A “brutal lesson in geopolitics”
France, whose contract to deliver 12 submarines to Australia for $A50 billion was unceremoniously ditched in the process.
Consider the ambition to create a euro-dominated payments system that allows companies and states to trade independently of the US-dominated financial system. For such a system to work, it must be liquid, which means it must be able to attract other people’s money – Japanese, Chinese, Indian, and certainly US money.
This in turn requires that non-Europeans holding loads of euros have a euro-dominated safe asset in which to invest their stash for a day or for a decade.
To prevent the type of humiliation to which Trump subjected Merkel, Europe needs a eurobond. To prevent humiliations like the one Biden has inflicted upon Macron, it needs a common military.
But eurobonds and a common military require Europe’s national ruling classes (particularly those in creditor countries) to give up their own exorbitant power; and to embrace, instead, the radical idea of transnational voting for a transnational federal government.
Yanis Varoufakis Project Syndicate 23 September 2021
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