Mario Draghi Talks Death of the Eurozone
A former head of the European Central Bank (ecb) is warning that the European Union will not survive as more than a free-trade zone unless it presses forward with political integration.
Mario Draghi made these comments to the Financial Times Global Boardroom on November 8. His prediction that the eurozone would suffer an economic recession by the end of this year made headlines worldwide. Yet his comments on political integration and fiscal union were a bigger story.
Either Europe acts together and becomes a deeper union, a union capable of expressing a foreign policy and a defense policy, aside from all the economic policies … or I am afraid the European Union will not survive other than being a single market. We should worry very much about this.
Draghi avoided the term “fiscal union,” but that is what he was talking about.
Integrate or die: The eurozone is on the verge of a recession because the ecb hiked interest rates to 4 percent in September to fight inflation. Such high borrowing costs are stifling economic activity and increasing unemployment.
Normally, an economy should cut back on government spending under these conditions. But such cuts are hard to coordinate because the eurozone is made up of 19 sovereign governments that share a central bank. No single interest rate makes sense for all 19 countries, so Draghi is seeking a bailout for debt-laden southern Europe generally and his home country of Italy specifically.
But Dutch and German taxpayers cannot bail out southern Europe indefinitely. So either the eurozone will fall apart or it will take Draghi’s advice and adopt an integration scheme involving a single budget—a taxation and spending plan for the whole bloc.
Designed to fail: The Trumpet has noted for years that the euro was designed to fail from its inception. Good economists, like Draghi, know you cannot have a stable monetary union without a centralized body making decisions about the collection and expenditure of taxes. Yet they launched the euro anyway with full knowledge that the new currency would create a crisis that could only be solved by political integration. That crisis may now be here.
The United States became a political reality in 1790 when the federal government assumed in full the debts incurred by the 13 states during the Revolutionary War. Draghi and others like him want the 19 nations of the eurozone to undergo a similar process so they can become the United States of Europe.
In 1967, Herbert W. Armstrong forecast that we would eventually see “the Common Market develop into a United States of Europe.” He cited Revelation 17:12-13 to show that this “United States of Europe” would have only 10 states. This indicates that some nations currently using the euro will refuse to surrender the power of the purse over to a pan-European authority like Mario Draghi is recommending.
Only time will tell which 10 nations will ultimately decide to join the beast power, but the time of choosing is almost upon us!
Learn more: Read “The Greatest Heist of All Time.”