europac.net / By John Browne / Monday, November 19, 2012
The euro crisis has begun to feel like an everlasting steeplechase with high hedges and water obstacles blocking the path to economic resurgence on the Continent. Each time a hurdle has been cleared another problem emerges to potentially block the track. The latest developments involve ugly anti-austerity riots across the southern tier and open rifts emerging among the creditors, most notably between the International Monetary Fund and northern nations. Despite the difficulties, I believe that ultimately the horse will pass the finish line; the Continent has too many economic bright spots to simply slip into irrelevance. The big question should be whether the monetary jockey (the euro) will be thrown off the mount before that happens. Investors should prepare for both eventualities. But while the race is ongoing, the uncertainty over the euro currency is galvanizing the push for full political union of the Eurozone and providing effective camouflage for the weakness of the world’s reserve currency, the U.S. dollar.
Future historians of the European Union likely will ponder how democratically elected governments of once proud empire nations willingly surrendered their sovereignty without full and open discussions. The answer lies in greed and fear. By 1950, Western Europe had been ravaged by two horrific Continental wars in 35 years and had been tossed about like a tennis ball in the Cold War match between the United States and the Soviet Union. In light of the situation, the impulse for greater European unity and cooperation was natural.
The key founders of a united Europe were France and Germany. The French sought security by attaching themselves to Germany, while the Germans saw an opportunity for the political hegemony that the two wars could not deliver. But had the idea of European Union been originally presented as a means to empower Germany, few European peoples would have accepted it, least of all the British.