There is some truth in this ....
The Brexit debate is nothing if not insular. While the business, media and political elite in London obsess over the kind of future relationship the UK should have with Brussels, few seem to have noticed that the EU itself may soon collapse. If and when it does, the fall will be all the more shocking precisely because so many eyes have not been kept on the ball.
The stark truth is that since the financial crisis of 2008 eurozone leaders have tried and failed to put the single currency on a secure footing. President Macron’s attempt to promote a fiscal union is a recognition of this failure and an attempt to do something about it, but his plan has already been killed off by a combination of the German economic policy-making elite and the Italian voter. If it goes ahead at all now, it will be in largely insignificant form.
The attempt to build a banking union is meeting a similar fate. Its bail-in provisions for failing banks are not being consistently implemented and its fund for recapitalising failing banks is far too small. In Italy in particular, the political will does not exist to comply with is strictures. No progress has been made on a European Deposit Insurance Scheme either. And work to build a Capital Markets Union is painfully slow and is, in any case, the work of decades.
The common thread across all these stalled attempts at eurozone reform is a reluctance on the part of national authorities to pursue genuinely European solutions. What this means in practice is that if and when a new crisis comes, there will be no common European response. Individual eurozone countries will be largely left to fend for themselves while EU leaders, as in the last crisis, seek to make decisions largely on the hoof. The question now is for how long eurozone leaders can get away with it? And the answer is not, perhaps, for much longer.
A scan of the horizon suggests it is all too possible to identify the triggers for what could quickly become a eurozone and wider EU collapse. On the economic side one obvious path to crisis is via the onset of a new recession. Eurozone growth is already slowing, and the international environment is clouding badly.
Both a transatlantic trade war provoked by Trump, or a Chinese financial crisis on the back of spiralling public and private debt could cause massive and sudden damage to eurozone economies. A severe recession would in turn undermine the public finances in many already heavily indebted eurozone member states, raise their borrowing costs prohibitively, and wipe billions off the balance sheets of their banks, many of which have been heavy investors in bonds issued by their own governments. Amid falling asset values and a generalised increase in non-performing loans, many banks would be in trouble.
Read the rest:https://capx.co/forget-brexit-the-eu-may-be-on-the-brink-of-collapse/