The future of the European Union

The choice


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Can anybody tell me why, as Dutch citizens, my family has to pay EUR36,000 or more (and this is just into the current ESM) to finance Southern Europe, and on top af all without even being able to have any say in this? And then work until 67 and pay 52% income tax, to finance early retirement and large scale tax evasion in Italy and Greece? I'd prefer to just carry a few more currencies in my pocket when I go on holiday...


Dear Economist,

there is a simple rule in a democracy:

No taxation without representation.

If Greece wants European money, the majority of the Europeans can decide how it is spent.

There is no way you make people pay taxes when a people (Greeks) don't bother to play by rules.

So lets look how this will work: We apply the same taxes, same rules and same corruption level to Greece as we see in a standart European country.

Than the rest of Europe might be more willing to support their south European brothers.

As long as the honest feel betrayed by the Greeks, there will be no happy ending in this drama...


The best, the shortest and the most explicit description of eurobonds
is the title of the article published in by Daniel J. Mitchell:

"Eurobonds: the fiscal version of co-signing a loan for your unemployed alcoholic cousin who has a gambling addiction".


Superstate sounds great, but it'll either break-up or devolve into civil war within 20 years.

Look at the separatist movements in Belgium, Canada, the UK, or Italy over minor differences like language or a slightly different culture. Now imagine that in a country with 23 official languages and over 44 minority languages. You'd have to have a tyrant of the magnitude of Stalin just to hold it together.

Everyone from the Romans, to Charlemagne, to Napoleon have tried to build a European superstate but it has always failed.
The only possible way to achieve it would be through a forced homogenization of the languages and cultures like in America, and that would be almost impossible to do.


The Euro has done its job, by bringing out the need for reforms in all member states of the zone and by placing the political integration of Europe squarely on the agenda of public debate.

Progress towards political union will, no doubt, be iterative and there will be crises and difficulties along the way. However, as integration is pushed ever further, at some stage it is likely that enough people will say "look, we have come so far towards union and there are still issues which can only be dealt with by further integration: why don't we just finish the job properly and get a real federal government?"

This prospect displeases The Economist, for reasons which it never makes explicit, and its displeasure is manifest by use of the term "superstate", as if a European government could only be something straight out of Kafka. This appears to be a common British reaction - one which has no basis in anything other than someone's lurid imagination. It is also an increasing irrelevance as Britian chooses to marginalise itself from the process of integration.


To me as a German, Eurobonds would only be acceptable if accompanied by thorough structural reforms in the countries benefitting from those bonds, overseen by a European government of some sort ("Superstate"). Such a Superstate would have to give us, the Germans, a far greater say in the economic policy of other European countries than we already have, otherwise it would be a fluke (is that the right term?). But with the Greeks and Spanish already resenting the influence our government has on their lifes, can this work?
Anyways, a superstate would also be far more capable at holding casino-capitalism at bay. Which is probably why the Economist resents it. Which is probably a very good reason to actually take that route. Yay Superstate!


To summarize opinions:

Northern Europeans want a breakup,

While Southern Europeans wants to keep the Euro (keep the money flowing and Germans paying)

Funny isn't it?



Pure nationalist populism.

There are all sorts of "Germans" or "Dutch" - rich speculators and poor savers as there are all sorts of Italians or Greeks and I see no reason why a rather poor granny from lets say Denmark should support a rich, tax-evading shady young businessman from Italy or the other way around.

This constant (national and super-national) collectivization of dept/risk that we are reading about all the time (while the privatization of profits is omitted/forgotten) is just disgusting, immoral and above all anti-liberal.


Creating collateralized debt is just another way of trying to prolong the game in which Germany and a handful of smaller countries pay for the lifestyles of countries unwilling to restructure their economies. Although it might buy a year or two of stability, the underlying problems will remain and eat through any such "solution" like acid through metal. Europe could boost growth: get rid of laws that favor some workers over everyone else. Most European countries still operate as though they were regulating medieval craft guilds. Undoing these bad laws could raise growth by a couple of percentage points almost immediately - but, alas, politicians don't want to offend those special-interest groups so that's off the table. Basically all difficult structural reforms are off the table because they would be "politically inexpedient" so the only thing left to try is... (big fanfare, look of surprise): get Germany to keep paying for other people's expenditures.

Not really a very good game for anyone, is it? So, no matter how you dress it up, it's rather surprising that The Economist should propose it. After all, the eventual outcome will be the same: the collapse of Europe's economies. Why make everyone even weaker by prolonging the game? Why not just accept the fact that things are totally out of control and brace as best as possible for the impact? Better in 2012 than in 2014 when everyone will be in even worse shape because the Greeks will, as always, avoid restructuring and the Germans will be even more out-of-pocket than they are today.


From a German perspective this proposition reads like: the northern European states should - financially - disembowel themselves honourably for the greater good (kinda samurai style)

Or in a more old fashioned style: the Euro demands an unconditional financial surrender of the northern countries.

Nahh, been there, seen it, done that, not again......

MedEwok in reply to Elgratia

The Roman Empire worked very well with many different cultures. Yes, it started out as a succession of wars of conquest by the Romans, but by the time of "Pax Romana" the whole thing was actually rather peaceful (for those times anyways) and held together by a common overarching culture and economic prosperity.

What we need is a Roman Empire reloaded, of course in a modernized form with a fully-flegded democracy, minority rights etc. I'm fairly certain that this could work. It's still better than dissolving Europe into rivalling nation states that attack each other at the first opportunity. We've had that for thousands of years already, and I found the last 65 years of peace to be quite a refreshing change.

"Germany is never going to do for fellow EZ members what it, as West Germany, did for East Germany. "
You got that one right. Especially after we now are experiencing what the real attitude of our southern friends is. There can only be a union of equals. So good bye to Italy, Greece, Spain and Portugal. And perhaps France. I would be happy to have some kind of Northern EU with Benelux, Netherlands, Scandinavia and perhaps Poland and the Baltic.


No debt mutualization. No Eurobonds. No endless fiscal transfers. No recapitalizing parasitic big banks with taxpayers money (pay for it by clawing back the illegitimate bonuses the thieving bankers collected in the last 20 years). No federalism of any kind. No guarantees for Spanish bank deposit at Dutch taxpayers expense.

If anything, the big banks need to be forcibly broken up. And then if necessary again.

Break up the EuroSoviet and abolish the Euro, back to the EEC when we had none of todays problems. End 'TBTF' and end 'centralization of power with the EuroSoviet'.

When will the Economist and all those other pro-bank and anti-people news outlets finally accept that we the people do not want the bankers Euro. Referendum now! And prosecute the big banks for fraud.

For the Economist benefit:
1.Nationalization of the good parts of banks
2.Fire all the bank management (they're incompetent anyway) and put them on trial for theft and fraud
3.Leave the bad parts in the market so Goldman Sachs and co can take the losses for it


poor germany, all that they have to do to save the euro is give a bunch of poorly run, profligate, lazy southerners endless streams of guaranteed financing.

why on earth would one object to that?


The creation of the Euro was the quid pro quo for France accepting German re-unification. The implicit project was to permanently undermine German economic expansion in a French dominated sphere of influence.....this actually prooved to be one of history's greatest own goals.
The blackmail that Germany is being subjected to of Eurobonds is merely the latest manifestation of the "War Reparations" strategy. Nothing has changed in France's attitude towards Germany since the Treaty of Versailles.


Euro is facing 2 evils - the evil of Euro zone break-up and the evil of fiscal/political integration. The real tragedy is nobody knows which is the lesser of 2 evils.

Andover Chick

The Economist's choices of superstate or breakup are way too binary. There is a third option, that only the worst countries get kicked out of the Euro.

Sure Greece will likely get kick, maybe Portugal or Spain too. But that does not prevent Germany, Finland, Estonia, Austria, Luxembourg and perhaps France staying together.


The tone of this article is very anti-Germany...I just don't get it. If you consume more than you produce (Greece) you have no right to "force" the the over producer (Germany) to give you their excess. What right does anyone have to tell Germans they should work extra long thru vacations...produce excess...and then give that excess to someone else...someone who works few hours...does not work weekends...does not work thru holidays. This is just plain wrong. The anti-Germany tone of this article is an injustice to the German people.


Cometh the hour, cometh the woman? Please stand up “Angela Merkel the European”

Make no mistake, Europe is facing its darkest hour since World War II. The fallout from the demise of the Euro will affect all of us to some extent. Jobs and homes will be lost, savings and pensions will be damaged and the resultant social breakdown will undoubtedly lead to disorder and chaos, with who knows what other repercussions.

“To be Europe, or not to be Europe,” that’s the fundamental question.

Today’s European project was founded quite rightly after WWII by a desire to wipe away the legacy of a divided and war-ridden Europe, and to build a new continent of like-minded citizens, bonded together by a mutual rejection of Fascism’s divisive philosophy. “The family of Europe” was meant to supercede and protect against the distortion and abuse of national identity politics.

Undoubtedly great progress has been made over the intervening 67 years, and in many ways the Euro itself has come to symbolise that transformation.

Where once we had 17 different countries each with their own border controls and monetary systems, we now have open highways and just one currency that is equally viable and valuable in Dublin, Berlin and Athens.

But as with all families, there are undoubtedly going to be times when the bonds are threatened by the differences between the members.

Some of the siblings will be better at certain skills than others. Some will find it hard to let go of historical abuses. Some will be bullies and some will be martyrs. Some will cry wolf, and some will take advantage of their fellow siblings while happily pointing the finger at anyone else.

And yet, just as with families, it’s how you resolve these differences that define whether the family stays together and lives happily ever after, or fractures and experiences the torrid emotional, financial and physical impact of a messy family breakup.

Because being in a family, just like being in any sort of relationship, requires commitment, flexibility, forgiveness and an acceptance of your responsibilities.

Right now, Greece needs to accept its responsibilities and pay its debts or leave the family. And equally, Germany needs to accept that if it wants to be in the family, it has to exhibit flexibility and if necessary, a portion of forgiveness.

No relationship is ever going to be perfect, and we should all evolve a little more every day. But without the commitment – as mandated in this case by an election or a referendum – there cannot be a family unit.

Either we’re in Europe together – with all its associated historical and future baggage – or we’re not: it’s as simple as that.

So where does that leave us today?

As at all great crossroads in history, we need a hero, or in this case, perhaps a heroine. Stand up, Angela Merkel. But, and this is the crux of the whole issue, don’t stand up “Angela Merkel the German”, stand up “Angela Merkel the European”.

The whole debate over the Euro crisis is being argued and fought from behind national lines. Should the Germans help the Greeks? Should the Dutch agree with the Irish and the Italians, etc, etc, etc?

And yet that very positioning is missing the whole point. This is not a financial crisis. This is a political crisis, and the crisis is over our identity. Either we are Europeans first and Germans, Italians, Finns, Portuguese, French, Latvians, etc, second, or vice versa.

And that is why “Angela Merkel the German” shouldn’t be standing up in Brussels telling the Greeks to sort their house out. Instead, “Angela Merkel the European” should be standing up in Athens saying: “We still want you to be in the family and we’ll help you, but you need to accept your responsibilities.”

Then if the Greeks still want to be Greeks first and Europeans second, so be it. Either you’re European first and foremost and you take all the responsibilities that come with it, or you leave the family.

Therefore, can “Angela Merkel the European”, or frankly anyone else who can stand up for all of Europe, please do so very quickly.

– A citizen of Europe


Germany is never going to do for fellow EZ members what it, as West Germany, did for East Germany. Culture trumps politics and economics. If the EU was really a union it would be a forum for sharing and mutual aid rather than the pursuit of self interest that we see. If EMU were really a monetary union there would be continual transfer payments between surplus and deficits states and no one would raise an eyebrow. If you want to know what a real union looks like see the UK or US. The EU & EMU should not contain the word union because they are not unions. Rather they are misconceived entities designed to 1. challenge the hegemony of the US, and 2. enable France to suck eternally on the German teat. When Germany finally shrugs off its war guilt, the game is up.


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