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Jay Currie

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Old and New in Europe

In the Netherlands, leaders prepared for a referendum tomorrow that will almost certainly result in a strong No vote. This is despite the fact that all the major Dutch political parties, media outlets, unions and well-known public figures have called for a Yes vote, as they did in France.
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As Canadians demonstrated with the Charlottetown Accord, when political parties, the mainstream media and assorted celebrities get together to try and put over an elite driven deal, the people are rightly sceptical.

The sense of political breakdown seemed paralyzing yesterday.

The continent now seems trapped between citizens who want to stop it from becoming like Britain or Ireland, where commerce and wealth dominate, and those who want to stop it from becoming like France or Italy, where lavish social programs and high taxes dominate.
the globe and mail
The paralysis is the result of two entirely different concepts of the state: "Old Europe" still sees the state as having, magically, resources beyond the simple productivity of its citizens. New Europe - Britain, Ireland and the new members of the EU from Eastern Europe, have a firmer grip on the limitations of the state.

In even the medium term the social programs, early retirement, short working hours and long vacation regimes in Germany and France ensure that these nations will become less competititive on a worldwide basis. However, their populations are in a state of deep denial and will not accept the need for profound structural change. The opportunity to reject the Euro constitution was an opportunity for the French left to pretend that the transformation of the world's economy could somehow be averted. It cannot and while the Euro constitution was only a minimal acknowledgement of the shifting world economy, its rejection as too "Anglo-Saxon", too competitive and smacking of "globalization" simply confirms the decrepit state of the French grip on economic reality.

If this condition persists, the EU will divide into nations which are competing in the world economy and those which are not. It is unlikely that the competitive nations will be willing to subsidize the non-competitive unless the non-copetitive undertake significant economic restructuring. Such restructuring was, at root, what the French were voting against.