Tuesday, 6 March 2012

The euro countries move towards a fiscal union – an eschatological perspective

On Friday, 2 March 2012, 25 of the 27 EU countries accepted a fiscal compact that has important implications for the future of the European Union.  It allows the 17 euro countries (who share the euro as currency) to partially upgrade their monetary union to a fiscal union.  This effectively brings about a multi-speed European Union – some countries like Britain sit out while the others proceed to further integrate their economies.  I have foreseen these events in my book on the Arabic uprisings in August 2011 (“Die Arabiese Opstande”). From an eschatological perspective (i.e. the study of the end times), this event is of great importance since it could well be an important step towards the eventual formation of a restored Roman Empire, which will arise on the scene in the end times according to Bible prophecy.

After the British prime minister David Cameron stormed out of a meeting of European leaders on 8 December 2011, it buzzed in media circles about a so-called “multi-speed” European Union (EU) coming into being.  This event, which left Britain on the sidelines, has been described as “a major turning point in the history of the EU”. Since then the EU has been divided into two groups, namely a core that proceeds with further integration and an outer group, who follows Britain’s lead to sit out. With the signing of the fiscal compact on 2 March 2012 this multi-speed Europe is about to become a practical reality.

The basic framework of this multi-speed EU appeared years ago when a group of EU countries introduced the euro as currency – leaving the other EU countries whose economies were not ready, outside the eurozone. This resulted in two groups of EU countries, namely those that introduced the euro as currency (there are 17 euro countries at the moment) and those that kept their own currencies (there are 10 such countries at the moment).  This arrangement was agreed to within the framework of the EU and is regulated by European treaties that all EU countries agreed to.  The only difference today is that Britain does not aspire to join the eurozone any more.  As a result, Britain's objectives have become more and more removed from those of the other EU countries.

What makes the present fiscal compact, called the “Treaty on Stability, Coordination and Governance”, so important, is that it enables the other EU countries to proceed with the integration of their economies, even giving the European Commission some oversight over their budgets.  And this happens in spite of Britain’s opposition to it.  It allows a core group of countries to proceed with further integration – although not within the normal EU framework.  Even so, they may use the institutions of the European Union, like the European Commission and the European Court of Justice, to enforce this compact.  This development creates a precedent that has important implications for the future of the EU.  I will now discuss these as well as the eschatological implications thereof.

The fiscal compact of 2 March 2012

The fiscal compact that was signed by all the 17 euro countries, as well as eight other EU countries (excluding Britain and the Czech Republic), includes the following:

1.    The goal is to foster greater coordination of budgetary policy throughout the EU.  This will stop euro countries from falling into excessive debts that could endanger the future existence of the euro.
2.    All euro countries are compelled to write into law (preferably into their constitutions) that they are forced to pass “balanced” budgets.  Their debt may not exceed 0.5% of their GDP (gross domestic product).  These should include automatic brakes which, when activated, would lead to a correction.
3.    The European Commission will monitor the enforcement of the compact and countries that are suspected of bending the rules, could be brought before the European Court of Justice, who can impose a fine of up to 0.1% of GDP.
4.    Only the countries that sign the compact into law can borrow money from the European Stability Mechanism (ESM) – a permanent fund that is financed by the central banks of EU countries.  It will be established in June 2012.  This will force the EU countries to approve the compact as soon as possible.
5.    The compact will come into force when 12 of the 17 (i.e. 70 % of) euro countries have approved it.
6.    Although it is an intergovernmental treaty that is agreed to outside the formal EU treaties, it is compatible with EU law and is effectively managed by EU institutions.

The main reason why Britain rejected this compact, is that they are not willing to allow the European Commission to have oversight over their budget – and eventually also over financial institutions like the Bank of England in the City of London. (On the City, see my article posted on 8 January 2012 on this blog, “Predicting a war against Iran? An inquiry into war and peace cycles”.)  Although Britain could in principle veto the use of EU institutions to monitor the compact, they did not do so because that would have excluded them from any further involvement in the ongoing process of fiscal integration in the EU.  Such a step would also not stop the other countries from proceeding with their plans – it would only result in Britain losing its influence in the EU.

The implications of the fiscal compact

Although this compact will not result in a full fiscal union whereby the whole eurozone is managed as a single economy, it is still an important step in that direction.  Mario Draghi, the president of the European Central Bank, said: “It is the first step toward a fiscal union”.  Various other measures are also foreseen for the future, including the issuing of euro bonds, underwritten by all euro countries, the enlargement of the ESM (the stability fund) to E 1000 billion, an expansion of the role of the European Central Bank (ESB) to become a lender of last resort (the ECB is already involved in buying the bonds of euro countries like Greece and Italy), as well as some form of financial tax.  Countries like Germany and France do not want to move too fast with this process of fiscal integration since that will reduce the pressure on countries with large debt burdens to restructure their economies.  The sword that hangs over those countries because of the present financial crisis is forcing them to make the necessary structural corrections that they will not otherwise do.

The most important outcome of this compact is that it allows a group of countries within the framework of the EU to proceed with further integration in spite of the opposition from other countries.  Although the compact falls outside the formal EU treaties, EU institutions like the European Commission, the EU Court of Justice en possibly the ECB (the central bank) are nevertheless involved in the implementation thereof.  It may well be that this compact sets a precedent according to which some euro countries could integrate even further in future, and still make use of EU institutions.  In this regard one could remind oneself of the objective stated in most of the previous EU treaties, namely to move towards “an ever closer union”.  One could think that a group of countries would eventually take the step towards a full political union, forming a “United States of Europe”.

What is also important, is that this treaty (in contrast with the EU treaties) come into force when enough (i.e. not all) countries have approved it. When the parliaments of 12 euro countries have approved it, it will come into force.  This solves the problem of treaties being stalled when they are rejected in some EU countries whose constitutions require referendums.  It is expected that other similar treaties will follow this example in future.  This will result in an acceleration of the process of integration within the framework of the eurozone.

Another important precedent set during the euro crisis is that unelected leaders came to power in those countries overwhelmed by the crisis, namely in Greece and Italy.  This could in future open the door for other leaders to use crisis situations to come to power.  Such crises would not necessarily be of a financial nature – think of military crises.  In the time of the Roman Republic, it was exactly during periods of military crises that the generals took over the reins – and this led to the establishment of the Roman Empire.

An eschatological perspective

Although this compact is but a small step on the way, the implications and the example set by it, are of great importance when it comes to the eschatological study of end time events.  In my book, “Die Arabiese Opstande” (The Arabic Uprisings) (Aug. 2011), I proposed that such a multi-speed Europe would come into being, allowing the euro countries to proceed with fiscal integration in spite of British resistance.  This is exactly what happened since December 2011.  I also mentioned in an article written during the height of the financial crisis (in contrast with the view of many other observers) that the crisis will not lead to the disintegration of the eurozone; it will rather lead to further integration of the eurozone (see the article posted on 10 October 2011 on this blog: “Gaan Griekeland in die Eurosone bly? - 'n eskatologiese perspektief). This is exactly what happened.

But why is a multi-speed EU important from an eschatological perspective?  The answer is simple: it allows some EU countries to proceed with integration, leaving others behind.  This could eventually lead to ten countries in the heart of Europe deciding to proceed towards full political integration – which will be a fulfilment of Bible prophecy that a kingdom of ten (symbolized as ten toes or horns) will arise in the end times within the framework of a restored Roman Empire.  Geographically speaking, the EU is already beginning to look more and more like such an empire. (See my article on 22 January 2012 on this blog: “Die tien horings van Daniël 7, waarna verwys dit?”).  When these countries appoint a leader over them, he could very well be the final Antichrist. In this regard, it is remarkable that the recent appointment of unelected leaders over some euro countries could set a precedent for the countries that proceed with political integration, to also appoint a leader over them. If the events from the time of the Roman Empire are an indication, one can expect someone like the Roman emperors of old to eventually come to power in the EU.

Final thoughts

The fiscal compact that was signed on 2 March 2012 is a very important event in the framework of the EU.  It allows a core group of countries to proceed towards a fiscal union, with their economies centrally managed – and that in spite of Britain's opposition.  It set a precedent according to which an even smaller group of countries could also eventually integrate politically.  It is in this regard that these events correspond with our expectations about the fulfillment of Bible prophecies – according to the prophecy in Daniel 7 about the ten horns (or the prophecy in Daniel 2 about the ten toes) there will eventually be a group of countries that will rise within the framework of a restored Roman Empire.  Furthermore, the appointment of unelected leaders in some euro countries sets a precedent according to which countries that integrate politically, could also appoint a leader over them.  This will agree with the prophecy according to which the mentioned ten “kings” will appoint a leader over them.  When such a person is appointed, and he (maybe not the first one to be appointed) begin to operate like the emperors of old – being above all presidents and kings – we can expect the time of the final Antichrist to be at hand.

Although the time of the end has not yet arrived, it is clear that the current events could be an important step in that direction.  We will have to wait and see how the situation unfolds further, and whether these prophecies will be fulfilled in our own time.

Author: Dr Willie Mc Loud. (Ref. wmcloud.blogspot.com)

1 comment:

  1. Several events must take place before the Beast and his ten horns can invade an unsuspecting Jerusalem in the middle of the 70th week (Luke 21:20, Ezek. 38:1-14). The Devil must be cast out of heaven. Then Michael will stop restraining the mystery of lawlessness from attacking Israel (Dan. 10:21; 12:1, Rev. 12:6-12). Once the restrainer is taken out of the way the 4th seal will open and Death and Hades are given the power to kill one fourth of mankind through the two beasts (2 Thes. 2:6-7, Rev. 6:7-8; 16:13). This is when Satan gives his power, throne, and authority to one man, the Beast (Rev. 13:2-7). The False Prophet will exercise all the authority of the Beast when in his presence (Rev. 13:11-13). These four events take place in the middle of the 70th week. The next event on God's end time calendar will initiate the days of the Great Tribulation.