It’s been over a year since the most tangible (and some of the most cherished I assume) European Integration project, the Euro, started to look threatened.
Half a year after the Greek bailout (May 2010) came the Irish bailout (November 2010), and another half a year later came the Portuguese bailout (May 2011). What will happen in the next six months?
The Eurozone appears to have run out of ‘weak links’ whose default and even exclusion from the EMU would not be altogether catastrophic but somewhat bearable.
There are now fears of a next (bigger, biggest?!) global financial crisis. And it could well start with the solvency problems of the weakest euro-giants: Spain and Italy.
To some, the question is when the EMU will eventually prove to be an utter failure. To others, what thay are speculating about is how this imminent break-up would be possible, and to what degree.
Will it be a complete return to the the 1990s, with all euro-countries turning back to their national currencies? Or will it rather be a contraction of the Eurozone, scaled back to a core of the most efficient economies that make it up today?
Finally, there are the others – equally narrow-minded as those who rejoyce what they think is the demise of the EMU, because of its insolvent members.
They are the fanatics who insist that “there is no plan B,” therefore the current monetary union ought to survive ‘no matter what’. That is no matter what misery could bring to some countries that should have been part of the EMU in the first place.
There’s no reason to be happy about the prospect of seeing the Euro scrapped as a failed historic experiment, while are also no sane reasons to hold on to the ‘no matter what’ position.
Both the consenquences of giving up the Euro and of trying to preserve the Eurozone as it is today appear to be nothing but disatrous.
Europe and the EU will have to change, irrespective of what happens to the common currency now used in 18 EU states (+ colonies and some non-EU countries).
The turmoil within the EMU spares no country of ripple effects, and – to a certain extent – the fate of the entire ‘civilised world’ as we know it today depends on the ‘fate of the Eurozone’.
Countries like the UK, with it’s GBP, will have slightly more freedom of maneuver, unlike the Euro-slaves tied to decisions taken in Brussels and Frankfurt. However, not even China, Russia, Japan, nor the USA will be spared of what is due to happen on the Old Continent.
The Age of Discovery, two World Wars, problems in the Middle East (and in other former European colonies), almost every ‘world event’ had and has to do with Europe. And now – with the Euro.
Before anything else, one big question should be: what will happen to Germany? How will this great nation cope with the break-up of the EMU, assuming that a ‘reduced Eurozone’ (to 10-12 countries, instead of 17) wouldn’t be such a cataclysm?
It’s worth rasing this question, because here’s another ‘witty bit’ that I learned in the UK, from a British economic analyst (married to a German woman :-).
Considering that “For the past 400 years, all wars in Europe were fought because of German rise to supremacy on the continent,” he described the Eurozone as being “the best way to deal with German hegemony.”
What will we Europeans do if this ‘best way’ will no longer be to hand? Will we have to return to the old ‘worst ways’ in dealing with the strongest nations on the continent?
It’s very likely that those who were not good at playing by the EMU rules won’t be good at ‘alternative ways’ for keeping the statu quo in Europe either :-(
What if all these that we take for granted now – six decades of peace, freedom of movement, European cooperation – were taken away from us? Without all these, even a silly ‘cucumber war’ could lead to a Third World War, couldn’t it?
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3 comments:
This is a great article on a subject close to my heart and hopefully more people in our world take to their hearts before the financial mess consumes us all..
I have added it to my blog with full credit given.
http://www.kevingilmour.net/2011/06/a-perspective-from-romania/
Interesting article Bogdan, hope you are well.
In some ways Germany is the anti-image of Britain. Whilst I don't like to indulge in national stereotyping I do think the Germans are a rather more skilled people than the Brits in many ways (especially manufacturing). However, they have never had an empire to speak of and seem to have little desire to spread their language and culture (Portugal is a tiny country yet Lusiphone speakers number hundreds of millions). My friend Gareth studied German and wanted to improve by speaking to a native speaker. Said German replied 'If you try speaking German it will just advertise that you speak it badly'.
Maybe Germany has always been at a bit of a geographical disadvantage with only a sliver of coastline. But it seems to me Germany is historically divided between the gifts of its people and its inability to create a universalist culture. Subsequently I think the EU will go the way of most other expansionist projects. Its demographic crisis (low birthrate since 1970s) will exacerbate the decline.
'To some, the question is when the EMU will eventually prove to be an utter failure. To others, what thay are speculating about is how this imminent break-up would be possible, and to what degree.'
I think that the EU is already failing very badly. Only the Germans and French can know what next.
Of course, there is a possibility it was a mouse trap all along and that they expected the insolvency of the Mediterranean nations, but who knows?
Furthermore, I suppose another question is how this affects the European court of Human rights and EU law. Many people would like to see these things overturned but once politicians have arrogated certain rights and liberties I can't see them returning. German politicians are increasingly coming to reject the multiculturalism that is at the heart of the EU; maybe they will leave the poor nations with this legacy whilst themselves limiting immigration.
@ Kevin Gilmour
Thanks for mentioning my article on your blog!
I hardly believe that any (ordinary) people could stop 'the financial mess' anymore :-(
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@ Gregor
Thank you for your giving your view about Germany, and here are some points I'd like to make:
[1] It's 100% sure that today's German workforce is made up of more skilled people than the British one.
Britain may have had an advantage in the times of the Industrial Revolution. Actually, what if speading the British Empire 'accelerating' the loss of talent over the centuries?!
Many bright minds born on British soil eventually helped the rise of the USA, Canada, Australia, South Africa, New Zealand, Singapore.
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[2] Germany did have a short colonial empire (from the 1880s to the early years of WWI), and there were some remarkable traces left in German East Africa (Tanzania) and German West Africa (Namibia).
Unlike the French and British 'masters' the Germans set up schools for Africans, including technical schools.
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[3] Officially, Berlin is making efforts in order to promote the learning of German, as well as German culture.
Too bad that the attitude that Gareth describes is ruining the state's efforts :-(
Let's not forget that, irrespective of how 'tiny' Portugal is, there's also a huge country (Brazil) helping the spread of the language, just as the USA is contributing massively to the spread of the English language.
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[4] The geographical disadvantage is also worth mentioning, but only up to a point.
German trade and culture didn't spread over the oceans, to other continents, yet is 'shaped' the Eastern part of Europe.
Until after WWII, there were strong German communities (having lived there for centuries) in the Baltic states, Russia, Romania, Poland, the Czech Republic, Slovakia, and even Bessarabia (Eastern Moldova, snatched by the Russians in 1812, and now forming the Republic of Moldova).
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[5] I see that you are already foreseeing the demise of such an 'expansionist project' as the EU.
Not that I'd be a fanatical pro-European, however, I fear the end of this project.
A country like Britain has less to worry, but without the EU, Eastern Europe could end up being 'redrawn' between Germany and Russia.
To a Briton, this may be only an example of 'geopolitical paranoia'; not so for Eastern Europeans :-(
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