing severely and steadily economies across Europe. This is whilst substantially increasing steadily EU states' government debt - the one thing which is the opposite of what the proponents of Austerity tell us was a main purpose of it.
The EU's economic policy of Austerity was meant to reduce governments debt and restore confidence. Austerity introduced during a recession has the opposite effect. If introduced when all other states are doing the same it leads to a viscious downward spiral.
Austerity has been slowly but steadily destroying economies in the EU. EU states with depressed economies do not have sufficient revenue to pay debt. They have high debt to GDP ratios and consequently keep borrowing.
Austerity has a 2500 year history of failure: of producing greater depression and increased and not reduced state borrowing. In short it is counterproductive.
Austerity: The Great Failure [2014] – Professor Florian Schui University of St. Gallen.
"The conclusions of this survey of the last 2,500 years .... : there are no convincing economic arguments for austerity policies in their current form and there is no compelling moral or political case for them either. Austerity, in its current form, is simply a great failure."
Chapter 7 Austerity The History of a Dangerous Idea - Professor Mark Blyth:
"In general, the deployment of austerity as economic policy has been as effective in us bringing peace, prosperity, and crucially, a sustained reduction of debt, as the Mongol Golden Horde was in furthering the development of Olympic dressage. It has instead brought us class politics, riots, political instability, more rather than less debt, assassinations, and war. It has never once "done what it says on the tin."
Austerity is still a dangerous idea: a conversation with Mark Blyth "Who is benefiting and who is losing. That's really what matters." Elias Rutten Feb 11, 2025
"If we start with the basics: when you're in recessionary or quasi-recessionary conditions, and the government spends around 40% of GDP, significant cuts lead to two predictable outcomes. First, your debt stock increases due to the denominator effect. As GDP shrinks, the same amount of debt becomes a larger share of the economy. Then you say, "Oh no, look at all that debt; we need more cuts," and you spiral further into economic decline.
Fiscal rules don't help either. This is what the British are learning. Cutting spending during a recession effectively creates the recession. That, in turn, worsens the deficit because less tax revenue comes in. Then policymakers point to the deficit and call for more cuts, locking themselves into a cycle of self-harm. This happens every time."
The 2008 European Financial Crisis
The 2008 European crisis may have been triggered by the 2007-08 US financial crisis [more below] but it had its origins in incentives for banks when the euro was launched. The euro is, according to economist Professor Mark Blyth, "a financial doomsday machine the Europeans built for themselves". To understand why the origins lay in those incentives, requires consideration of the official account of the European crisis: how the crisis hit Europe, the ideological differences over spending, the discovery of the PIIGS economies [Portugal, Ireland, Italy, Greece and Spain], government debt, and the demand for austerity. For a detailed account see Professor Blyth's 2014 book: Austerity The History of a Dangerous Idea
Following the US financial crisis [more below] that debt was worth much less than was paid for it.
The introduction of Austerity was a consequence of the euro. This was not a consequence of excessive government spending. It was a consequence of preventing the collapse of the European banking system with all the severe consequences that would have entailed.
European states were threatened with the collapse of the banking system and potentially the collapse of the euro. So they borrowed heavily to bail out the banks. The debts of European banks in many cases were multiples of the annual Gross Domestic Product of EU states.
The euro as a currency and the EU as an area of trade without borders enabled the development of a system of Europe-wide banks such that that no single EU sovereign state could cover the risks generated by their own banks. The banks' capitalisations are too big and EU sovereign states don't have printing presses to print their way out of the problem with new money. The euro spawned a banking system which cannot be allowed to fail.
That is a reason for Austerity, despite Austerity per se being the pursuit of a nonsense economic option which at first blush looks reasonable: state borrowing to cover bank debts and the need to reduce state borrowing to sustainable levels.
The euro is in effect a single external floating currency, with national currencies and printing presses abolished. The Germans, through the European Central Bank [ECB] in Frankfurt, controlled the presses to eliminate inflation and devaluation as options. The new European Central Bank had one goal, to keep inflation around 2 percent, regardless. Control of interest rates was meant to lead to prices and wages automatically adjusting.
The euro is a political project with economic incentives for the banking crisis. Major European banks took on as much sovereign debt and assets of peripheral EU states as they could. This may have been because they believed the ECB behind the euro had reduced risk. The European Commission encouraged banks through incentives to take on bonds from peripheral EU states which the banks then used as collateral for further bank borrowing. This increased demand for the bonds.
Banks operated without borders in the Eurozone, taking on lending throughout the EU. Responsibility for bank failures remained national. With all banks following the same approach resulted in a banking system which no single EU state could support in the event of a crisis.
During the noughties what used to be conservative European banks increasingly borrowed short-term internationally, particularly in the USA. It cost less than higher interest paid to retail savers.
The US Financial Crisis
In 2008 the 2007 US financial crisis came to Europe and pushed European economies into recession. In addition to buying debt from peripheral EU states, European banks had invested in US private debt [effectively bundled up US mortgage loans] for the profit to be made on the repayments. They also borrowed overnight from the US 'Repo' market to fund long-term borrowing. In 2007-08 the US debt turned out to be junk based on bundles of ['securitised'] worthless ['subprime'] mortgages. Short term borrowing from the Repo market also dried up as part of the US financial crisis,
The banks could not recover what they paid and were not receiving the repayments on the mortgages. As the debt they bought became worthless they could not sell it to get back and so repay the money they borrowed to buy the worthless debt. And with no repayments being made on that debt the banks could not pay the interest instalments due on the money they borrowed to buy those junk US loans.
The debt-to-GDP ratios of European states grew substantially in four to five years from an average of 70 percent in 2008 to 90 percent at the end of 2012 in consequence of the US financial crisis and bailing out European banks. Each EU state had to take on the entire system's liabilities. So there had to be sufficient margin in government borrowing to GDP to enable that.
The introduction of Austerity was a consequence of the euro. This was not a consequence of excessive government spending. It was a consequence of preventing the collapse of the European banking system with all the severe consequences that would have entailed. European states were threatened with the collapse of the banking system and potentially the collapse of the euro. So they borrowed heavily to bail out the banks. The debts of European banks in many cases were multiples of the annual Gross Domestic Product of EU states.
When government borrowing is too high, this can result in increased borrowing costs and in difficulty borrowing if the risk of default and hence non-payment is more than marginal.
Why is Austerity relevant to the UK
Despite not being in the EU's common currency, the euro, and so having the freedom to choose how to manage its own economy, the UK under Prime Minister "Call me Dave" Cameron and Chancellor George Osborne implemented Austerity. Osborne announced the policy in his budget speech of Tuesday, 22 June 2010. This was despite having the full range of alternative economic policies available to manage the UK's economy.
In short, in 2010 and since, the UK could have chosen to adopt economic policies to stimulate the economy which would have seen continuous sustained growth but chose the policy of widespread poverty instead: Austerity.
The UK has been following Austerity effectively for the best part of 14 years from and including 2010, whether it has been officially described as 'Austerity' or not.
Under Labour Chancellor "Rachel from Accounts" Reeves appears to be continuing Austerity with expected further cuts in public spending and tax increases.
So despite Austerity resulting in the UK wastefully borrowing on average an eye-watering £128 Bn to achieve nothing in terms of recovering the economy or investing in the UK's infrastructure, we have had and are continuing to have more of the same. The record national debt of £2.7 trillion under the Tories keeps on increasing.
If this continues the result will be national bankruptcy with no public services, no armed forces, no welfare state and no government because no one will lend the UK any more money.
What is Austerity
Austerity is supposed to be an economic policy of a form of voluntary deflation: based on reducing wages, prices and public spending. The EU's economic policy of Austerity was believed to be how to reduce governments debt and restore confidence.
Under Austerity this is supposedly best achieved by cutting a state's budgets, debts and deficits. It is claimed it will inspire "business confidence" because government will not be using available capital through the borrowing and so not competing with the markets' need for capital for investment nor adding to the nation's already "too big" debt. Austerity The History of a Dangerous Idea - Professor Mark Blyth
Why Austerity?
Europe has Austerity in part because all other economic options to manage the economies of EU states can no longer be used: a consequence of the Germans' dominant influence in the EU and in the introduction of the euro. But that alone does not explain the plain stupidity of adopting an economic policy which could only and did and continues to make matters far worse.
Austerity is the price the banks want us to pay for their failures. So it was presented politically as fault of European states which, aside from Greece, it was not.
Austerity is not the only reason Europe cannot defend itself but it is a major reason and the most proximate.
The Germans and the European Central Bank opposed fiscal stimuli prior to the 2010 G20 Toronto meeting which foresaw the widespread adoption of Austerity. The final communiqué called for an end to reflationary spending for "growth friendly fiscal consolidation" which was a coded way of saying "Austerity."
Germany had by the end of 2009 recovered easily from the recession following the financial crisis, stabilized its banks, and returned to export-led growth. Germany had become the largest and most powerful economy in Europe by the early 1960s based on exports of high-quality manufactured goods worldwide. West Germany snapped up and integrated bankrupt East Germany, reducing labour costs and restored competitiveness in 2009.
The rest of Europe was left with severe economic problems and Austerity to exacerbate them for the coming decade and a half - right up to 2025 with no end in sight.
Austerity appears appealing to those who believe "common sense" can solve economic problems. "You cannot cure debt with more debt". Too much debt means 'stop spending'. But, economics is neither intuitive nor "common sense" [in the meaning here].
A primary reason Austerity was adopted is consequent upon blinkered Germanic economic tunnel vision. This all stems from the economic consequences of the unwise decision to inflict on the EU a single European currency, the euro to replace all other currencies in the Eurozone.
Eurozone states having adopted the euro no longer had national currencies. They no longer can print their own money to bail out Europe's banks. They could neither inflate nor deflate. They could only borrow. The cost of borrowing increased – not because of government overspending [eg. on welfare] but because of substantial borrowing to bail out the banks and because lending to government became risky so borrowing became more expensive. The banks' debts combined were often so large they dwarfed even the largest EU states' GDP by several multiples.
EU states had to underwrite the banking system's debts. When government borrowing approaches a states' annual Gross Domestic Product [GDP] the cost of borrowing to bail out the banks became unsustainably high. European Austerity was seen as the way to reduce government borrowing incurred to bail out the banks. The Germans, the ECB and the euro meant it was the only option even though it could not work but only make a bad situation worse.
Destroying Western Democracy from Within
How could that be possible? Or are they expecting what has happened? And if so why did they pursue that outcome? Lest we not forget, "they" include former UK Prime Minister "call me Dave" Cameron and Chancellor George Osborne.
Other questions include why Ed Davey and the LibDems want to rejoin the Customs Union of a dying on-its=feet EU, or the Reverend Starmer and his Far Left congregation preaching closer economic and political cooperation, or the Greens and various other shades of Ridiculous Rooked Remoaners and Rejoiners who want to go back in.
The simple, straightforward answer almost anyone can understand.
The simple answer was known, predictable and should have been openly debated when the idea of the Maastricht Treaty was first floated. I was horrified in 1992 that John Major and his governing Conservative Party with a slim majority executed what to me was like a coup d'état approving the signing of the Maastricht Treaty - committing the UK to the doomed European Project - without any say by the people of the United Kingdom.
I could not at the time believe how a Prime Minister, John Major and his party, could be allowed to do anything so foolish and damaging to the interest of the UK and its people. In my view it was akin to an act of treason which today can be seen now places the entire UK at risk of invasion, death, destruction and at the very least the loss of sovereignty, freedom, control and self-determination at the hands of one or more hostile world powers.
The Simple Answer - the Maastricht Treaty establishing the EU
The simple answer explains why the EU embarked on Austerity and it all stems from the implementation of the Maastricht Treaty establishing the European Union and the introduction of a common EU currency, the euro.
Maastricht is the principal city in the southeastern appendix of the Netherlands, 2 miles (3 km) from the Belgian border.The Maastricht Treaty was approved by the heads of government of the states of the European Community (EC) in Maastricht in December 1991. The treaty was ratified by all EC member states - signed on February 7, 1992. It came into effect on November 1, 1993 .
Unlike most EU member states and prospective EU joining states, UK voters were not given any opportunity to vote on this dramatic unprecedented constitutional change.
The treaty established a European Union (EU), with EU citizenship granted to every person who was a citizen of a member state. EU citizenship enabled people to vote and run for office in local and European Parliament elections in the EU country in which they lived, regardless of their nationality. The treaty also provided for the introduction of a central banking system and a common currency (the euro), committed members to implementing common foreign and security policies, and called for greater cooperation on various other issues, including the environment, policing, and social policy. [Britannica].
Though UK Prime Minister John Major had negotiated the opt-out from the looming single currency, in his prior role as UK Chancellor of the Exchequer he advocated the pound joining the European Exchange Rate Mechanism [ERM]. In the ERM national member state currencies floated within narrow ranges against the German Deutsche Mark. As a consequence of "Black Wednesday" Sept. 16, 1992. Hedge funds and the Hungarian billionaire George Soros drove the pound exchange rate down to make substantial profits as the UK government was forced to buy pounds back at a substantial cost. The cost was unsustainable and the pound "crashed out" of the ERM. It was a significant economic shock post-WWII welcomed by euro-hostile Conservative Party members. [AP]
The Complex Answer
The complex answer is also simple to understand but less easy to comprehend how and why what has happened, could have happened. The complex answer delves into levels of stupidity and ignorance or perhaps outright full-knowing intent. Those levels are of public servants, politicians, policy makers, think tanks, lobby groups, journalists, and the commercial and industrial concerns who campaigned to bring us to where we are now against the counsel of wiser voices.
There is also the question of the extent to which the enemies of Western democracies have been able to exploit the West's weaknesses against their modern feeble Western political systems. The issues are for inquiry in another paper. How many European states, without the knowledge of their security services, have had concealed by bad actors within their borders, nuclear weapons of a foreign power or three? Or is that even necessary as it seems possible that subliminal "under-the-radar" attack undermining social structures and values has been underway for perhaps two decades or more. If so, that is either with the consent and connivance of national security services or without, and under their noses without them even noticing.
Consequences For A Wider War in Europe With Russia
To put these matters into context I started writing this paper on the day UK Prime Minister, Sir Keir Starmer, held an emergency summit of European, Canadian and EU leaders. That summit followed directly from the meeting between Ukraine's President Volodymyr Oleksandrovych Zelenskyy and US President and Vice-President Donald John Trump and James David "JD" Vance on Friday 28th February 2025.
The White House meeting was meant to be a precursor to a peace treaty between Ukraine and Russia brokered by the USA. It was meant to be a peace which US President Trump stated could be achieved in a day and one which even an "half-baked negotiator" could achieve. The problems and complexity it seems were underestimated by the leaders of the free world. The meeting was a potential disaster for peace, for Ukraine and Europe. Clearly, something more than an "half-baked negotiator" is needed.
The White House meeting coupled with the outcome of the European leaders' summit takes us ever closer to direct conflict between European states and Russia: to World War Three. So the White House meeting has also been a potential disaster for the USA should events turn out as badly as they might. Hope for the best. Plan for the worst.
As European states are not equipped for a war with Russia and lack the defensive systems against sustained missile and other attack, a war with Russia could rapidly turn to tactical battlefield nuclear weapons and that could lead to all-out MAD - Mutual Assured Destruction.
The words of The Reverend Starmer from the Pulpit of the Leaders Summit were just that: "This is not a moment for more talk. It's time to act. Time to step up and lead and to unite around a new plan for a just and enduring peace." ..... "Not every nation will feel able to contribute but that can't mean that we sit back. Instead, those willing will intensify planning now with real urgency. The UK is prepared to back this with boots on the ground and planes in the air, together with others. Europe must do the heavy lifting," Starmer says Europe 'must do heavy lifting' as he seizes Ukraine peace talks from Trump The Independent David Maddox and Millie Cooke.
Sadly this is mere talk from the 10 Downing Street automated bullshit machine - the "All-mouth-and-no-trousers" artificial stupidity generator.
Why? The UK does not have the war machinery to do any "heavy lifting" nor the income to pay for it. And even if we did, with Gen-Z committed to not fighting for the UK we do not have anyone willing to operate it.
So we can let the Reverend Starmer preach from his Pulpit having had his few days of glory in the White House Oval Office. This follows his pretence of leading Europe as the great new war leader of the Western World in a summit meeting of panicking European leaders who came to London because they don't know what to do either and no one in the EU had the gumption of calling for a summit meeting. But can we let The Rev. Starmer lead us unprotected into a conflict of destruction potentially of unprecedented unimaginable existential severity?
Just in case I do not get another opportunity to do so let me say now "Bye-bye. It was nice [knowing]/[not knowing you]". [Delete as appropriate if, of course, Mr Putin and/or the Reverend Starmer has not managed to ensure your deletion you before you can.]
EU's 2012 Peace Prize - Why Nobel Prizes Are Best Ignored
A minor digression from the main topic, we can see now, standing on the precipice of World War Three, The EU has been the greatest threat to peace and security in Western Europe ever devised by man.
With The EU ironies flow thick and fast, although not as thick as EU intelligence nor as fast as EU bullshit.
A notable irony is that The EU was awarded the Nobel Prize for Peace in 2012, in recognition of the organization's efforts to promote peace and democracy in Europe [Britannica - The European Union].
As the continuing Ukraine-Russia wars and conflicts of 2014 to 2025 illustrate, and the third Balkans war before that, the one factor which maintained relative peace in Europe from 1956 to date was not the European Economic Community, nor the European Community and certainly not their successor, The European Union. The one single factor was economic growth. Whilst it was not the best but in fact the world's worst, European states were too busy getting wealthy to want wars to spoil everything. This was despite the evident fragility of European democracy with dictatorships in the USSR [covering numerous once independent Baltic and Eastern European states], Greece, Spain, Portugal and Yugoslavia and numerous armed conflicts which occurred in Europe on smaller scales. The third Balkans War was subject to NATO military intervention and not the EU.
But the Nobel Committee awarded a prize nonetheless and to as undeserving a recipient as it is possible to imagine. In other words, the Nobel Committee is guilty of the same ignorance and lack of understanding as all others who laud and applauded the European Project.
This award was made 5 years following the EU beginning its rapid acts of self-destructive political, economic and security decline. This was all a direct result of the issues being discussed and explained in this paper bringing us to the precipice of war.
