Wednesday, 18 January 2012

This too shall pass

As may or may not be obvious from the previous post,  I remain extremely pessimistic about the future of the euro and the future of the  "European project"  in general.  It looks like the EU will probably end up becoming little more than a customs union in future.  Which is incidentally what the British seem to have wanted it to be all along,  so they'll be happy,  presumably.

I say this because the responses to the euro crisis on all sides have been marked by selfishness;  by petty-minded,  short-sighted nationalism which consistently places the short-term national interest ahead of shared,  long-term gains.  Germany's  "reform"  plan for the euro is running into trouble because,  despite the desperate situation,  the poorer countries are refusing to submit to such strict control of their budgets and borrowing rights.  Germany,  on the other hand,  continues to refuse any measure which would systematically redistribute some of the financial gains from the euro from the more prosperous countries to the less prosperous ones.  And this is not simply due to the attitude of Angela Merkel or her team.  Reading the German press,  you'll find criticism of the Merkel government's handling of the crisis,  but very few voices calling for a redistribution of euro profits to poorer countries like Greece,  Portugal and Italy.  The process of European unification was based on the principle of give and take,  but increasingly it seems that everyone wants to take and no one wants to give.

None of this should be surprising.  Petty-minded nationalism ruled Europe for hundreds of years before the disastrous wars of the early twentieth century shocked people into taking a different approach.  Unfortunately,  that old mentality has been gradually reasserting itself for at least the past fifty years now.  I don't think the current crisis is going to be enough to force a reversal of that trend. And if it doesn't,  there is simply no way the euro,  or the European project,  can survive in the long term.  The result will be a weaker Europe,  divided upon itself as before,  with its relative wealth and power in the world declining even faster than America's. And every nation blaming every other one for what is happening to them.

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