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Europe’s “Hamiltonian Moment” or “Fort Sumter Fusillade”?

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A credible federal fiscal capacity, as Alexander Hamilton negotiated for the fledgling US, would ensure the euro’s long-term survival. But before Europe achieves anything close to federalism, it must survive a potential “Fort Sumter” moment – that is, a backlash comparable to the 1861 attack by Confederates that marked the start of the Civil War.

LONDON – The Franco-German proposal for a €500 billion ($565 billion) European Union recovery fund to cope with the COVID-19 crisis has been called the EU’s “Hamiltonian moment.” Like Alexander Hamilton’s 1790 agreement with Thomas Jefferson on transferring US states’ Revolutionary War debts to the new federal government, the logic goes, such a fund would pave the way to a United States of Europe. If only it were that simple.

A credible federal fiscal capacity, as Hamilton negotiated for the fledgling US, would ensure the euro’s long-term survival. But before Europe achieves anything close to federalism, it must survive a potential “Fort Sumter” moment – that is, a backlash comparable to the 1861 attack by Confederates on a Union garrison near Charleston, South Carolina.

The Battle of Fort Sumter marked the start of the American Civil War. Can the EU do better?

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