54b7050146f86f50104b2e00_mw538c.jpg

Europe’s Shaky Foundations

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.

We hope you're enjoying Project Syndicate.

To continue reading, subscribe now.

Subscribe

Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.

Support High-Quality Commentary

As the COVID-19 pandemic escalates, and its effects reverberate around the world, Project Syndicate is delivering the expert scientific, economic, and political insights that people need. For more than 25 years, we have been guided by a simple credo: All people deserve access to a broad range of views by the world's foremost leaders and thinkers on the issues, events, and forces shaping their lives. In this crisis, that mission is more important than ever – and we remain committed to fulfilling it.

But there is no doubt that the intensifying crisis puts us, like so many other organizations, under growing strain. If you are in a position to support us, please subscribe now.

As a subscriber, you will enjoy unlimited access to our On Point suite of long reads and book reviews, Say More contributor interviews, The Year Ahead magazine, the full PS archive, and much more. You will also directly support our mission of delivering the highest-quality commentary on the world's most pressing issues – including the latest outbreak-related developments – to as wide an audience as possible.

By helping us to build a truly open world of ideas, every PS subscriber makes a real difference. Thank you.

Subscribe Now

https://prosyn.org/6RXaiyo