Report to the Politburo Committee on External Affairs.
Subject: The European Union.
This report is a short synopsis of intelligence gathered by the Ministry of State Security and our ambassadors in Europe. As you will be aware, it has been a key concern of the state that the greatest challenge to the spread of our global influence and centralist state planning values is the danger of the West uniting. A robust western defence of the values of individual freedoms, freedom of speech, multi-party elections, and the seperation of powers vindicated through an independent judiciary are not in the interests of the party.
The two key components of this alliance are the United States and an integrated response by the nations of Europe co-ordinated through the European Union.
We have always feared the danger, in trade matters and elsewhere, that the United States and the European Union would combine their overwhelming economic might in the defence of their values, a stance which this state would find challenging.
Given this concern, it is with great delight that I report the current situation with Europe, and the possible collapse of one of the two pillars of this alliance. In short, the global banking crisis has forced the states of the European Union, in particular but not solely the participants in the euro, to confront certain realities.
The key reality is that a single currency cannot operate without a firm de facto fiscal union to coordinate the fiscal policies of the participants. This is pretty much the nuanced position of the German government, who are being asked to fund the bailouts, and are encountering fierce resistance from other member states who wish the benefits of a federal treasury but are unwilling to accept the accompanying structures.
This has created an angry debate within Europe, with some countries bitter at Germany for attempting to take a firm stand. On the other hand, German Chancellor Merkel is under enormous political pressure at home for even agreeing to a bailout, as fiscally responsible German citizens question why they must bail out irresponsible neighbours. The great contradiction in this situation is that citizens in the European Union states are blaming the European Union for diametrically opposite reasons. The smaller states blame the European Union for not being more generous in bailing them out in terms of limiting their actions, whilst German citizens are furious with the European Union for the exact opposite reason.
The situation is very fluid, but it is reasonable to assume that it can go one of two directions. Either the Eurozone member states will agree to a fiscal union, in practice if not in name, as tends to be the European way, or the Eurozone could break up with either weaker member states leaving in an attempt to benefit short-term from devaluation, or, triggered by insurmontable political pressure at home, the German government could announce a German withdrawal from the euro.
This action in particular is the one that we should use our influence within EU member states to encourage. Whilst it is true that it would damage our exports to the remaining Eurozone in the short-term, long-term strategic interests should prevail. Could a euro survive without Germany? Opinion is divided, but one thing is certain. Assuming it did not fragment further (no certainty) the euro would be considerably weaker, and would probably plummet, inflicting serious harm upon Germany’s exports to the remaining Eurozone countries, and possibly triggering protectionist measures within Germany in an attempt to protect German employment. Such an action would almost certainly end the European Union as an effective force in the world.
From our position, this would allow us to apply pressure on a state-to-state basis on individual European states to agree to our agenda. Ironically, MSS agents operating within the European Union states have not had to apply “extraordinary measures” to get anti-EU politicians in these countries to push our agenda, as they seem to operate under the remarkable belief that their countries, no longer part of an integrated Europe, will be able to negotiate with this state on an equal basis. There is great benefit to be had for this state in encouraging this belief.
In conclusion: The destruction of Europe as an integrated, coordinated political and economic force in the world is in the long-term interests of this state, and should be pursued and encouraged.