Fifteen years after the collapse of the US investment bank Lehman Brothers triggered a devastating global financial crisis, the banking system is in trouble again. Central bankers and financial regulators each seem to bear some of the blame for the recent tumult, but there is significant disagreement over how much – and what, if anything, can be done to avoid a deeper crisis.
BERLIN – The eurozone is at the center of the global financial crisis, because only there, in the realm of the second most important currency after the dollar, does the crisis hit a weak “structure” rather than a state with real power. It is a structure that is squandering the trust of citizens and markets in its ability to resolve conflicts – while pushing the international financial system to the brink of disaster.
In other words, the financial crisis now reflects a political crisis of the eurozone – one that calls into question the very existence of the European project as a whole. If Europe’s monetary union fails, not much of the common market, or of European institutions and treaties, will be left. We would have to write off six decades of successful European integration, with unknown consequences.
This failure would coincide with the emergence of a new world order, as two centuries of Western predominance come to an end. Power and wealth are shifting towards East Asian and other emerging countries, while America will be preoccupied with its own problems and turning from the Atlantic towards the Pacific. If Europeans don’t address their interests now, no one will do it for them. If Europe today does not become the agent of its own destiny, it will become the object of new world powers.
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