Americans are clucking righteously over the financial mess in Europe, acting alarmed but privately finding pleasure in the other guy’s misfortunes. Poor, poor, pitiful Europeans. Why can’t they be more like us? American punditry assures us the end is nigh for the euro, with the slow-motion breakup of the European Union bound to follow. Now American politicians have someone to blame if the US economy goes off the rails. U-S-A, U-S-A, U-S-A.
My advice to Americans: hold the Schadenfreude. Yes, an epic drama is unfolding in Europe’s financial crisis—fraught with great risk and painful choices—but it is not the story we are being told by triumphalist American media and policy elites. Instead of sneering comparisons, people should see the similarities between our situation and theirs. Europe is not busted.
Europeans may in fact be on the brink of achieving great change—a deep turn in history that is politically explosive but profoundly progressive. They may not get there, not yet. But don’t count them out.
Events are compelling the nations of Europe to consider whether they must at last decide to become the “United States of Europe.” That is the subtext for current events. It was the old dream born after the bloody turmoil of World War II. It has been patiently nurtured step by step by two generations of postwar Europeans. Led by Germany and France in grand détente, the high-minded vision was that bitter rivals could eventually evolve into the USE—a viable economic rival to the USA.
There are lots of reasons to be skeptical. Completing the unification would require existing nations to give up a crucial measure of their sovereign power to decide taxation and spending. The peoples of Europe would have to accept a new identity for themselves, superseding ancient ethnic rivalries. The political systems of nation-states would have to organize a new unified structure of centralized governance, more or less like the United States of America. Irony of ironies, the once-defeated and disgraced nation—Germany—is now the economic powerhouse shaping the future, pushing for a centralized government and politics, to the queasy discomfort of its neighbors. Can they trust the Germans? Do they have a choice?
Despite the obvious difficulties, I see two main reasons why Europeans will push forward toward fulfilling the original expectation. First, the present system doesn’t work. The euro provides a unified currency that can be destabilized so long as individual governments are free to set conflicting fiscal policies—borrowing and spending their way into deep holes. Politicians are blameworthy, but the true culprits in this arrangement are the globalized banks that game the system country by country, piling up impossible debt burdens for nations, then demanding bank bailouts when those nations go broke. That is not really so different from the debt crisis that the deregulated banking system created for the United States.