Monday, August 27, 2012

Has ‘Europe’ Failed?

by Nicholas Sambanis

New York Times

August 26, 2012

Last week, European leaders met in Berlin amid new signs of an impending recession and an emerging consensus that Greece could leave the euro zone within a year — a move that would have dire consequences for the currency’s future.

There are many reasons behind the crisis, from corruption and collective irresponsibility in Greece to European institutional rigidities and the flawed concept of a monetary union without a fiscal union. But this is not just a story about profligate spending and rigid monetary policy. The European debt crisis is not just an economic crisis: it is an escalating identity conflict — an ethnic conflict.

The European Union was a political concept, designed to tame a bellicose Germany. Strong economic interdependence and a common European identity, it was thought, would be cultivated by the institutions of the union, as Europeans benefited from the economic prosperity that integration would create.

Elites could sell that concept to their publics as long as Europe prospered and had high international status. But the union has lost its shine. It is slowing down and aging. Its longtime ally, the United States, is shifting attention to East Asia. Its common defense policy is shallow.

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