Europe was already well into the minefield before the Brexit vote. The UK’s decision may have made a bad situation more volatile, but Europe would still be in a fix if “Remain” had won.

1. 13 Sad
Realities of the
European
Union

2. Let’s start by looking back at 1914.

3. Europe was relatively
peaceful at that time, until…

4. Gavrilo Princip assassinated
Archduke Ferdinand of the
Austro-Hungarian Empire.

5. This was the beginning
of World War I.

6. By 1916 World War I
developed into the worst
war Europe had ever seen.

7. Just two decades later,
Europe was torn apart
by a second world war.

8. By the end of the war, millions
were dead, and no one wanted
to fight ever again.

9. Therefore, agreements were
designed, to prevent another
and potentially even more
disastrous European war.

10. Those agreements
would evolve into today’s
European Union.

11. The thinking was that nations
bound together economically
would have less incentive to
destroy each other.

12. The assumption, however,
has proven to be wrong.

13. Let’s take a look 13
sad realities of the
European Union

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15. Refugee Crisis
1.

16. Refugees from Africa and the
Middle East, are struggling
across the Mediterranean.
Thousands are dying as their
boats capsize and sink.

17. The EU is trying to accommodate
those whom it can’t stop.

18. Greece in
Shambles
2.

19. Greece is chafing under EU-imposed
austerity as its economy endures
depression-like conditions.

20. Spain and Portugal are
wondering if they are next.

21. Growing Division
3.

22. Poland and Hungary are fighting
against EU mandates that disrupt
their internal affairs.

23. Wild Deficit
Spending
4.

24. Several EU governments are
engaged in deficit spending
that exceeds EU guidelines.

25. The EU’s inability to stop them has
continued to expose its inability to
enforce its decisions.

26. ZIRP and QE
5.

27. The European Central Bank is
holding interest rates below
zero and buying private assets
with public money.

28. It continues to prop up insolvent
banks that must fail if the Eurozone
economy is to ever recover.

29. Confrontation
with Russia
6.

30. Russia and NATO are facing off in
the Baltic Sea, forcing already
stretched governments to boost
defense spending.

31. Increased
Terrorism
7.

32. ISIS-sponsored or ISIS-inspired
terrorists are plotting attacks like
the ones in Nice and Brussels.

33. End of
Schengen Zone
8.

34. Border checks are in force within
the supposedly free-travel
Schengen zone countries, making
one of the EU’s greatest
achievements into a mockery.

35. Brexit Copycats
9.

36. Sizable minorities or even
majorities in other European
countries are agitating for
their own exit opportunities.

37. Think Catalonia in Spain,
the Lega Norde in Italy, the
Marine Le Pen in France.

38. Right-Wing
Parties
10.

39. The Supreme Court of Austria
ruled that an extremely close
presidential vote must be taken
again.

40. This opens up the possibility
that a far-right-wing party
might take control of a major
European country.

41. Italian
Banking Crisis
11.

42. Italian banks are down some
€400 billion, an enormous
proportion of Italy’s GDP.

43. The Italians have successfully
extended and pretended for
years, but with government
debt, the refugee crisis, and
now Brexit, Italian Prime
Minister Matteo Renzi has his
hands full.

44. Germany’s
Invisible Crisis
12.

45. Germany’s economy is teetering.

46. As they may soon be dealing
with shrinking export volumes,
just like China is now.

47. Distorted
Markets
13.

48. The growing criticism of the
ECB is growing, and negative
rates are distorting
European financial markets.

49. As you can see,
Europe faces a host of
serious problems…

50. And has done little to resolve all
the issues, since it routinely takes
years to achieve consensus.

51. The EU is trying to make
the old agreement work
when it clearly doesn’t…

52. And now that member nations
know it doesn’t work, maybe
they can design something that
looks more like a trade union.

53. It would also need additional
characteristics that don’t
impinge upon national identity.

54. That would be an EU far
different than we see today.

55. Forging it will require a
completely different vision of
the future than what we have
seen in both the founding and
the running of the current EU.

56. They have to rework 10,000+
pages of agreements, with
bureaucrats fighting every inch of
the way, trying to maintain their
control.

57. The task is daunting, and
it’s not altogether clear
that they can pull it off.

58. But as we all know, the first
step in solving a problem is to
acknowledge the problem.

59. Now that it has, all we can
really do is wait to see if there
is the willingness for step two.

60. Join Hundreds of Thousands
of Readers of John Mauldin’s
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Follow Mauldin as he uncovers the truth
behind, and beyond, the financial
headlines in his free publication, Thoughts
from the Frontline.
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