Brexit will lead to EU ‘disintegration’ says Yanis Varoufakis
The EU has struggled to grapple with its coronavirus vaccination programme misgivings this week, forcing a humiliating U-turn after it threatened to cut off vaccine supplies to Britain. Brussels has since attempted to give credibility to its position, this time lashing out at vaccine providers for being too slow in delivering doses. The EU is nevertheless confident it will vaccinate 70 percent of the adult population across member states by the end of summer.
Countries are now effectively at the mercy of Brussels as the EU negotiated on behalf of member states, to avoid competition and help reduce costs.
It has left European governments helpless and idle, waiting to vaccinate their populations, with some countries having already been able to get the programme underway.
These were in minute numbers, however, compared to the UK, who opted to not be a part of the EU vaccine scheme last year.
The vaccine crisis, many have noted, exposes a pressing fault in the EU’s makeup, with scores of states bound to the bloc, often at the mercy of decision making in Brussels.
Yanis Varoufakis: The Greek politician said the eurozone will inevitably implode with debt
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Most countries are already in the eurozone – the monetary area in which 19 states have adopted the euro – appear to be in debt, often worsened by the European Central Bank.
Robert Tombs, the renowned British historian, told Express.co.uk that this left almost every country “trapped” and bound to the EU.
Many of these countries have been forced to seek bailouts and loans with hefty interest rates attached by the EU Bank and the International Monetary Fund (IMF).
Greece is perhaps the most salient example. In order to avoid default following the calamity of the 2008 financial crash, it loaned money from the EU and IMF, and is still to this day paying back a sum in the billions of euros.
Robert Tombs: The historian said the eurozone has wedded European countries to the EU
The eurozone’s debt in general has soared in recent years – made worse by the pandemic – increasing in 2019 to 95.1 percent of collected GDP.
The former left-wing Minister of Finance for Greece, Yanis Varoufakis, predicted in 2016 that this debt, as well as debt around the world, will eventually implode outfits like the EU.
In a Ted talk, he said: “Over the last three months, in the US, in Britain and in the eurozone, we have invested collectively $3.4trillion (£2.5tn) on all the wealth producing goods.
“Things like industrial plants, machinery, office blocks, schools, roads, railways and so on.
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“$3.4tn sounds like a lot of money, until you compare it to the $5.1tn (£3.7tn) that has been sloshing around in the same countries, in our financial institutions, doing absolutely nothing during the same period except inflating stock exchanges and bidding up house prices.
“So, a mountain of debt and a mountain of idle cash form twin peaks, failing to cancel each other out through the normal operation of the markets.
“The result is stagnant wages.
“More than a quarter of 25 to 54 year olds in America, Japan and Europe are out of work.
Recovery package: Most of the hardest hit countries in Europe are in the south
“And consequently, low aggregate demand, which in a never-ending cycle, reinforces the pessimism of investors, who, fearing low demand, reproduce it not by investing.
“It is exactly like Oedipus’ father, who, terrified by the prophecy of the oracle that his son would grow up to hill him, unwittingly engineered the conditions that ensured Oedipus, his son, would kill him.”
Much of the eurozone is set to plunge into even further debt following a vast coronavirus recovery package that was passed through Brussels last year.
Favoured by German Chancellor Angela Merkel and French President Emmanuel Macron – who are largely seen as spearheading the EU – many European leaders were hesitant to agree to the idea of bailing out some of the continent’s worst-hit countries, mostly in the south.
Rishi Sunak: Britain itself is drowning in debt
This was particularly true of the “Frugal Four”, led by the Netherlands’ Prime Minister Mark Rutte, who has since resigned.
He pressed for more loans than grants, and for structural economic reforms in order not to lose out on money.
Yet more EU stalling has seen delays hit the stimulus fund, with many countries still struggling to cope with dire economic fallout from the pandemic.
Mrs Merkel and Mr Macron lashed out at Brussels for being “too slow” to get the money out.
French finance minister Bruno Le Maire suggested that EU bureaucracy was to blame.
Ultimately, debt in the eurozone is expected to continue to rise, inflating costs across the continent, and often devaluing the euro in hard-hit countries like Greece, Italy and Spain.