North-South And Secession

Nope this isn’t an analysis of the War Between the States in the US.  Although that war and its causes and aftermath might offer some useful guideposts for our friends across the pond.  Let’s talk about the current conflicts and disagreements among the Eurozone countries and their current dilemma in working out a solution to the disparity between the countries who follow a relatively frugal approach to their fiscal policies and those that have a much more laizzez faire attitude about the seemingly endless flow of funds from government to support their lifestyle.

You have read accurately that there is a divide already existing between the countries of the Eurozone on a North-South axis.  Those to the North are generally in much better shape than their neighbors to the South.  The southern edge of Europe covers Greece, the Balkan countries, Italy, Spain and Portugal.   Of course Ireland and Iceland have had their difficulties but those appear on the mend and their debt problems were small compared to the avalanche of debt bursting out of the southern countries now.  Those are the areas of immediate and longer lasting concern to the Eurozone nations because of their debt loads relative to their ability to service those debts even at the still historically low interest rates for their soverign bonds.   Do you think it is mere coincidence that the northern tier of countries are in better shape than their southern neighbors?

For several centuries this divide has been true.  In Roman times it was different and it was still true that the South was dominanat during the Medieval period but those days are longs gone.  Italy as a single entity has only been around about 150 years.  It as a nation is younger than the US.  Before Garibaldi it was a hodge-podge of principalties and city-states going back to the Dark Ages.   All of Europe follows essentially the same welfare-state philosophy but by culture and tradition the northern tier has been more industrious and hard working than their sourthern counterparts.  Blame it on geography or climate or any other factor you wish but those are the facts.   The Southern group likes to bask in the sun a bit more and expects more from the government and other people’s money.  The northerners are inclined to be more independent and self-sufficient and even though they do have welfare states they have over the decades limited to reach of the government share of their economy and culture.  This barrier became most clear with the advent of Thathcher in Great Britain.   But then other more “conservative” governments and attitudes slowly infused the body politic in Europe in the North anyway.

The Eurozone itself was a creature from the leaders of the Northern tier of countries.  All the southern countries were an after thought.  France, the Benelux countries and Germany were the original backbone and still are of the Eurozone.  The bulk of the rest of the economic strength still comes from the North with Finland, Sweden, the Danes and even Great Britain even though it is not part of the Eurozone currency system but it is a vital member of the Euro community.

Just as we had our divide and war between north and south it is nor beyond the pale that the North and South in Europe will likewise break and there will be secession talk.  In fact there has already been secession talk but it isn’t called that.  Italy is a good examplar of this situation.  It also is divided along north/south communities.   The south of Italy has since its inception been the economic drag on Italy.  It produces at best around 30% of GDP but receives more than 60% of government largesse.  The north is more urban and industrial and has been for a long time.  The people there are the worker bees and the southerners are the beneficiaries of politicians payoffs in exchange for votes. (sound familiar?)   In fact this discontent became so intense that it resulted in the formation of the Norther League.  That political movement was and is centered in the major northern  industial cities of Italy.  There was and still is talk of breaking the country into two parts, separating the North from the South.  This polical party was the base that led to the victories of Berlusconi of recent note.  The political rise of the Northern League was not so much about taxes, policy or the welfare state; it was about not having to carry the South anymore on their backs.  They believed the South didn’t fairly contribute their fair share to the economy and that they took out far more than they put into the hopper.  Those are indeed the facts.  The South of Italy was getting a free ride on the backs of others and spending other people’s money.  The government built “infrastructure” projects with alacrity and assured the North this would benefit everyone.  But after several decades of this p0licy the facts on the ground haven’t changed.   The South is still a drag on the nation.

Much of the current debt of Italy has been accrued due to the enomous sums it has expended in the South for these projects.   If you read the back pages and follow some of the foreign news sources you will note these complaints of the North.  The same complaints have application generally to the northern tier of Eurozone countries.   Brussells has been spending far more money in the “underdeveloped” southern tier of countries and many in the northern areas feel that they are being short-changed.   Who knows if Italy will divide at some point but the odds are surely much higher that the Northern tier of the Eurozone will decide at some point in the near future that the cost of including the southern tier of countries is not worth the candle.   There won’t be a war but intense and bitter acrimony and trade wars could be on the European horizon and the North could decide to secede and form its own smaller but much more vibrant and healthy trade and currency economic organization.  Let’s see how it plays out over the next decade.  The European problems will  not be solved anytime soon.   There is a limit to how much of the debts of the South the North will pay and when that is reached then scramble to re-shuffle the deck will begin.

The recent recess appointments by BO are an assault on the Constitutional relationship between the branches of government.  It goes far beyond party or ideology.  The painful and slow process of our divided government has served us well for over 200 years.  We have a President who must follow and obey the Constitution; he is not a King who rules by edict.  Where is Robert Byrd when we need him?  I didn’t even like his politics at all but I will admit he was an ardent defender of the Senate and its privileges and Constitutional powers.  He would have screamed at this action.  www.olcranky.wordpress.com

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