The Economist on the Eurozone Crisis–limited federalism is a less miserable solution than break-up

What will become of the European Union? One road leads to the full break-up of the euro, with all its economic and political repercussions. The other involves an unprecedented transfer of wealth across Europe’s borders and, in return, a corresponding surrender of sovereignty. Separate or superstate: those seem to be the alternatives now.

For two crisis-plagued years Europe’s leaders have run away from this choice. They say that they want to keep the euro intact””except, perhaps, for Greece. But northern European creditors, led by Germany, will not pay out enough to assure the euro’s survival, and southern European debtors increasingly resent foreigners telling them how to run their lives.

This has become a test of over 60 years of European integration….

Read it all.


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One comment on “The Economist on the Eurozone Crisis–limited federalism is a less miserable solution than break-up

  1. Pageantmaster Ù† says:

    The Europeans appear like rabbits caught in the headlights. At the moment there is still the chance of an orderly set of decisions to for example ease the Greeks out of the Euro and into a new currency. This change of currency has happened many times before, as it did when Greece joined the Euro. Alternatively if the political will is there action can be taken to keep Greece in the Euro.

    Shortly however, decisions may well be taken out of their hands, as for example happened with speculators led by George Soros leading to Britain exiting the Exchange Rate Mechanism after we lost huge amounts under that pressure trying to maintain the parity of the pound in the ERM.

    There are signs that the window in which orderly decision-making can be done is closing, and the pressure is now moving on to engulf Spain, which is a much more serious issue. Events are beginning to close down the options, and then we can all look out. Over here in Britain, I think we have to go back to looking at being a global trading nation, rather than relying on Europe.