This year’s 62nd Munich Security Conference was held from 13th to 15th February and it reaffirmed the splintering of Western alliance. Like last year’s gathering, this year’s conference was marked by a growing divergence between the United States and its European partners. While the U.S. is seeking to change its foreign policy direction and embrace multilateralism, European powers have remained fully committed to the defense of the “rules-based global order.” Indeed, the Conference acknowledged as much in its 123-page report, bizarrely titled, “Under Destruction.”
The document recognizes Washington’s retreat from the rules based global order, its wavering support for Ukraine and its threatening rhetoric on Greenland, all of which exacerbates Europe’s sense of insecurity. On Saturday, 14 February, European Commission President Ursula Von der Leyen took the stage and spoke about “a strong Europe,” that has remained “relentless and creative in the way we’ve maintained our support for Ukraine.” She boasted about, “our €90 billion loan that Ukraine has only to pay back if Russia pays reparations.” That, by the way, implies Russia’s defeat in war, which further implies an indefinite continuation of the war in Ukraine.
Furthermore, Frau von der Leyen reaffirmed Europe’s commitment to a new arms race stating that, “By 2028, defense investment in Europe is even projected to exceed what the U.S. spent on such equipment last year. This is the true European awakening. And this is only the start of what we need to do.” She said that right after she invoked the one-for-all and all-for-one ethos: “It is our collective commitment to stand by each other in case of aggression. … And this is Europe’s meaning.”
And how does Frau president propose to accomplish all that? “For the answer,” she said, “I look to Ukraine. As they say in Ukraine, you change or you die. We must adopt this mantra too. We need to tear down the rigid walls between the civilian and defense sector. Europe is a power house…” This was a strange and chilling rehash of another mantra “they say in Ukraine” – back in 2022, Ukraine’s President Zelensky posed for a photo shoot in an olive green t-shirt emblazoned with a design that read, “Come to the dark side. Dominate or Die.”
Cosmetics aside, von der Leyen’s pledge to tear down the rigid walls between civilian and defense sectors is what should worry the ordinary Europeans, because it implies repurposing the social programs, pensions, health care, education and other benefits that European workers already paid for in order to fund von der Leyen’s future warfare state. “We have all agreed to spend more,” said von der Leyen, forgetting to specify exactly who “we” is.
However, the hair in von der Leyen ointment is the €800 billion-plus money problem: “Some ask whether we can afford this. But I say, we cannot afford not to. And if we get it right – and we will,” promised Frau von der Leyen, “we will turbo-charge a new industrial deal that will not only keep us safe, but be an engine of growth delivering prosperity for the Europeans for decades to come.”
But Von der Leyen’s show of confidence in Munich wasn’t backed up by the ECB President Christine Lagarde who, for some reason, also spoke at the Conference. Ms. Lagarde herself was surprised to find herself there: “It is a mark of how much our world has changed that a central banker speaks at the Munich Security Conference… A decade ago, this would have seemed like a category error.” It was more than that: it was decades of compounding category errors.
The title of Lagarde’s speech was, “Preparing for Geoeconomic Fragmentation,” and its contents largely contradicted von der Leyen’s confidence game with statements like this:
In a way, Lagarde’s remarks seemed to foreshadow monetary disorder, just like the Council on Foreign Relations 1977 report did when it recommended a “controlled disintegration of world economy.” In that report, highlighted recently by Promethean Action’s Susan Kokinda in this superb video, Fred Hirsch wrote that "a controlled disintegration in the world economy is a legitimate objective for the 1980s." One year later, in 1978, Federal Reserve Chairman Paul Volcker quoted that same phrase in a lecture at Warwick University.
In fact, Lagarde admitted that the ECB has taken an active role in European repo markets through ECB’s permanent EUREP facility, which is an admission that Europe’s financial market is already broken, which will eventually lead to monetary disorder. For the moment, the system is kept aloft by large-scale liquidity injections from the central bank, but this situation is unsustainable.
The seeds of monetary disorder are already growing, well before von der Leyen’s ambitious “ReArm Europe Plan” even took off in earnest. That dose of reality from Ms. Lagarde indicates that there’s a deep abyss where Frau von der Leyen is hallucinating a bridge and she is, in fact, pushing Europe into that abyss.
Secretary Rubio, who spoke less than an hour before Ursula von der Leyen, was right to warn the conference’s attendees that his administration “will not be polite and orderly caretakers of the West’s managed decline.”
If the 62nd Munich Security Conference made one thing clear, it is that the European war party is driving Europe down a road to nowhere. In the end, any sensible leader in Europe will have to embrace that reality and heed Secretary Rubio’s call to change course. Ultimately, that is a choice in the same way that the decades of managed decline were a choice, and it should be up to the ordinary Europeans to make.
Unfortunately, that choice won’t be made before the monetary disorder. which will take the form of high inflation and high interest rates, leads the European Union and its political apparatus to its ultimate disintegration.
.svg){kind=logo}
By Independent News Roundup