Europa, Europa


The best sentences I read today:

Yet as the earlier Ireland-Nevada comparison shows, the United States works as a currency union in large part precisely because it is also a transfer union, in which states that haven’t gone bust support those that have. And it’s hard to see how the euro can work unless Europe finds a way to accomplish something similar.

That is from Paul Krugman’s essay in this weekend’s NYT magazine, “Can Europe be Saved?”

Krugman’s argument is that while the blame for the economic crisis of the past three years has been largely pinned on Wall Street, the European Union is at least as much at fault. For me, the key parts of his story are the comparisons between Iceland and Brooklyn, or Ireland and Nevada, explaining why the economic crisis has hit these places differently, and how currency zones affect the policies various regions are able to implement in order to cope.

Europe’s problem, crudely put, is that it is half-assed. For half a century, its elites have imagined that it could build a federal state by incremenents, adding one piece of the puzzle every decade or so until everyone would eventually wake up and realize they lived in a country called Europe. But as Krugman points out, a lot of people argued that the currency union, in the absence of proper federal oversight, would lead to precisely the sort of crisis we’re seeing now.

Krugman ends his essay by listing four ways Europe might emerge from the crisis. Two involve muddling on through, one foresees the dissolution of the Eurozone (or at least the exit of some participants). The last possibility would see Europe become properly federalized — hence the passages I quoted above. Krugman seems to think that muddling through won’t work, and that Europe has a choice to make — the backwards step of a failed Euro, or the positive step of deeper political integration. I don’t see anything close to the political will necessary to push Europe toward a proper constitution.

PS Larry Sidentop’s Democracy in Europe remains the best book I’ve read on the subject. IMO it’s a must-read for students of comparative constitutionalism.

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Europa, Europa

  1. It's a question of timing. When 'Europe' started they could sell cooperation in order to avoid more wars, but they certainly couldn't have sold integration.

    It took the US a civil war to do it, and Europe had already had 2 of them.

    It's only now, half a century later, that they've come to the crunch… you're either in or you're out…so now is the time to deal with it.

    • History is anchored to a place in time. If you never let go, forever your progress to the future shall be limited by your reach.

      Europe needs to join the present and let go of it's tribal grudges if it wishes to have unity.

      • They did that officially over 50 years ago.

        • Funny they still seem to get rather worked up over it to the point of modern political slights. I guess that's an improvement even if it is petty.

  2. Interesting article but JMHO the connection to Wall Street is deeper than appears. You cannot function sucessfully as a family for the good of all if one member is 'cooking the books'. There were rules set out regarding debt vs GDP, etc.
    It is claimed that the deal enabled Greece to hide the extent of both its public deficit and national debt.

    Wall Street banks are also big players in municipal and state debt in the US.

  3. "But as Krugman points out, a lot of people argued that the currency union, in the absence of proper federal oversight, would lead to precisely the sort of crisis we're seeing now."

    I read recently economists, and others, told Euro backers 10 years ago this would happen.

    EU not at all popular with regular people across Europe but the elite love it. EU technocrats have to implement their agenda in half assed way because people would revolt if EU was just sprung on them and all countries disappeared over night. The economic crisis that is occurring now was expected, and welcomed, because it will allow EU bureaucrats to implement their next round of power grab from supposedly sovereign states.

    • Well, except that 'regular' people voted for it, and there's a line-up of countries waiting to get in….

      Meanwhile, the southern US is still talking about secession.

      • So are loons in each Canadian province.

        • You mean you don't like Alberta separatists?

          • There's also the lesser known groups in each province but the media doesn't give them the credit they don't deserve.

          • And you are discussing separatist groups in Canada on an EU thread….why?

    • Ping

      • "who's there?"

          • who?

      • More or less since it annoys you so much. That and you were into US separation desires, seemed like a natural extension.
        However if you're not interested in examining the trials of federations, then why comment on the European Union's desire to explore that route?

  4. Dan Gardner called, he says to check those "lots of people" who predicted this, give them a book deal as guru prognosticators and whistle against the fact that they're on the record with other, failed predictions.

    On the other hand, I like seeing Europe called half assed; because they are.

    • Too be fair though, with the exception of the UK, their asses are on average probably half the size of ours…

      • Sigh. Ping.

  5. Quick Google shows that 33% of Americans are overweight, compared to 17% in Europe. I believe OC and I have a point. So there.

  6. Robert Bourassa differed from the sovereigntists on precisely this point, which did not stop the latter from invoking the EU as the model for sovereignty-association

  7. A European consitution would have helped but the commoners refused it

    • The Treaty of Lisbon entered into force on 1 Dec 2009.

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