As we have already advanced in «The secret Franco-German Superstate project« and in «The two-speed EU is here«In fact, more and more voices are speaking openly about Europe's hard core project. Moreover, these voices are not merely rumours in the press from dubious sources, but are as significant as the foreign ministers of France and Germany, or the elected representative by the European Parliament to deal with Brexit issues - former Belgian Prime Minister Guy Verhofstadt himself.
As it says in this article, This month, Verhofstadt defined the 6 points on which the new European superstate should be based. The timing for starting work in this direction has been set at just 6 months, far short of the multi-year period that some have talked about.. And the timing of Brexit, whether it is more or less agile, will hasten the path towards the creation of a true United States of Europe, where a hard core of countries will converge, ceding almost all their sovereignty on issues such as the army, a joint FBI, a government with only one president and a dozen ministers, etc.
The document of the Franco-German foreign ministers, Ayrault-Steinmeier, made this clear. Y this Bloomberg chronicle This is confirmed by the fact that the EU is moving forward in the form of a «core» Europe and a group of «associated» peripheral countries. However, the official language used is much softer so as not to provoke market earthquakes. Thus, it is proclaimed that the inclusion of various countries in this hard core that will create the US of Europe will be «voluntary». In other words, no one who already belongs to the EU and wishes to join this group will be expelled in exchange for surrendering their sovereignty. But the key is that the requirements to be able to materially belong to this select club will be macro-economic... and evidently, we have come up against the church. Or rather, it is the peripheral countries that are going to come up against «Trojan» economic criteria.
And the fact is that the United States of Europe will not be able to accommodate, by definition, countries that need lax monetary policies that are incompatible with the needs of the economies of the North. In other words, the official discourse is that in the United States of Europe voluntary entry, provided that the economic circumstances of the applicants are compatible and consistent with those of the hard core of the superstate. -read Germany, France, Benelux, and we'll see if Italy will be hammered in or left out too. In other words, something like Henry Ford's famous reply when he set up the first mass-produced car factory and was asked whether such a system would allow a choice of finishes: «The customer can choose the colour he likes best for his car, as long as it is black».»
The consequences of these two new Europes will be tremendous and diverse: migratory, fiscal, political, but above all economic. It should not escape anyone's notice that two Europes at different speeds require two monetary policies with two different currencies. Perhaps they will both be called Euros as a nostalgic euphemistic reminder, but they will depend on different central banks, they will have different interest rates and very different exchange rates. As different as the performance of their economies, of course. Verhofstadt already warns of this in point 4 of his list of measures to be taken: «Set up a central Brussels Treasury». That is nothing, a monetary authority distanced from the current ECB. An ECB that will probably continue to act as an oxygen cylinder for peripheral Europe, with its consequent extraordinary measures and currency depreciations. Here it is worth remembering that the person who has planned the creation of this «Treasury» in Brussels is none other than the former Prime Minister of Belgium and the European Parliament's brand new representative for Brexit!
The depreciation that the current Euro will suffer as a result of this currency break-up is the one that investors must avoid at all costs. To do so, they must take a series of measures We have been announcing for some years now, as we have long been predicting that at some point the single currency would cease to be the single currency. The monetary situation in Europe is going to become so complicated that it is not only going to be crucial what type of assets we have in our portfolios (including real estate...), but also from which investment vehicles we manage our savings, and also other variables such as their location or ownership. And all this must be done with the strictest security, legality and fiscal transparency, obviously. In short, a puzzle that only some very well-advised investors will manage to solve in time. For the rest, clueless and/or incredulous, their investments and savings will lose as much or more value and purchasing power as the currency that remains, whether it is the Euro or not, for those countries that unfortunately cannot form part of the hard core of the United States of Europe.