Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

European Union Challenged from Right and Left

Politics / European Union Nov 18, 2015 - 12:07 PM GMT

By: John_Browne


The heinous ISIS attack in Paris is a game changer in Europe. In addition to the horrific amount of individual casualties, the attack has also threatened severe damage to the long term survivability of the European Union as a political entity. Based on the unpopularity and unfeasibility of immigration controls under the EU's Schengen Plan, the events have opened up the Union to renewed attacks from the right, just as its support from the left is crumbling as a result of opposition to EU-mandated fiscal austerity. This two-front onslaught may be too much for the Union to endure.

Over the decades, Western Europeans had come to rely on the power of the United States to shield them from the chaos of the East. But it has become abundantly clear that America, particularly under President Obama, is not up to the task. Obama's now infamous claim that ISIS was merely a "JV Team" combined with his enduring lassitude in dealing head on with the growing threat of a radical Islamist proto-state in the heart of the Middle East has forced Europeans to consider taking the reins of their own defense.

Unlike the lone wolf attacks in Boston and underwear bombers on planes in the United States, the Paris attack last week (as well as the Charlie Hebdo attack earlier this year) was highly sophisticated. (The explosives used in the attack, while simple to produce, are extremely difficult to handle once they are in their final form. The fact that its use was coordinated in simultaneous attacks while evading detection by anti-terrorist signals monitoring demonstrates an alarmingly high level of planning and control.) Initial evidence suggests the strategy was conceived in Syria, planned in Belgium and executed in France, reinforcing the idea that a high degree of transnational reach was available to the terrorists.

In this environment, EU border control has become an issue of vital security. But the border control regulations that are part of the fiber of the European experiment are simply inadequate to stop the free flow of terrorists, both into the EU from abroad, and within the EU. Germany's stated goal of accepting 800,000 refugees from Syria this year, a policy that throws the door wide open for the immigration of potential terrorists, cannot coexist with the Continent's growing concern about Islamist terror attacks.

In France, President Francois Hollande appears to have wrested from a hesitant President Obama the leadership of a frustrated West. France has now taken the lead in airstrikes against ISIS positions and has shown a greater willingness to work with Russia to do so. However, with regional elections in three weeks, Hollande faces a renewed challenge from Marine Le Pen, leader of the right wing National Front (NF) party. Despite facing charges for an anti-Islamic remark, Le Pen stands to make large electoral gains based on her Eurosceptic anti-immigration stance. The FN has been gaining traction for years, and last week's attacks could provide them with the fuel to become the most powerful party in France.

In particular, it is surprising how the NF has also taken up some of the anti-EU sentiment usually reserved to the left wing. Le Pen has called for greater government welfare spending, austerity reductions, and increased trade protectionism, causes that have been championed by the left, especially in Southern Europe.

Last week, Portugal's center-right minority government led by Prime Minister Pedro Passos Coelho was forced out of office after just two weeks. The prospect of continued EU-mandated austerity forced Coelho's Socialist partners to leave the coalition to join forces with the Communist and Green parties.

Germany, Europe's economic engine long-admired for efficiency, high productivity and sound monetary views, recently has experienced a major internal political shock. Chancellor Angela Merkel emerged last year as the most powerful woman in the world and the undisputed leader of the 503 million people of the European Union, the world's third largest population after China and India. However, Merkel appears to have miscalculated massively with her pledge to accept so many refugees from the war-ravaged Middle East. In response to horrified public opinion, her center-right coalition has appeared to break political ranks, giving the impression even of chaos within Merkel's administration.

The immigration situation is so bad that it has encouraged discussion of a possible early German election. The prospect has been raised that Finance Minister Wolfgang Schaeuble, a very tough moneyman keen on austerity, might re-challenge Merkel for the leadership of their Christian Democratic Union party. Replacement of the pro-EU Angela Merkel by Wolfgang Schaeuble likely would increase austerity pressures and ignite further strong left wing feelings against the EU. Austerity measures in Portugal and Greece are exposing already increasingly deep-seated Eurosceptic feelings.

Further, the planned December EU summit meeting faces increasing opposition to the further integration of a single state. Increased German focus on internal politics will divert energy from forging a closer EU. Without German support, the Eurozone may quickly become a thing of the past.

Rising Eurosceptic feelings and voting power are storm clouds for international investors. Increased doubts about EU solidarity could threaten even the perceived future of the euro, now the world's second currency. Signs of weakening EU cohesion could affect the value of many investments within the EU and around the world. In particular, absent their ECB subsidy, the prices of sovereign bonds of highly indebted periphery EU nations could come under intense pressure and thereby cause liquidity problems for EU banks.

Even before the attacks in Paris, the world appeared to be entering a period of slow growth, with Japan, the Eurozone, and even the United States flirting with recession. Given the slowing trajectory economy, it is logical to suggest that the attacks in Paris could help pave the way for even greater activism from The Bank of Japan, The Federal Reserve, and the ECB. The monetary authorities would surely seek to help bolster economies that are being rocked by fiscal, political and strategic crises. In other words, the era of permanent global stimulus may continue for the foreseeable future.

Subscribe to Euro Pacific's Weekly Digest: Receive all commentaries by Peter Schiff, Michael Pento, and John Browne delivered to your inbox every Monday.

By John Browne
Euro Pacific Capital

More importantly make sure to protect your wealth and preserve your purchasing power before it's too late. Discover the best way to buy gold at , download my free research report on the powerful case for investing in foreign equities available at , and subscribe to my free, on-line investment newsletter at

John Browne is the Senior Market Strategist for Euro Pacific Capital, Inc.  Mr. Brown is a distinguished former member of Britain's Parliament who served on the Treasury Select Committee, as Chairman of the Conservative Small Business Committee, and as a close associate of then-Prime Minister Margaret Thatcher. Among his many notable assignments, John served as a principal advisor to Mrs. Thatcher's government on issues related to the Soviet Union, and was the first to convince Thatcher of the growing stature of then Agriculture Minister Mikhail Gorbachev. As a partial result of Brown's advocacy, Thatcher famously pronounced that Gorbachev was a man the West "could do business with."  A graduate of the Royal Military Academy Sandhurst, Britain's version of West Point and retired British army major, John served as a pilot, parachutist, and communications specialist in the elite Grenadiers of the Royal Guard.

John_Browne Archive

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in