What a great idea the Euro is.
Getting rid of all those minor currencies and joining to produce one major currency to compete with the dollar and yen and making Europe a major economic player was an excellent idea. And for a while it seemed to really work. It improved internal European trade, reduced the yo-yoing of the markets and even started to become the reserve currency to replace the dollar. After all the schisms of the previous 1000 years, it seemed that Europe was finally getting it’s act together.
Perhaps if the member states had stuck to the rules or the EU had had the authority to enforce them, the Euro might now still be the model currency it was intended to be. But in their effort to optimise membership, the EU countries allowed in countries who lied about their financial status. As if applying for an extra credit card, they succumbed to the temptation to up their income, forget some of their debt and generally give a much better impression of their housekeeping ability than was credible. The EU turned a blind eye to the obvious inaccuracies in the hope that ultimately everything would be fine. And with the two biggest players, France and Germany, flouting the rules themselves, who was going to lay down the law and get everyone into line? This crisis wasn’t created by the bankers playing fast and loose with toxic debt, but by the European politicians playing fast and loose with national debt.
The only solution seems to be that the stronger economies bail out the weaker. The pound of flesh will be greater control over the vagaries of the weaker countries’ tax and spending. It will be described as convergence, but really France and Gemany will want to control their satellite economies for decades to come. The Greeks are rioting against their own government – they, the Portuguese, the Spanish and the Italians are hardly likely to accept stringent dictats from outside governments who claim to be doing it for their own good.
It was one thing to create currency union. That is an abstract concept vague enough for most people to accept. Fiscal union is a different matter. Battles over sovereignty are struggles Europe is only too familiar with. The borders within Europe have been drawn in blood for centuries. They will not be erased by the eurocrats. Forcing peoples and cultures together against their will, to live under a single system has alway had the whiff of tyrany about it. It is like trying to force magnets together. Either they naturally attract, in which case no force is needed, or they perpetually resist. The reason there are so many different countries in Europe is that their polarity requires them to resist union. When you try to push people together, to force them to unite into a single entity, that entity can never be permanent. Just look at Czechoslovakia, Iraq and Yugoslavia, created by treaty after the first world war……