DUBLIN – The European Parliament election is grabbing headlines worldwide, as it highlights a new skepticism in the European politics and raises concerns about the future of the integration project. But the real litmus test for the European Union is to be found elsewhere – in the health of its smaller economies, especially Greece and Ireland.
Both countries are small and highly indebted, with weak domestic industrial structures and faltering banking systems. Both suffered massive financial crises – rooted in egregious economic mismanagement in Greece and a massive asset-price bubble in Ireland – which were amplified by the eurozone’s structural shortcomings. And both countries had somewhat venal political systems, dominated by two large parties.