Our story begins at the close of World War II. As that war drew to a close in 1945, the leaders of Western Europe came together and surveyed the wreckage. For centuries Europe had been racked by conflict, centered mainly between France and Germany. As an example of the level of carnage, consider that the French and Germans lost over 800,000 men (dead, wounded, missing and captured) in one single battle – the multi-year Battle of Verdun in World War I. By way of comparison, the Verdun casualties were double that of American loss in Vietnam dwarf American casualties in either the Korean Conflict.
The Europeans said “never again!” Thus the EU was born. In 1957, the European Economic Community (EEC), also known as the Common Market, was formed. The intent was not purely trade liberalization, but to bind Germany to Europe so tightly that major European conflicts could never happen again. The EEC later became the European Union (EU). Further economic integration occurred in December 1995 when many EU countries adopted the euro as a common currency.
This strategy of peace through economic integration has largely succeeded. If the Germans were to mobilize the Bundeswehr today and announced to the troops that they were going to war with France, the men would all laugh and go home.
That is the miracle of Europe.
As players on the European stage manoeuvre for advantage, we must not forget the Big Reason for the formation the European Union. Also don't forget the terrible price that could be paid by future generations should the current crop of leaders fail.
Lest we forget.
Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.
3 comments:
Mr Cui--
1) Quite sure it was the stalemate between NATO and the Warsaw Pact that prevented another European continent wide war.
2) Most historians agree that the massive transfer payments Germany made as war reparations were a major contributing factor, if not THE factor, that caused Hitler's rise to power and World War 2 in Europe. For France to suggest repeating this mistake today is just asinine. That won't save Europe.
3) The massive money printing done under the Weirmar Republic to make the war reparation payments caused crippling inflation that no one in Germany can forget two generations later. Suggesting the ECB repeat this mistake is equally asinine.
4) Most of today's German taxpayers were not even alive for WW2, much less decision makers responsible for the atrocities. Blaming a 30-something German today makes no more sense that punishing French citizens for the crimes of Napoleon, or today's Italians for the Roman Empire's aggression.
Everything the EU "leadership" is proposing, and everything the moron banking community is proposing -- boils down to irrefutable evidence that most people do not learn a thing from history.
Macro Rants -
I don't know where to start as you totally misunderstood my post.
I am in no way shape or form blaming anyone for the wars in the past 200 years. The fact that the Germans and French were antagonists is purely a byproduct of geography.
The EU and past forms of the EU, e.g. EEC, were designed partly to bind the French and Germans together so that war could not happen again. In that, they succeeded at a cost.
There were many factors that led to Hitler's rise to power. Reparations was one. So was the onset of the Great Depression. Also we have to consider other terms of the Treaty of Versailles that engendered resentment and humiliation in Germany. The rise of the Soviete Union and the threat of Communism was another factor.
While the EEC and the EU undeniably helped provide stability to post WWII Europe (and that's a nice analysis on the part of Mr. Hui), one can't help but wonder what the effects might be of the current situation, with other European countries once again coming to Germany asking for money.
I remember a quote from a news story last spring with some German offical saying "German taxpayers are not going to pay for Greek workers retirements." Well, they're not going to be happy anyway.
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