October 13, 2011
According to the laws of aerodynamics, the honey bee is too heavy and its wing shape cannot support it in the air. This, nevertheless, does not prevent it from flying and tirelessly collecting pollen every day, which is the essential raw ingredient in the production of honey.
The sovereign debt crisis has provided fodder to critics of the EU’s institutional arrangements, at home or abroad. According to them, the European project is about to implode. Why, George Soros even compared the situation to that of the defunct Soviet Union ! The euro is described as “the most dangerous currency in the world”(Der Spiegel), the lack of a central government in Brussels is given as a liability, the EU’s soft power approach to foreign policy is being dismissed as less than impressive. From Joschka Fischer to the parties of the Left, many believe that the moment has come to rebuild the Union into a federal superstate, with a central government, a treasury and uniform taxation laws. This overhaul from the ground up of the EU is supposed to solve, almost overnight, all the problems confronting member countries, regardless of gaps between their different levels of economic performance, productivity, labour laws or even attachment to common European values.
I have no way of knowing how many of my fellow commentators have paid 1,700 pounds sterling from their own pocket – as I have in 1997 – to attend international conferences on the monetary union, back when the euro was still a project. As the owner of a small FMCG import business based in Romania, I had considered it my duty to be among the first to learn what the project entailed. Naturally, I would have been happy to be able to use a single currency in order to reduce my transaction fees on every load of goods imported from the UK, and wrote so in a position paper I spread in London among the participants at the conference. During lunch, I was seated at the same table with Russian bankers and an Italian central banker. At the time, I routinely assumed that the Italians, like myself, were interested in learning more about the common currency project as observers, without however hoping to join it as members…
In 1997, I believed that the euro would include initially only EU members with solid finances, high productivity and strong economic performance. Alas, kingdoms like Denmark, Sweden or the UK refused to become part of it. Instead, who would have thought at the time that Mediterranean countries like Greece, Portugal, Spain or Italy would be included in the first wave ? This should have happened, in my view, a decade or two later, only after the euro had been tested by international markets and after southern countries would have significantly improved their economic performance, in a bid to qualify for membership. The fact that the euro’s introduction happened the way it did lends credibility to the theories according to which the planners knew about the flaws, but hoped to use an eventual future crisis to align the EU to the US federal model. Whilst by 1997 the need for another solid reserve currency was more than evident, it made little sense, if any, to draw so many EU members into the project at once, as it has now become clear to all.
And yet, the solutions to the current crisis – be it the shrinking of the euro or even the dismantling of the common currency area – would not, in my view, irreversibly damage the European Union. The proverbial prosperity and stability the continent enjoyed for the past sixty years would not be shattered because the planners went the wrong way about the euro. Both China and the United States, as well as Japan – not to mention weaker EU member states and surrounding neighbours – have become reliant to a high degree on the world’s equivalent of the honey bee, our very own EU. As much as we like to criticise it, or on occasion dismiss it as a cumbersome non-state actor, the European Union is here to stay, even if – and probably just because – it is not simply a version of American-type federalism on the European continent.Florian Pantazi