Garton Ash, T. (2015) “Europe is being torn apart – but the torture will be slow“, The Guardian, 08 Μαρτίου 2015.
This monetary union without a political one will continue to cause suffering and divide the north from the south
“If the euro fails, Europe fails”: thus spake Angela Merkel. Unfortunately, the euro is failing, but it is failing slowly. Even if Greece grexits, the eurozone seems unlikely to fall apart in the near future, although there is still a chance that it will. There is a much higher chance that it will grind along like a badly designed Kazakh tractor, producing slower growth, fewer jobs and more human suffering than the same countries would have experienced without monetary union. However, the misery will be unevenly distributed between debtor and creditor countries, struggling south and still prospering north.
These different national experiences will be reflected through elections, creating more tensions of the kind we have already seen between Germany and Greece. Eventually something will give, but that process may take a long time. “There is a great deal of ruin in a nation,” said Adam Smith. Given the extraordinary achievements of the 70 years since 1945, and the memories and hopes still invested in the European project, there is a lot of ruin still left in our continent.
I recently participated in an event in Frankfurt attended by representatives of leading European investors. A multiple-choice instant poll was taken, offering a number of scenarios for how the eurozone would look in five years’ time, and asking which we found most probable. Nearly half those present opted, as I did, for “Japan in the 1990s”. Around 20% voted for “what eurozone?”; 18% went for “the UK after Thatcher”, by which they presumably meant a leaner, meaner economy, with the policies of austerity and structural reform producing growth, but also dislocation and inequality.
Σχετικές αναρτήσεις:
- Interview: “Five minutes with Philippe Legrain: “The Eurozone has become a glorified debtors’ prison”, LSE EUROPP, 09 Μαρτίου 2015.
- Gechert, S., Hughes Hallett, A. & Rannenberg, A. (2015) “Fiscal multipliers in downturns and the effects of Eurozone consolidation“, Centre for Economic Policy Research, Policy Insight No. 79, 25 Φεβρουαρίου.
- Brzeski, C. (2015) “Calling the eurozone’s bluff?“, EU Observer Opinion, 14 Ιανουαρίου.