by Gérard Errera
Financial Times
February 9, 2011
In our multipolar world the European Union appears sadly to be something of a deadweight. It should not be so. Strange as it may sound against the recent backdrop of bleak predictions about the eurozone, it even may not be so.
The good news is that the financial crisis has forced governments in the eurozone to realise that having a single currency and a single market without some kind of harmonisation of economic policies was impossible. This explains why France and Germany have overcome their differences, moved to rescue Greece and Ireland and to create a permanent financial stability mechanism and make progress on the convergence of national fiscal and tax policies. This is what the Franco-German proposal for a competitiveness pact is about.
That would have been unthinkable a few months ago and has far-reaching consequences for Europe’s self-confidence and credibility. Those who have predicted the collapse of the euro are the same who 15 years ago, like Milton Friedman, predicted the euro would never see the light of day: wrong. They forget that as Jean-Claude Trichet, the president of the European Central Bank, said recently between 1999 and 2010 14.2m jobs were created in the eurozone, nearly twice as many as in the US, and for an equivalent population. They don’t understand that for Europeans, the alternative to Europe is lasting decline and irrelevance.
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