Forget negotiating with Brussels; the EU is already dead.

It seems likely that the Italian banking crisis will destroy the EU's foundations before Theresa May concludes her talks with Brussels.

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We now have a clear idea of Theresa May’s aims in her upcoming negotiations with the EU. Though she has been providing clear hints since the Conservative Party Conference in October last year that the Government will be pursuing a ‘hard’ Brexit, the amount of mixed signals since have left us all confused.

But she reaffirmed her commitment to exiting the EU altogether in her interview with Sophy Ridge this weekend. The Prime Minister stated that the Government is not suffering from “muddled thinking” over Brexit. It is apparent that Britain will be quitting the Single Market in its entirety. Considering immigration was an overriding concern for many voters who opted to leave the EU during the referendum last year, Merkel will not provide Britain with any concessions over the free movement of workers. This is making the chances of opting for EEA membership unlikely.

Nonetheless, the EU have only got themselves to blame for this situation. The senior agents ‘leading’ the superbloc- Juncker, Merkel, and their ilk- maintain their dogmatic stances towards the founding principles that helped establish the European Coal and Steel Community. The refugee crisis that engulfed Europe in 2015 has destroyed these principles that were deemed appropriate for the 1950s, but do not apply now. The empty rhetoric of Europe’s leaders and their immature behaviour towards our Prime Minister at the European Council last year will inflame populist parties across the continent. The EU’s GDP has shrunk in size since the 1970s. Is it fair to conclude that the EU is already dead?

This time last year, the prospects of Brexit and Trump were deemed unlikely, and it seems many commentators continue to dismiss the possibility of Le Pen winning the French Presidential Election this year. Nothing remains certain anymore. And if far-right politicians win in France, Germany, Holland, Austria and Italy, the Euro’s death, let alone the EU’s, seems almost certain.

The outcome of Britain’s negotiations remain uncertain, but if Merkel insists on economic suicide at the expense of forcing this country to retain Single Market membership, the EU will suffer. The Office for National Statistics revealed prior to the vote last year that Britain’s trade deficit with the superbloc widened to £24 billion. Economics will trump ideology in these negotiations, and the latter cannot afford to succeed as there is a crisis emerging that could cause the EU’s death before April 2019.

The Italian banking crisis goes unreported by our mainstream media, but the problem continues to determine the single currency’s fate. In the last five years, the sum of non-performing loans has increased by 85%.

On 1st January 2016, legislation came into force which declares that banks’ investors and depositors would suffer in the event of future bailouts. However, bond investors in Italy are also savers who thought their money would be safe with these banks. 14.6% of Italian wealth is tied up in bonds.

As reported in the Financial Times:

“An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period. It would probably lead to the most violent economic shock in history, dwarfing the Lehman Brothers bankruptcy in 2008 and the 1929 Wall Street crash.”

Merkel can protest all she wants about Brexit, but the Italian banking crisis will murder the EU before our negotiations with them are concluded. Combined with the rise of populism, it seems the superbloc is already dead. It’s a matter of when, not if, it becomes official.

 

 

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