The E.U. Is Not Going Away

By James Rickards

This post The E.U. Is Not Going Away appeared first on Daily Reckoning.

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Yesterday’s runaway victory of France’s pro-E.U. candidate, Emmanuel Macron, should put an end to talk about the end of the E.U.

I defied expert consensus twice last year by predicting Brexit and the election of Donald Trump. I was widely ridiculed on both occasions, but I was proven right.

But I don’t make predictions to grab attention or make headlines. They’re based on the actual evidence I see. And I also predicted that Macron would win yesterday, which was also the consensus view.

His opponent, Marine Le Pen of the National Front party, won 34% of the vote, to Macron’s 66%. It should be noted though, that the last time the National Front party made the final round of the election, it only received 20% of the vote.

So yesterday’s loss, while decisive, nonetheless represents a dramatic gain for the National Front party. And the populist, nationalist, anti-immigration story is not going away.

But the Euro as a currency is much more stable than people realize. Not only did many believe Brexit meant the demise of the European Union. They also believed it spelled the end of the Euro as a currency.

I was not among them.

Brexit was not about leaving the Euro, for example — it was never on the Euro in the first place. Britain remained on the Pound. It was about leaving the E.U.

But beyond the Euro, there’s something more fundamental you need to understand about the E.U.

The European Union is not primarily an economic project. It’s primarily a political project.

Does it have a lot of economic problems? Absolutely, from Greece to Portugal, Italian banks, et cetera. But its primary purpose is political.

Much has been made of Brexit. But the U.K. was never really a good fit with the E.U. to begin with. Besides being geographically separated from continental Europe, Britain is also culturally distinct. Further, it has a different legal system.

Many of the countries on the continent have what’s called a code-based system of law. In a code system, problems are addressed by writing rules. There’s practically a rule for everything, including how much wine a bartender can pour into a glass, for example. If a rule doesn’t adequately address a problem, they’ll write another rule. If that doesn’t solve it, they’ll write another and so on.

Contrast that with the U.K., which has a tradition of common law. Common law is different than code-based law. Yes, there are laws, rules and regulations in common law. Probably far too many. But judges have greater discretion under common law that lets them look past the actual letter of the law to achieve equitable …read more

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