Economic Europa Dope
Posted by Adam Blickstein
A great deal of pessimistic news from Europe over the weekend:
With uncertain leadership and few powerful collective institutions, the European Union is struggling with the strains this crisis has inevitably produced among 27 countries with uneven levels of development.
The traditional concept of “solidarity” is being undermined by protectionist pressures in some member countries and the rigors of maintaining a common currency, the euro, for a region that has diverse economic needs. Particularly acute economic problems in some newer members that once were part of the Soviet bloc have only made matters worse.
On the one hand I want to say the financial crisis is the first major test of the post-enlargement, modern EU and will help determine how Europe will grow institutionally in the future. But on the other hand worry that European integration may have moved too fast too quickly without a truly robust structure so that when real hard times like now hit, it threatens the stability of the entire system. In other words, while this test will tell us a great deal about the present and future of the EU, it might not only merely be a test of pan-European harmony but also reveal a destructively discordant note in the basic structure of the European project.
Whereas even up to two years ago, fuller integration was seen as mutually beneficial to both the"net givers" (Britain, France, Germany) and "net takers" (Poland, Bulgaria, Spain), that ideal has clearly been disintegrated in the current financial climate. The growing divisions in Europe and the across the board economic suffering of countries from west to east may be exposing the mutually destructive nature emanating from the lack of protective economic compartmentalization in the basic political and financial foundation of the EU. It will be interesting to see if Britain's greater economic autonomy allows it to weather the economic storm more adroitly than their continental counterparts, despite of course ostensibly a more dire economic reality.
It might also work to determine whether the European experiment was overreach from the beginning, and whether the North American model, where there is the economic integration of NAFTA and other bilateral agreements without the political and financial "one state" mentality of Europe that puts everyone in the same sinking ship regardless of internal domestic policy, is the preferable option when it comes to regional economic cooperation.
But as with most things in the economic crisis, no one really has a firm idea how any of this will look like at the end.