Monday, September 10, 12
Germany’s court decision and The European Stability
Mechanism (ESM)
September 12th, 2012, will be a constitutional
test for
The European Stability Mechanism (ESM) 500 billion-euro
($639 billion) bond in Germany’s Federal Constitutional Court. The future decision
of the High Court in Germany will be an important jurisprudence in the search
of healthy solution to the euro zone debt crisis. The court will rule on the
constitutionality to transfer national sovereignty to Brussels. The EMS bond
issuance is a violation of Germany’s parliament constitutional authority over
the budget of the most powerful economy in the Euro zone. Argument of the
opponents to this bond is founded on this key element. This is the heart of the
euro crisis; a viable monetary union cannot exist without preliminary transfer
of national sovereignty to a supranational institution. The new dynamics to
create a banking and fiscal union can not be achieved without transfer of
national sovereignty. The decision that will be taken on September 12 will open
a new chapter in this crisis: exercise of national sovereignty to help or
prevent partial or total transfer of sovereignty. The decision to create a
single currency was an initiative of European leaders, but the creation of
banking and fiscal union cannot be effective without the approval of national
parliaments. Now, the voice of the European population will be heard in this
process of unification that marginalized them since the beginning. But, it is probably
too late. The fabric of European unification has been torn by an exacerbation of
the crisis, deep political divisions and suffering of European population. These
consequences will make Mario Draghi’s “irreversibility” of the euro a pure
illusion. An injection of more debt in European economy will not solve the
massive private and public debt in the monetary union. The execution of
austerity measures with a strategy of “cut and dry privatization” is sterile. Buying
bonds will not solve the massive (22.6%) unemployment of the youth in the Euro
zone where more than 18m people are unemployed. An economy with out clear and
define policy to manage the future of his youth is a system in danger. Human
capital is the most important capital in any society, specially the youth. When
this important capital is depreciated by a series of austerity measure, debt
and humiliation, the possibility of collapse of human organization became a
reality. The euro crisis is structural; transformation of industrial capitalism
to financial capitalism was one of the biggest mistakes of the 20th
century. Industrial capitalism is a system of wealth creation in a long process
of maturation of social cohesion and solidarity, but financial capitalism
created a phenomenon of human subordination by creation of massive debt and
short-term profit. Healthy economic growth and human development is not
possible when debt is a key driver of human organization. The euro could
survive, but only if European leaders will have the courage or audacity to
solve the structural problem of the Eurozone. A new bond issuance will only
postpone the collapse of the monetary union and paid back private lenders.
Aboubacar Sissoko
