Increasingly, however reluctantly, Europeans are bellying up to the Eurozone’s ultimate crisis. Talking heads present a dilemma: either the European Community will pick apart its common currency or take radical steps toward a highly centralized economic command.
That’s because a triangle is strangling the Euro: markets faced with the threat bankrupt members of the monetary alliance will default raise the cost of refinancing; northern European taxpayers warn their elected governments they will not continue bailing out southern neighbors; and a plethora of national and international monetary organs desperately maneuver to protect their bloated bureaucracies’ turf by improvising temporary rescues.
Placing even more power into hands of unelected bureaucrats for economic amalgamation would be a giant step. That’s not going to happen because inauspicious as it is for the monetary crisis, widespread political opposition [most of it constitutional and peaceful] to the growing calls for austerity is evidence of grassroots sovereignties as old as the end of the Roman Empire. How difficult they are to assuage has been demonstrated by a half century of tortured progress of The European Project. More apparent daily is the inadequacy of building “Europe” from the top down – even given the vision of Gen. Charles de Gaulle and Chancellor Konrad Adenauer and their technocratic collaborators. Absence of a process such as the American Continental Congress with grassroots representation painstakingly compromising conflicts has led into a blind alley on the economic front, however much limited success has been achieved politically.
Meanwhile, as so often happens, the helter-skelter of daily events obscures the coming inevitable decision. Those include critical happenings on the dollar side of the Atlantic, too. Evidence of the refusal to face up is a proposal by idiosyncratic economics Nobel Prize winner Robert Mundell to fix the dollar to the Euro to anchor the ever more threatening parallel international currency instability. Mr. Mundell might just be defending his original sponsorship of the Euro, a common currency designed to bounce around a dozen different national economic strategies without an overall guiding hand. But pinning fixed prices for rapidly devaluing dollars to disintegrating Euros would be, indeed, rearranging deckchairs on the Titanic.
Early on as it is, it’s rash and, of course, daunting, at this juncture to speculate in a few hundred words implications of the Euro’s demise. But where angels fear to tred, here are some guesses:
- Whether or not hard-nosed advocates will win out in fostering surgical cutbacks of American government spending in order to save the dollar from being overwhelmed by domestic and international deficits – a question as large as the Euro’s future – the role of the dollar as the international reserve currency is willy-nilly being strengthened. Any talk of massive huge East Asian dollar holdings shifting into Euros – never a real possibility – is now out the window. Talk of a non-convertible Chinese international reserve currency is too idiotic to discuss. We have already been through a failed “supracurrency” experiment of creating the International Monetary Fund’s “drawing rights”. And there may not be enough gold to cover ever-expanding liquidity demands.
- The attenuation of the Euro crisis unfortunately has elevated its role in the total project for a stable, prosperous, unified Europe. It was, originally, if always highly important, only one of many unification efforts – a common trading market, a common labor/migratory zone, financial, environmental and health regulatory unification, a common foreign policy, a common defense. These have been, at best, only partially achieved just as only 17 – notably excluding Britain with its world finance hub in The City — of 27 EU members adopted the Euro. Always important, the Euro has been exalted to the touchstone for success of unification and its demise therefore now made increasingly catastrophic.
- The coming Euro breakup coincidentally will partially rehabilitate the U.S. superpower role despite Washington’s obvious economic and geopolitical-military overextension, persistently exaggerated by Pres. Barack Obama’s determined campaign to deflate the American image. That will be coupled not only with hedonistic Europe’s continuing lack of determination to tend its own military defenses but its continuing reliance on the U.S., for example, an American intercontinental anti-missile shield which Washington has no option but to build in pursuit of its own security.
So, accept: the Euro construct is dead! long live European diversity — the wellspring of Western civilization!