phone icon (877) 258-0181

Category: Economics

Who will save the European Union?

In this uncertain world it’s good to have some certainties. One certainty is that under its new President-elect, Ursula von der Leyen of Germany,...

11 September 2019


featured video image

In this uncertain world it’s good to have some certainties.

One certainty is that under its new President-elect, Ursula von der Leyen of Germany, the European Union (EU) is more determined than ever to get greater integration of its members. Von der Leyen was a little-known figure, even in Germany, and was plucked from the ether to take charge of the lives of more than 513 million people.

But she had the great advantage being the longest-serving member of Chancellor Angela Merkel’s cabinet, spending the last six of her 14 years in government as Germany’s defence minister, and is thus, from the viewpoint of the most powerful member state of the EU, a reliable pair of hands. The EU is going to merrily carry on sailing in the direction it chose more than 60 years ago. If the EU was a person it would be looking to its pension.

You can of course be elderly but perhaps avoid dementia if you exercise, stay alert, and keep abreast of developments. If you slump in an armchair and only listen to stuff that suited you decades ago, you’re going to wither. Is the EU going to wither or flourish? The betting has to be on the former right now.

Rose Ladson – as von der Leyen was peculiarly known in London in the 1970s when she studied at the London School of Economics – announced the EU’s new Commissioners on Tuesday this week. In her choice (here’s the list of new commissioners) there are no surprises; the names could have been pinched from her predecessor’s playlist. This is understandable perhaps, as von der Leyen has form when it comes to plagiarism. She studied medicine at the Hanover Medical School in 1987; after she was accused of plagiarism, an investigation in 2016 judged that von der Leyen had indeed plagiarised large amounts of the thesis she submitted for her doctorate, but it did not revoke her degree.

All the new Commissioners could be described thus: “Virtually unknown to the wider public, she is adored by EU integrationists, having worked for former European Commission President Romano Prodi, led France’s European Movement and founded the federalist Spinelli Group in 2010.” That’s Politico’s brief guide to Sylvie Goulard, “the ultimate EU insider” according to Politico. Goulard gets the job of leading the bloc’s decisions on industrial policy, defence and the single market.

Phil Hogan, an Irish politician and a very strong critic of the UK’s decision to leave the EU, has been given the Trade portfolio, which will be a sensitive post in the next few years. He attacked the current UK Prime Minister as being “unelected”, although no-one elected Hogan to become a Commissioner either. Commissioners are not elected but selected, in a process that almost defines opacity. Not so much a democratic deficit, more a black hole.

The EU’s 28 member states – including the UK for the time being – are all governed by the European Commission, which initiates organisation-wide legislation. It is indisputable that the EU has come a long way from what it used to be, but the 1958 Treaty of Rome, which established the EEC, forerunner of the EU, certainly agreed to lay the foundations of an “ever closer union” among member states. That’s the grand ambition.

It is an ambition that is not shared by more than half of the UK’s citizens however, and the jury is out for around half of the EU’s citizens from other countries, according to one of the most authoritative and independent research organisations. The Pew Research Center published in March this year a lengthy survey of opinions from EU citizens which found that, as it put it, “Europeans Credit EU With Promoting Peace and Prosperity, but Say Brussels Is Out of Touch With Its Citizens”.

So what does it matter if the EU is “out of touch” with its citizenry? What’s that got to do with gold? Quite a lot, actually.

The EU’s economic future desperately needs some new thinking. Larry Elliott, the economics editor of The Guardian, put it well when he wrote in March this year that “the assumption was that the single currency [the euro] would make the single market work more efficiently and so generate faster growth. It hasn’t happened.” When it comes to producing economic growth the EU is not just elderly but sclerotic, flat out of ideas.

The same day that von der Leyen announced her new Commissioners, Citigroup coincidentally prophesied that gold could hit $2,000 an ounce within the next two years, in a world of abysmal economic growth, low-to-negative interest rates, and growing demand for gold by central banks. With the tired ‘talent’ now in charge of policymaking wherever you look, gold will easily go higher than Citigroup’s guess. Batten down the hatches; get your Glint card and stash some gold for yourself.


Sign up to get the latest Glint news

Receive the GLINT newsletter with the most popular content, platform updates and software guides.