In all the recent coverage of the negotiations between Greece and the EU over an insurmountable debt, only once did I hear the fact that other European countries have declined - or were still waiting to join - the Euro. It turns out there are seven of them, leaving only eighteen countries that use the European currency: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. If we take away the smaller countries, that leaves essentially Finland, France, Germany, Italy, the Netherlands, Portugal and Spain, seven all told.
The non-Euro countries are not all midgets; they include Sweden and Denmark, Poland and the Czech Republic, Hungary, Romania, Croatia and Bulgaria. If Greece joins them, it’s not the numbers that will be significant, but the geographic location of these non-Euro countries. Essentially, they will include all the former Eastern bloc countries, plus two Nordic countries. With Russia and China standing by to offer assistance via the newly created BRICS bank and the Eurasian Economic Union, what we are seeing is Europe essentially reverting to a division we thought long overcome.
The difference between the satellite countries under Soviet control and those same countries today is that as members of the European Union they are free to choose whether to adopt the Euro or not. But perhaps more significantly, what is to stop them from joining the Eurasian Economic Union?
During the Cold War, Washington touted the danger to Europe of what it called “Finlandization”, a soft takeover through trade. (Finland, that shares an important border with Russia felt it had to tread carefully in the foreign policy area when that border belonged to the Soviet Union, hence the origin of the word ‘Finlandization’.) By mindlessly implementing an aggressive Wall St-inspired neo-liberal policy focusing on privatizations, the EU courted the 2008 disaster, and by implementing the corresponding remedies that hark back to Margaret Thatcher’s TINA (there is no alternative to austerity), it planted the seeds of its demise, leaving Russia as Europe’s savior.
Perhaps it is no coincidence that the Eastern bloc countries are joined by two Nordic countries, which have the most advanced social-democratic systems. As I have written before, and as confirmed by Natylie Baldwin and Kermit Heartsong in Ukraine Checkmated, as well as by the Saker, Putin’s ‘managed democracy’, which the US calls ‘authoritarian’ is a form of social democracy.
While the media continues to spew accusations of aggressive Russian military moves that have no basis in reality, and to warn that a Grexit could lead to the breakup of the Euro, as if Greece would be the only member of the European Union outside the common currency, signaling a rush to the exit, smart investors will take note of the opening of the BRICS development bank whose aim is to function very differently from the IMF vis a vis the needs of its client countries.