Euro Crisis

The Euro-Crisis Has Historical Parallels With Past European Crises

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The euro-crisis, although a modern phenomenon, has strong parallels to some of Europe's troubles in the twentieth century. Indeed it was the two world wars that motivated Europeans to create the European Union and later, in part, the single currency. Over at the New York Times Prof.Hal S. Scott has done a good job at outlining the similarities between Europe's twentieth century wars and that continent's current discontents, as well as how the crisis threatens to envelop the United States.

Prof. Scott begins by highlighting an often overlooked part of the euro-crisis, the disconnect between Germany and the rest of Europe:

One fundamental parallel with the two world wars is the tension between Germany and other European states. While successfully integrated into Europe, Germany remains the Continent's most powerful economic force, with higher productivity and economic growth rates and lower inflation than the other major European countries, including France, Italy, Spain and Britain. In the periods leading up to the world wars, Germany's neighbors rightly feared and deeply resented German military power. Today, they fear German economic power even while they plead with Germany to come to their aid.

The European Union has never managed to get anything of substance achieved (for better or worse) when Germany and other major European nations like France disagree on policy. Such a situation is currently unfolding, with the socialist French government calling for the pooling of debt through Eurobonds, a proposal that has been rejected by the Germans.

Germany faces potential backlash from its European neighbors if it vetoes future bailouts, a possibility that is being openly considered by some in the German government. Even if Germany does yield to pressure from countries in need of rescue there just isn't enough funds for Germany to be able to rescue all of the countries that might need assistance. Prof. Scott warns of putting too much pressure on the Germans:

Too big a reparation burden on Germany after World War I contributed to the rise of the Nazis; in contrast, after World War II, we used the international approach of the Marshall Plan to rebuild Europe. Instead of placing another impossible burden on Germany, we must again take international action.

While Prof. Scott is right about the pressures on Germany and the relationship it has with the rest of Europe I am not sure he is right that what is needed is more involvement from countries like the United States and Japan. Prof Scott proposes a Bretton Woods II:

What is needed is an international approach, led by the United States, China and Japan, channeled through the International Monetary Fund, and perhaps considered at an international conference — Bretton Woods II.

Although Germany might well face backlash for not bailing out irresponsible countries, it will almost certainly be domestically isolated and not a threat to Germany's civil society or the security of Europe. However the euro-crisis unfolds and however Germany reacts it will be important to keep the historical parallels in mind. 

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40 responses to “The Euro-Crisis Has Historical Parallels With Past European Crises

  1. Considering the kind of crap we’ve had to put up with in the name of avoiding wars, maybe we’d be better off just learning to put up with the wars.

    1. Unfortunately, war is the only cure humanity has for its collective insanity.

  2. So, does that mean, I, as a young male, will soon be sent to go march over France?

    Because as long as I get to raid some wine cellars, steal some art work, and bang some French broads…. eh, better than a War with Iran.

    1. There are plenty of hot persian chicks.

      1. YES!

        Just google “Hot Persian Women”.

        1. Sarah Shahi comes to mind.

      2. But rare bottles of Bordeaux to raid? Not so much.

  3. A post that Godwins itself before a single comment can be made. Excellent.

    You know who else had a crisis?

    1. Infinite Earths?

      1. Electronic Arts?

        1. Mid-life

          1. Confidence?

  4. I am pretty sure the plural form of ‘crisis’ is ‘crises’.

  5. I don’t think that Japan, USA or China are any position to help out as Prof. Scott suggests. The one positive is that the euro acts as a kind of gold standard, this has now forced the actions of some reckless nations to come to a reckoning, one can only hope that Germany prevails over France and the club med countries and their irresponsible demands for a bailout.

  6. lower inflation

    Huh?

    First off Germany shares its currency with the rest of the Eurozone. Second inflation is a monetary phenomena.

    How is it even physically possible for Germany to have lower inflation then other eurozone countries?

    I think Scott is confused.

  7. “the socialist French government calling for the pooling of debt through Eurobonds, a proposal that has been rejected by the Germans.”

    How is this request anything other than “hey you are rich and stable, and we screwed everything up, so can you give us some of yours?”

    WTF.

    1. Federal appeals court says such parties don’t even have to ask.

      http://www.acting-man.com/?p=19030

    2. I’ve been trying to get Bill Gates to cosign a little ol’ $10 million line of credit with me.

  8. So putting too much economic pressure on Germany once again is out of the question because it might crack and fire up the ol’ Wehrmacht, but hitting the United States up for cash is fine. Does Scott even know which is the only country to ever go so apeshit as to actually drop the bomb?

    1. Yep. Too much pressure on Germany = Hitler. Too much pressure on the USA = sweet, sweet Global Serenity.

      Just as the Cherokee, Apache, Nez Perce [et al], Japan, Cuba, the swine flu, polar bears, the Hessians on Christmas…fuck with us and we will KILL YOU TO DEATH, MOTHERFUCKERS!

      Bitch be CRAZY…

      1. Hey now, Massachusetts is about to elect a Cherokee to the Senate, right? Nothing to fear from the USA.

    2. C’mon dude, Germany is a way bigger threat to global peace then the US.

      Which one has built military bases all over the globe in a campaign of militaristic imperialism?

      Which one has attacked and subjugated countries in North Africa and the Middle East in a bid to conquer the globe?

      Which one had concentration camps for an unpopular minority in the 40s?

      Which one employed Nazi rocket scientists in order to beat the Soviets technologically?

      Which one has a robust security state that prosecutes citizens on flimsy evidence and encourages them to rat one another out?

      1. Germany is a way bigger threat to global peace then the US.

        Technically the globe is a few western culture countries on the smallest Continent which in fact is really not a continent but a subcontinent.

      2. Dude, the US is nothing compared to the Terran Empire. We have to beware goatees!

        1. I do not threaten, Episiarch. I merely state facts. I have found you to be an excellent commenter. Our threads together have been both successful and profitable. However, I shall not permit your aberrations to jeopardize my position.

          1. I submit to you that HitUndRun is illogical because it cannot endure. I submit that you are illogical to be a willing part of it.

            1. I do not intend to simply disappear as so many of your opponents have in the past.

              1. You would find me a formidable enemy.

        2. What we really have to fear is the Alliance.

    3. Only because we had it first. I think that at that time, any country who got it first was going to use it. Just think if Hitler would have had it first. I doubt that he would have stopped with only 2 cities.

  9. What is needed is an international approach, led by the United States, China and Japan, channeled through the International Monetary Fund, and perhaps considered at an international conference ? Bretton Woods II.

    Is professor Scott really a LaRoucheite?

    Another Bretton Woods will have the exact same chance of succeeding as the first one: ZERO. In order to have a successful cartel, people would have to put their self-interest in a mason jar inside their cellar and trust that the other members will do the same. Right, gang?

    If you can’t have a working cartel in the real world, what makes this imbecile think this one will succeed?

  10. Today, they [the Eurozone countries] fear German economic power even while they plead with Germany to come to their aid.

    Instead of a Dark Lord, you would have a queen, not dark but beautiful and terrible as the dawn! Tempestuous as the sea, and stronger than the foundations of the earth! All shall love me and despair!!

  11. It looks like a mirror image to me, rather than a parallel — Two world wars where Germany tried to preserve its standard of living and “cultural values” by seizing land and property from the rest of Europe, vs. the rest of Europe trying to preserve its standard of living and “cultural values” by shaking down Germany for cash.

  12. Prof. Scott begins by highlighting an often overlooked part of the euro-crisis, the disconnect between Germany and the rest of Europe:

    So Dr. Scott says this relationship is rocky? Somebody needs to go to Frankfurt to help clear this up.

  13. Prof. Scott begins by highlighting an often overlooked part of the euro-crisis, the disconnect between Germany and the rest of Europe: . . . Germany faces potential backlash from its European neighbors if it vetoes future bailouts,

    Ah, the “France is Europe” meme is alive and well.

    There’s lots of opposition to the bailouts in the Euro countries that would be on the bailing-out side, like Estonia, where people aren’t particularly happy they agreed to send money to a richer country that cheated to join the Euro in the first place. The British and other non-Euro EU members aren’t likely to be particularly angry at Germany in particular. The non-EU countries mostly won’t be pissed at Germany, either.

    1. Didn’t one of the countries that start with Slov hold up a bailout briefly?

  14. Sometimes dude you just have to roll with it man.

    http://www.Anon-at.tk

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