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Friday, October 18, 2013

Thoughts On The EU's Four Freedoms

The cornerstones of the European Union are often cited as the Four Freedoms (originally set out in the Treaty of Rome). In 1941, Franklin D. Roosevelt laid out his own Four Freedoms for the American Union long before the European Union came into existence. It is interesting to compare the two.

Four Freedoms of Franklin D. Roosevelt
Freedom of speech and expression
Freedom of every person to worship God in his own way
Freedom from want
Freedom from fear

Four Freedoms of the EU
Free movement of goods
Free movement of services
Free movement of capital
Free movement of people

We might have less trouble in the Eurozone today if the Europeans had limited themselves to the Four Freedoms laid out by Roosevelt instead of creating Four Freedoms which, in my opinion, got the Eurozone into trouble.

I have always taken the position that Greece, for one, was not ready for the free movement of goods and the free movement of capital. Far too much capital moved to Greece since joining the EU but particularly since joining the Eurozone. And, regrettably, much of that capital was not used wisely.

Had capital been used more wisely (i. e. more investment and less consumption imports), Greece might be the economic star of the EU today. Unfortunately, much of that capital was used for wrong purposes.

Would that have happened to Switzerland if Switzerland had joined the EU and the Eurozone? Well, Switzerland DOES HAVE these freedoms, even without the EU and the Eurozone, and they are still in good shape. But the Swiss are the Swiss and they have had wealth for a long time and their unfulfilled consumption desires are not out of the ordinary.

Greek consumption desires were beyond the ordinary because the Greeks have not had wealth. It's not really surprising that Greeks went the consumption route once there seemed unlimited access to capital.

What do we learn from this?

Anyone who believed at the time that the Greeks would behave like the Swiss was not thinking very well. At the same time, EVERYONE should have been aware that, if unchecked, the resulting imbalances in trade and capital flows could happen in Greece.

Whose fault is it that nobody did any checking and certainly nobody did anything to reign in undesireable flows of trade and capital once they occurred?

6 comments:

  1. I doubt anyone who matters seriously thought the Greeks would behave as anything but Greeks. Churchill's objective was to keep Greece away from the Russians, for this Poland was sacrificed. The membership of Greece in NATO, the EU and the Eurozone share the common objective of preventing Greece lurching too far to the right or to the left. To paraphrase LBJ - "It's probably better to have them inside the tent pissing out, than outside the tent pissing in."

    CK

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    1. Who are to judge the Greeks -without- any objectivity? Can you tell us your noble origin, only to understand whether you have a totally faulted perception about basic historical facts because of your eccentric thought of being someone special, or simply you don't have clue what you are talking. I already admire you! You are -The-perfect Sir, you must be cloned!

      MS

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    2. He is one of the myriad of self-proclaimed experts on everything greek, a funny sport since the crisis started, but typical of human nature. After all, how many Greeks don't do the same in greek fora? Once upon a time, Socrates, was repeating "i only know one thing, that i know nothing". Nowdays, everyone knows everything about everyone...

      @ Mr. King.

      Churchill-Stalin's percentage agreement, reflected nothing more than the military and geopolitical reality at the time. Greece was since before the war in the "western camp" (was actually allied to the Entente since WWI) and was "guaranteed country" by Britain. Guarantee which of course didn't come into effect, before Greece successfully repelled the italian attack. Otherwise Britain had forgotten about it, giving Greece for a "lost cause" against Italy. Of course, once Greece repelled the Italians, Churchill remembered the "guarantee" and tried to drag Greece into war with Germany, offering a minimal (useless) assistance, which Greece rejected, knowing that 10.000 soldiers were not "salvation" and would only make sure that Germans would attack. Greece accepted later, when Britain offered 50.000 and Germany was obvious that would come to aid Mussolini.

      After the war, the situation was more or less "natural" (there is an old unspoken rule: "terrain occupied in war, you don't cede for nothing", which is also why both Americans and Russians were in race to Berlin and alas, Red Army liberated Poland. That should count for something...). The Yalta agreemend reflected the reality. Russian army had controlled much of what would become the Eastern Block. Britain, a naval power, knew that had no way to effectively take under her sphere of influence lands like Poland or the balkan interior, which even more, was traditionallly tied to Russia (slavs). Greece was also not under russian army control. Russia on her side, wanted to secure her own border, creating a "buffer" with the west. Given also that the King of Greece was

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    3. 2 of 2
      The greek NATO membership had nothing to do with Churchill, it was the Americans calling the shots by then and Greece was of paramount importance to keep land continuity in the SE wing of NATO. In other words, otherwise, Turkey would find itself at all effects, cut off from any other NATO country and in case of war with Russia, Turkey herself would have to fight in multiple fronts and even worse, Russian navy would have access (through bases) to Crete and Dardanelles, blockading any NATO aid towards Turkey and leaving Cyprus cut off from Malta.
      Britain of course also didn't want Greece to go to "hostile" camp, again, because Cyprus (her base in the east) would become "isolated" and potentially influenced by Greece and things with Egypt were going south quickly (Greece and Turkey joined NATO in 1952, relations with Egypt were already deteriorated by 1952.

      And last, Greece and Turkey, were the only possible take off points, for stratefical bombing of south Russia. Greece and Turkey had a nuclear strike squadron with targets inside Russia, that otherwise would be "safe areas" for Russia.
      But thank you for the "Poland" tale too. Untill now i had heard the "Greece was exchange for Romania", "Greece was exchanged for Yugoslavia", "Greece was exchanged" for Bulgaria theory, i must admit, Poland is better, as it gives more "prestige" to the "worth" of Greece :)))


      My theory, as explained above, may be a bit more cynical, but i don't believe in "goodhearted" powers that do something "to prevent lurching too far or right". As a matter of fact, Churchill gave the order to Scobby (British ambassador): "Do not hesitate to shoot to anyone, armed or unarmed that may be. Do not hesitate to act as if you were in occupied city. At the same time Churchill orders Leaper (British ambassador in Athens" to "lock PM Papandreou in a room of hotel Great Britain if necessary", because Papandreou had told Churchill he wanted to resign.

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    4. I fear that you are casting pearls before deaf & blind swine who only see what they want to see & are probably paid to do so

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  2. The four freedoms you cite for the EU are all corporate; they have no relationship to the freedoms required by the ordinary people; they only add advantage to a corporate entity.

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