Euro death watch: Long live Euro­pean di­ver­sity!

The Washington Times Weekly - - Commentary -

In­creas­ingly, how­ever re­luc­tantly, Euro­peans are bel­ly­ing up to the Eu­ro­zone’s ultimate cri­sis. Talk­ing heads present a dilemma: ei­ther the Euro­pean Com­mu­nity will pick apart its com­mon cur­rency or take rad­i­cal steps to­ward a highly cen­tral­ized eco­nomic com­mand.

That’s be­cause a tri­an­gle is stran­gling the Euro: mar­kets faced with the threat bank­rupt mem­bers of the mon­e­tary al­liance will de­fault raise the cost of re­fi­nanc­ing; north­ern Euro­pean tax­pay­ers warn their elected gov­ern­ments they will not con­tinue bail­ing out south­ern neigh­bors; and a plethora of na­tional and in­ter­na­tional mon­e­tary or­gans des­per­ately ma­neu­ver to pro­tect their bloated bu­reau­cra­cies’ turf by im­pro­vis­ing tem­po­rary res­cues.

Plac­ing even more power into hands of un­elected bu­reau­crats for eco­nomic amal­ga­ma­tion would be a gi­ant step. That’s not go­ing to hap­pen be­cause in­aus­pi­cious as it is for the mon­e­tary cri­sis, wide­spread po­lit­i­cal op­po­si­tion [most of it con­sti­tu­tional and peace­ful] to the grow­ing calls for aus­ter­ity is ev­i­dence of grass­roots sovereign­ties as old as the end of the Ro­man Em­pire. How dif­fi­cult they are to as­suage has been demon­strated by a half cen­tury of tor­tured progress of The Euro­pean Pro­ject.

More ap­par­ent daily is the in­ad­e­quacy of build­ing “Europe” from the top down – even given the vi­sion of Gen. Charles de Gaulle and Chan­cel­lor Kon­rad Ade­nauer and their tech­no­cratic col­lab­o­ra­tors. Ab­sence of a process such as the Amer­i­can Con­ti­nen­tal Congress with grass­roots rep­re­sen­ta­tion painstak­ingly com­pro­mis­ing conflicts has led into a blind al­ley on the eco­nomic front, how­ever much lim­ited suc­cess has been achieved po­lit­i­cally.

Mean­while, as so of­ten hap­pens, the hel­ter-skel­ter of daily events ob­scures the com­ing in­evitable de­ci­sion. Those in­clude crit­i­cal hap­pen­ings on the dol­lar side of the At­lantic, too. Ev­i­dence of the re­fusal to face up is a pro­posal by idio­syn­cratic eco­nom­ics No­bel Prize win­ner Robert Mun­dell to fix the dol­lar to the Euro to an­chor the ever more threat­en­ing par­al­lel in­ter­na­tional cur­rency in­sta­bil­ity.

Mr. Mun­dell might just be de­fend­ing his orig­i­nal spon­sor­ship of the Euro, a com­mon cur­rency de­signed to bounce around a dozen dif­fer­ent na­tional eco­nomic strate­gies with­out an over­all guid­ing hand. But pin­ning fixed prices for rapidly de­valu­ing dol­lars to dis­in­te­grat­ing Eu­ros would be, in­deed, re­ar­rang­ing deckchairs on the Ti­tanic.

Early on as it is, it’s rash and, of course, daunt­ing, at this junc­ture to spec­u­late in a few hun­dred words im­pli­ca­tions of the Euro’s demise. But where an­gels fear to tred, here are some guesses:

Whether or not hard-nosed ad­vo­cates will win out in fos­ter­ing sur­gi­cal cut­backs of Amer­i­can gov­ern­ment spend­ing in or­der to save the dol­lar from be­ing over­whelmed by do­mes­tic and in­ter­na­tional deficits – a ques­tion as large as the Euro’s fu­ture — the role of the dol­lar as the in­ter­na­tional re­serve cur­rency is willy-nilly be­ing strength­ened. Any talk of mas­sive huge East Asian dol­lar hold­ings shift­ing into Eu­ros – never a real pos­si­bil­ity — is now out the win­dow. Talk of a non-con­vert­ible Chinese in­ter­na­tional re­serve cur­rency is too id­i­otic to dis­cuss. We have al­ready been through a failed “supracur­rency” ex­per­i­ment of

Wide­spread po­lit­i­cal op­po­si­tion [most of it con­sti­tu­tional and peace­ful] to the grow­ing calls for aus­ter­ity is ev­i­dence of grass­roots sovereign­ties as old as the end of the Ro­man Em­pire. How dif­fi­cult they are to as­suage has been demon­strated by a half cen­tury of tor­tured progress of The Euro­pean Pro­ject.

cre­at­ing the In­ter­na­tional Mon­e­tary Fund’s “draw­ing rights”. And there may not be enough gold to cover ever-ex­pand­ing liq­uid­ity de­mands.

The at­ten­u­a­tion of the Euro cri­sis un­for­tu­nately has el­e­vated its role in the to­tal pro­ject for a sta­ble, pros­per­ous, uni­fied Europe.

It was, orig­i­nally, if al­ways highly im­por­tant, only one of many uni­fi­ca­tion ef­forts — a com­mon trad­ing mar­ket, a com­mon la­bor/mi­gra­tory zone, fi­nan­cial, en­vi­ron­men­tal and health reg­u­la­tory uni­fi­ca­tion, a com­mon for­eign pol­icy, a com­mon de­fense.

These have been, at best, only par­tially achieved just as only 17 — no­tably ex­clud­ing Bri­tain with its world fi­nance hub in The City — of 27 EU mem­bers adopted the Euro. Al­ways im­por­tant, the Euro has been ex­alted to the touch­stone for suc­cess of uni­fi­ca­tion and its demise there­fore now made in­creas­ingly cat­a­strophic.

The com­ing Euro breakup co­in­ci­den­tally will par­tially re­ha­bil­i­tate the U.S. su­per­power role de­spite Wash­ing­ton’s ob­vi­ous eco­nomic and geopo­lit­i­calmil­i­tary overex­ten­sion, per­sis­tently ex­ag­ger­ated by Pres­i­dent Barack Obama’s de­ter­mined cam­paign to de­flate the Amer­i­can im­age.

That will be cou­pled not only with he­do­nis­tic Europe’s con­tin­u­ing lack of de­ter­mi­na­tion to tend its own mil­i­tary de­fenses but its con­tin­u­ing re­liance on the U.S., for ex­am­ple, an Amer­i­can in­ter­con­ti­nen­tal anti-mis­sile shield which Wash­ing­ton has no op­tion but to build in pur­suit of its own se­cu­rity.

So, ac­cept: the Euro con­struct is dead! long live Euro­pean di­ver­sity — the well­spring of West­ern civ­i­liza­tion!

Sol W. San­ders, (sol­sanders@cox.net), writes the 'Fol­low the Money' col­umn for The Wash­ing­ton Times .

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