Europe: After the crisis

by Charles A.E. Goodhart

Vox
November 25, 2011

The Eurozone could come to tatters temporarily. But the European ideal is so powerful that crisis and division will not permanently prevail. European leaders absorbed previous crises and bounced back to drive the European project forward. The same may happen again. This column discusses how the political and economic underpinning of the Eurozone must change to avoid future crises.

Europe has moved forward in fits and starts, ever since it began coming together in the 1950s. Currently it is having a fit. It is hard to see quite how and when this will end, but we doubt if this crisis will end either swiftly or well.

Europe, or rather the Eurozone within it, could easily come to appear in tatters, at least temporarily. But the European ideal has so much power that crisis and even division will not permanently prevail. There have been several prior serious set-backs:

• The break-up of the snake in the tunnel; and
• The collapse of the Exchange Rate Mechanism; and

Each time the leaders of Europe absorbed what were thought to be the prior lessons and bounced back to drive the European project forward yet again:

• The collapse of the snake in the tunnel led to the ERM; and
• The collapse of the ERM led to the single currency.

Perhaps Eurozone leaders will once again react in this way.

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