Slowly, word is getting round – even in Germany – that the financial crisis could destroy the European unification project in its entirety. Indeed, the crisis is beginning to erode the Franco-German and transatlantic foundations – of a post-war European order that has ensured an unprecedented period of peace and prosperity.
BERLIN – Slowly, word is getting round – even in Germany – that the financial crisis could destroy the European unification project in its entirety, because it demonstrates, quite relentlessly, the weaknesses of the eurozone and its construction. Those weaknesses are less financial or economic than political.
The Maastricht Treaty established a monetary union, but the political union that is an indispensable precondition for the common currency’s success remained a mere promise. The euro, and the countries that adopted it, are now paying the price. The eurozone now rests on the shaky basis of a confederation of states that are committed both to a monetary union and to retaining their fiscal sovereignty. At a time of crisis, that cannot work.
At the beginning of the crisis, in 2007-2008, the eurozone’s fundamental flaws could have been corrected had Germany been willing to support a joint European crisis response. But German officials preferred to maintain national primacy – and thus a confederational approach to Europe.
Gordon Brown, et al.
urge the US administration to support waiving intellectual property rights in order to scale up global COVID-19 vaccination efforts.
Even in a crisis as grave as the COVID-19 pandemic, money is not a panacea, and borrowing makes sense only if it is carried out prudently and reasonably. Otherwise, states will jeopardize their long-term financial flexibility, price stability, and competitiveness.
worries that monetization of pandemic-related government borrowing will boost inflation and erode competitiveness.
BERLIN – Slowly, word is getting round – even in Germany – that the financial crisis could destroy the European unification project in its entirety, because it demonstrates, quite relentlessly, the weaknesses of the eurozone and its construction. Those weaknesses are less financial or economic than political.
The Maastricht Treaty established a monetary union, but the political union that is an indispensable precondition for the common currency’s success remained a mere promise. The euro, and the countries that adopted it, are now paying the price. The eurozone now rests on the shaky basis of a confederation of states that are committed both to a monetary union and to retaining their fiscal sovereignty. At a time of crisis, that cannot work.
At the beginning of the crisis, in 2007-2008, the eurozone’s fundamental flaws could have been corrected had Germany been willing to support a joint European crisis response. But German officials preferred to maintain national primacy – and thus a confederational approach to Europe.
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