Magazine article Foreign Policy

The Myth of Europe: The Euro Crisis Isn't Really about Money. It's about the Fiction That Europeans Ever Existed at All

Magazine article Foreign Policy

The Myth of Europe: The Euro Crisis Isn't Really about Money. It's about the Fiction That Europeans Ever Existed at All

Article excerpt

When the euro officially entered circulation at the stroke of midnight on Jan. 1, 2002, fireworks lit up the night sky across Europe to celebrate the scrapping of the French franc, German deutsche mark, Greek drachma, and a clutch of other ancient currencies. Brussels hosted an extravagant sound-and-light show, while Frankfurt unveiled a five-story statue of the freshly minted euro as a pop band belted out "With Open Arms (Euro World Song)." "I am convinced," European Central Bank President Wim Duisenberg declared, that the launch of euro coins and banknotes "will appear in the history books in all our countries and beyond as the start of a new era in Europe."

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The early 2000s did feel like the European moment. Enlightened policy wonks on both sides of the Atlantic gushed about the glamorous new arrival on the global stage. In this magazine in 2004, Parag Khanna described the "stylish" European Union as a "metrosexual superpower" strutting past the testosterone-fueled, boorish United States on the catwalk of global diplomacy. Later that year, economist Jeremy Rifkin penned a booklength encomium, The European Dream: How Europe's Vision of the Future Is Quietly Eclipsing the American Dream, which was followed by Washington Post reporter T.R. Reid's unlikely bestseller, The United States of Europe: The New Superpower and the End of American Supremacy. In 2005, foreign-policy expert Mark Leonard explained Why Europe Will Run the 21st Century.

One wonders how well these books are selling today, now that the European dream has become a nightmare for many, with the euro teetering on the brink of collapse and the union that produced it mired in a triple crisis that will take years, if not decades, to resolve.

First, there's the economic catastrophe. Like the United States, Europe is living through its fiercest financial crisis since the 1930s. Unemployment is high--more than 20 percent in formerly go-go Spain--while growth is almost nonexistent, banks are collapsing, and indebted governments are running out of money. Some countries, among them Britain, Greece, Ireland, Italy, Portugal, and Spain, face the prospect of a generation of hardship.

Second, the economic crisis comes on top of the deepest political crisis the European Union has faced. Its most ambitious project, the creation of a single currency, is in danger of collapse. The principle of the free movement of people, another cornerstone of EU integration, is being challenged as some states reintroduce border controls. Visionary leadership is in short supply. And a disgruntled electorate is turning in droves toward anti-immigrant populism. In his annual address last September, European Commission President Jose Manuel Barroso admitted, "We are facing the biggest challenge in the history of our union." A month later, German Chancellor Angela Merkel described the threat to the euro as Europe's "worst crisis since the end of World War n." For the first time in my 20 years in Brussels, the splintering of the European Union is no longer science fiction but a real, if still somewhat unlikely, possibility.

The European Union was built on the myth that we are one people with one common destiny--an "ever closer union," in the words of the 1957 Treaty of Rome that founded what was then called the European Economic Community. We are now discovering that regional and national differences are not dissolving and that Europeans think and act very differently from one another. The British view of the state's role is very different from the French view. The Greek or Italian concept of law is very different from that of Sweden or Denmark. Latvians have a very different view of Russia from Germans. What an Irishman is prepared to pay in taxes is very different from what a Dane or Belgian will allow.

This lack of unity is Europe's third and most profound crisis, one that underlies the continent's economic and political woes. …

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