Why the European Union was Doomed from its Origin

Those knowledgeable about the influence of monetary sovereignty appreciate that removing it from member states, as the European Union (EU) did, makes a significant difference. Greece, no longer a monetary sovereign--uses euroes rather than drachma--paid as much as 35% on its national debt when its debt-to-GDP ratio approached 125%. I've read Greek unemployment was worse than it was in the Great Depression. On the other hand, Japan--a monetary sovereign which issues its own currency (Yen)--has national debt that's nearly double (240% of GDP) and pays near zero on that debt. Monetary sovereignty matters. Sovereigns can always repay their debts, and never can be involuntarily insolvent.

Here are the origins of this debacle (hoisted from comments on Naked Capitalism):

Terry Flynn: A popular view is that Thatcher was biggest cheerleader for the single market. I don’t know if the “lack of direct democracy” in many key European institutions is a by-product she approved of

The ‘popular view’ that Thatcher, the Tories, and the UK led — or contaminated–the EU into neoliberalism path is bunk. The actual history of the EU is that from its beginnings during the 1950s-60s as the European Coal and Steel Community, it was shaped by specific German neoliberal figures — ordoliberals — who were high-level members of von Hayek’s Mont Pelerin Society, ffs, to be a vehicle for imposing ordoliberal/neoliberal conformity.

Von Hayek’s “The Economic Conditions of Interstate Federalism,” explicitly calls for the free movement of capital, goods, and labour – a “single market,” in von Hayek’s own words – among a federation of nations as a means to severely restrict the economic policy space available to democratic governments against the market, and subordinate employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

https://fee.org/articles/the-economic-conditions-of-interstate-federalism/

To that end, Wilhelm Röpke was personal advisor to Konrad Adenauer, the West German Chancellor and his Minister of Economics in the late 1950s when the EC was coming together and then left to be president of the Mont Pelerin Society in 1961-62. Ludwig Erhard, the second West German Chancellor from 1963-66, was a Mont Pelerin Society member from 1950 on.There were many others. Not incidentally, Röpke was also known for his pro-apartheid views on South Africa, publishing in 1964 ‘South Africa: An Attempt at a Positive Appraisal,’ which argued that apartheid was justified because the‘South African Negro’ was of ‘an utterly different race.’

Later, Robert Mundell, the father of ‘Reaganomics’, was chief designer of the Euro, introduced in 1999. He’s on record boasting about how it would work to ‘discipline’ the European working classes.

https://www.theguardian.com/commentisfree/2012/jun/26/robert-mundell-evil-genius-euro

All this is what you see in the modern day EU. Article 107 TFEU allows for state aid, for instance, only if it’s “compatible with the internal market” and doesn’t “distort competition.” Whether or not state aid meets these criteria is at the sole discretion of the European Commission – and courts in member states are obligated to enforce the commission’s decisions.

Likewise, with very limited exceptions (such as the ECB on euro matters), the Commission has the monopoly of proposal of new laws. Other institutions (including EUCO) may request the Commission to take action but the Commission cannot be forced to take it. And if it does not make a proposal, there cannot be a new law.