Eurozone Dystopia

Eurozone Dystopia

Groupthink and Denial on a Grand Scale

William Mitchell

Eurozone Dystopia traces the origin of the Eurozone and shows how the historical Franco-German rivalry combined with the growing dominance of neo-liberal economic thinking to create a monetary system that was deeply flawed and destined to fail. It argues that the political class in Europe is trapped in a destructive groupthink which prevents it from seeing their own policy failures. Millions are unemployed as a result and the member states are caught in a cycle of persistent stagnation and rising social instability.

Chapter 6: The Delors Report

William Mitchell

Subjects: economics and finance, political economy, post-keynesian economics, politics and public policy, european politics and policy, political economy


The Delors Committee deliberately excluded the Economics and Finance ministers at the suggestion of Delors himself. He wanted the Committee to ‘consist of the governors of the central banks, who were more independent than the governments’ (Danescu, 2013c: 4). Delors (1989a: 63) noted ‘The creeping paralysis of the Community was the result of the Member States calling into question the Community method for the progressive and limited transfer of national powers to common institutions possessing a real power to make decisions.’ Delors knew that the Bundesbank would not budge at all on the independence of a new European central bank and that it would have been difficult to get agreement if the Ecofin Ministers were involved. Howarth and Loedel (2003: 36) said, ‘National treasury officials from several countries balked at German demands on autonomy and focused a great deal more on the economic side of EMU’. Further, the central bankers had been explicitly excluded from the design of the EMS in 1979, which Delors considered had rendered the system prone to failure. Delors thus constituted his Committee to minimise any (legitimate) discussions of Member State sovereignty and to push through a homogenised Monetarist vision for the new united Europe. By excluding the diversity of opinion, Europe was setting itself up for monumental failure, which manifested in 2008.

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