The European combination of wealthy countries supporting their profligate neighbors for the sake of political expediency is coming to an end as Greece is forced kicking and screaming to act responsibly and live within its means.
The European Union was always an idea that looked better on paper than in reality. Europe is a relatively small continent composed of interdependent countries rich in history. Aligning these various countries behind a common currency administered by the barest of federal governments would allow for increased trade and wealth. This situation might possibly allow Europe to supersede America as the world’s largest economy and the Euro as the world’s marquee currency. What could go wrong? Everyone would become wealthy and all differences would be quickly forgotten as they concentrated on administering their new wealth.
In the midst of all this idealistic planning, some rather unsettling points were glossed over. For one thing, Europe’s rich history is filled with strife as its countries have warred with each other for centuries. The 20th Century saw two World Wars that began in Europe and left it in utter destruction at the conclusion of each. Suddenly these countries are expected to forget past rivalries and join together for the greater good of Europe. When two American states reach an impasse over an issue, they lawyer up and head to court. When two European countries reach an impasse over an issue, they arm themselves and head to the battlefield. Greece and Turkey have conducted a protracted war over the island of Cyprus for decades, yet Greece is a member of the European Union and Turkey is a candidate for membership.
Europe is composed of disparate states containing multiple ethnic groups practicing different languages and lacks a common identity. While America is composed of states with multiple ethnic groups, there is no European identity that exists similar to the American identity. Spanish notwithstanding, Americans basically speak English and immigrants are forced to assimilate to some extent, which creates the idea of an American identity. Europeans who came to America were escaping their circumstances of grudges, wars, and poverty along with the class structure that prevented upward economic mobility.
Also, not every country’s idea of achieving wealth aligned with the assumption of hard work to produce goods desired by others as practiced in Germany, Europe’s economic powerhouse. Countries like Greece have never had a strong industrial base and it was foolish to believe they would develop one. Germany developed its industrial base from the ruins of WWII because it desired wealth. If Greece had wanted an industrial base, it would surely have developed one by now. Greece’s idea of easy living involved the transfer of wealth from Germany through the Euro common currency. The Greeks reasoned that they could continue to borrow against Germany’s desire to maintain the European Union. They’ve never had either the ability or the intention of paying back the money they borrowed, reasoning that all would be forgiven eventually.
As they say, experience is the best teacher, and Europe’s experiment with the common currency has been a sobering experience. The Germans are chafing at seeing their wealth being siphoned off to support profligate Greek spending, and French banks are exposed to massive potential losses should Greece default. The Greeks are rioting at being told the party is over and they have to start living within their means. And, waiting in the wings are the ticking economic time bombs of Portugal, Ireland, Spain, and Italy. It appears that the only countries which would profit by joining the European Union are those who wish to bleed Germany and France dry, and these are the very countries Germany and France wish to exclude.
Sitting in the very middle of the European Union debacle and poised to profit handsomely is tiny Switzerland which has maintained its own currency and learned a long time ago to remain neutral in European affairs. This policy of neutrality has served it well and promises to once again be the expedient course of action as the European Union collapses under the weight of its own hubris. Switzerland will exploit its position as a safe haven for European assets, and has pretty much become the mattress under which Europe hides its wealth when trouble comes. Great Britain declined participation in the Euro, preferring to retain its vaunted pound, but has involved itself in European administrative affairs and will feel some fallout in the coming collapse.
Given the history of wars, the lack of a common identity, the desire to overtake America as a world power, and the notion that some of its neighbors lack a strong work ethic, it was pure hubris to think this experiment would result in anything but disaster. Europe will be lucky if the fallout from its failed attempt at commonality doesn’t engulf it in another world war. Most divorces are acrimonious due to shattering of the illusion of love which formed the basis of the union and the division of assets acquired during the union. The European Union was formed on the basis of a love for the idea of increased wealth through cooperative regulations and a common currency. Well, the honeymoon’s over and the spouses are fighting over money. This can’t be good.