European Union

Can the European Union Survive?

Scholars debate the E.U.'s future but agree the answer is in the economy.

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Yanni Koutsomitis / Flickr

The European Union has had a rough go as of late. Beset by problems, from a flagging euro to sovereign debt crises in Greece and elsewhere to a massive influx of Syrian refugees—not to mention the stinging rebuke of the Brexit vote—many have begun to question whether the European project is likely to survive much longer.

To discuss this topic, the American Enterprise Institute (AEI) on Wednesday convened four scholars to offer their thoughts on the future viability of the E.U. While they disagreed about the answer, one thing united their remarks: the idea that the future of the union all comes down to economics.

Fred Bergsten of the Peterson Institute and Carlo Cottarelli of the International Monetary Fund were optimistic about the union's chances largely because keeping the E.U. together is in the self-interest of Germany, the country with the largest economy in Europe. The pair noted that the introduction of a common currency has allowed Germany to keep its exports artificially cheap and its manufacturing sector booming, which transformed it from a country divided during the Cold War into the success story it is today. As a result, the Germans "will pay any price to keep Europe and the Eurozone together," Bergsten thought.

Desmond Lachman and Vincent Reinhart (both of AEI) had a gloomier take. They likewise emphasized the economic dynamics of the E.U., but rather than seeing those forces as the glue keeping the union strong, they viewed them as the likely cause of its unraveling. The euro crisis has exposed deep flaws in the long-term feasibility of European integration, they said, and there are no quick fixes. Indeed, despite years of monetary stimulus and fiscal '"austerity" measures, the economies of member nations like Spain and Italy remain moribund, with sky-high rates of youth unemployment, rising sovereign debt, and non-performing banking sectors.

Moreover, the heavy-handed intervention of Brussels during the crisis has stoked anti-E.U. sentiment among both target countries—who resent their loss of sovereignty—and better-performing E.U. states (including Germany), where taxpayers are growing increasingly tired of footing the bill for endless bailouts. Should a Greek-style crisis spread to a larger economy, like Italy, Lachman and Reinhart contended, neither the political will nor the resources will exist to save the union.

Lachman noted that political dissatisfaction has already damaged the E.U.'s cohesiveness, prompting the British vote to leave the project altogether and giving rise to a successful Eurosceptic movement across the continent. From France's National Front to Germany's Alternative for Deutschland, a number of anti-establishment, anti-Brussels political parties are letting it be known that they are decidedly unwilling to "pay any price" to preserve the E.U.

Of course, whatever its problems, the E.U. is not likely to disappear overnight. Large taxpayer-funded projects rarely do.

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  1. ” massive influx of Syrian refugees”

    Pro Tip: far from all of them are Syrian.

    1. Using the term “Syrian refugees” for “Middle Eastern migrants” is a pretty good indication that nothing you say about immigration should be taken seriously, in my book.

      Now, if you are talking about people who are actual, verified Syrians, sure. But that ain’t most of the “Syrian refugees”.

      1. Not all are from the MENA region either. I’ve seen increasing numbers of Sub-Saharan and West African transplants during my last couple of trips there.

  2. As a result, the Germans “will pay any price to keep Europe and the Eurozone together,” Bergsten thought.

    Now where have I heard that before…

    1. Otto the First?

      1. Yeah, that doesn’t sound ominous *at all*.

    2. Dammit Hugh! You know that was supposed to be “You know who else …”

      🙁

  3. No.

    Spend any time at all in Europe and you’ll see that quickly enough.

  4. keeping the E.U. together is in the self-interest of Germany, the country with the largest economy in Europe.

    I think that calculus is changing rapidly, as the ME migrant community grows and makes itself felt. One bad terror attack in Germany might be all it takes for a KrautExit.

    1. Since The Krauts are prime instigators of migrant crisis, I have no idea why you think they’d exit the EU over it.

      After inviting everyone to come to Germany, their government is now trying to offload tens of thousands of “refugees” onto the states who didn’t invite them and don’t want them. How the fuck can they do it outside EU context?

      Oh, German populace disagrees? Well good thing Germany is a representative republic, and not a democracy, so opinion of The Mob doesn’t matter.

      1. Well good thing Germany is a representative republic, and not a democracy, so opinion of The Mob doesn’t matter.

        In that case, it might be appropriate to give the largest share of blame to the childless Angela Merkel who doesn’t have to give a thought to the society she her grandchildren would inherit.

      2. Oh goody. Let’s fill all of Europe with the sort of ethnic mix that made Yugoslavia such a fun place right after the dictatorship evaporated.

      3. Well, the current Kraut government is the prime instigator, but they are one election away from losing to the KrautExit movement. As Labour learned to its sorrow in BritExitain.

        I know, that was your point . . . .

        1. Not yet. Current government coalition is SDP-CSU. It’s basically like having GOP-Democrat or Tory-Labour official coalition. Overwhelming majority of voters would have to to become single-issue voters who disregard all of tradition and every policy except “boot out migrants” for four years, and give the indisputable majority to, let’s face it, some racist types among others.

          Brexit is exactly the reason they don’t want more democracy – something like 30+% of Labour vote was for “Leave”. Something like 90% of Labour MPs are for “Remain”. Now there’s a movement to force the Remain/Leave vote in parliament because Mob Rule Bad, Representative Rule Good – and Parliament is 80% Remain.

  5. keeping the E.U. together is in the self-interest of Germany, the country with the largest economy in Europe. The pair noted that the introduction of a common currency has allowed Germany to keep its exports artificially cheap and its manufacturing sector booming, which transformed it from a country divided during the Cold War into the success story it is today. As a result, the Germans “will pay any price to keep Europe and the Eurozone together,”

    I’ve made the below remark many times, but not seen the same idea written much about elsewhere (though i’m sure someone’s done it) =

    – Germany spent the first half of the 20th century killing millions of people in an attempt to subdue Europe
    – In the second half of the 20th century, Europe decided Germany had the right idea after all
    – Germany will now spend the first half of the 21st century realizing that, maybe, it actually wasn’t

    re: the “pay any price”… i thought was remarkable language, considering the first bullet-point above.

    And i think this idea that “nations are rational” and that voters act in ways that properly appreciate cost-benefit is… well, a-historical, naive, and willfully obtuse to actual evolving sentiment in the European public.

    In the end i agree that the EU will hold together, and for bare-economic reasons. But there’s a lot of wiggle room between “stay together” and “fall apart” where lots of change can happen.

    1. … has allowed Germany to keep its exports artificially cheap …

      Talk about getting it exactly backward! Have the mercantilists no common sense at all?

    2. “In the end i agree that the EU will hold together, and for bare-economic reasons. But there’s a lot of wiggle room between “stay together” and “fall apart” where lots of change can happen.”

      There’s also a lot of wiggle room in calling something the EU, sorta like calling what we have O-care, minus about half the most loathsome requirements.

      1. fair point.

        I think the way people typically phrase it is that, “A monetary union without a fiscal union is doomed”

        and any ‘fiscal union’ would require stronger political union.

        In order to keep the EU, member nations would effectively have to agree to devolve MORE sovereignty, and create some new mechanisms for ‘voting’ which don’t simply strip smaller countries of power in favor of bigger ones.

        I don’t really see that happening. So, to your point – i think they could keep the EU… but it would probably require re-defining what the EU really is. Maybe it would be reduced to a ‘free trading-zone’ a la NAFTA, and everyone could go back to their individual currencies and sovereign controls.

        who knows. if you know anyone who’s written good stuff on the subject, i’d be interested in reading any.

        1. As always, Judt’s “Post War” is good, and I’ve yet to see any better.

    1. That guy’s hair and Robby’s hair should get together. They’d make a great couple.

    2. Stupid butt-hurt millennials

      It’s getting to the point where that’s redundant, no?

      Exhibit #582348754736481: Gen Xers/Children of the 80s engage in a little bit of nostalgia and gentle ribbing. Millennials respond with petulant whining.

      1. gentle ribbing.

        For her pleasure

        Whatever those links are, they don’t seem to be responding.

        1. Hmm…

          Eh. Whiny twitter posts aren’t worth all the trouble. You’ll just have to trust me on this.

          1. “Whiny twitter posts aren’t worth all the trouble. You’ll just have to trust me on this.”

            You bet! Thanks for taking one for the team.

  6. RE: Can the European Union Survive?

    If one lived in Europe, then one would pray for the continuation and expansion of the European Union.
    This way, the producing countries can give more of their money to the corrupt and incompetent European nations so they can continue embezzling and looting their national treasuries and blame the producing nations for not giving them more money to steal. If the producing European nations don’t do this, then I’m afraid the corrupt and incompetent nations of the European nations will have no alternative than to make signs comparisons of Hitler to the producing nations.
    Nobody wants that.

  7. They already made a pretty horrific example of Greece by inviting ludicrous numbers of immigrants and then slamming on the brakes as they built up in Greece. In a few years, there might not be a Greece.

  8. I’d say watch the election in France next year. If Marine LePen’s National Front gets in, which they stand a very good chance of doing, that’s France out of the EU. And that’s pretty much the end of the EU.

  9. lt, the Germans “will pay any price to keep Europe and the Eurozone together,” Bergsten thought…. Any price???

  10. In defense of the Germans, if you thought the analogizing of brexit ers to fascists was bad, history makes it a lot worse in Germany. 70 years of indoctrination has made most Germans afraid of themselves unshackled by the EU. The equation of anti immigration or anti EU sentiment with nazism isn’t exactly subtle.

    Now of course those who want to stay in the EU are called Nazis anyway for supposedly trying to take over Europe. It’s a no win position, either way they’re labeled Nazis. This dilemma has cultivated a sort of pathology in many Germans where they see themselves as needing to martyr themselves and maybe some of their neighbors to save the EU from the specter of self-determination which they fear will lead to nationalism.

    Really, Germans are just song what Europe programmed them to do to prevent the Fourth Reich from happening.

  11. In the 80s & 90s, I spent 75% of my time flying from continent to continent advising Governments, Financial markets & Stock Exchanges.

    The world was not at that time led by incompetent idealistic socialists who on 2 continents America and Europe have destroyed thriving economiesin the nae of Globalism.

    NOTHING is idealistically wrong with Globalism – merely how it was introduced – in the process, destabilising the economies of the developed world.

    The Future of an EU Project developed by idealist socialists has zero chance of surviving. The question is “How much further damage to Europe’s economy will occur until the project is abandoned and replaced with a “Europe First” Trading platform.

    Having advised the Chinese Government (in 1991) regarding a significant hurdle to economic growth, can categorically state the China is for “China First” and it is time European politicians swerved to the right and replaced idealism with common sense.

  12. Regardless the crisis, the E.U. is likely to go ahead. write my essay

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