Are we experiencing the beginning of the end of Europe?

Yanis Varoufakis
Tue 02, 2016, Articles Uncategorized
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I hope not but I fear we may very well be experiencing the EU’s disintegration.

The Eurozone has been, for some time now, in an advanced state of deconstruction. Think about it: If someone were to hand you over a gift of 10 million euros (that would be nice, wouldn’t it?), and you were given a choice between having it credited to a German, an Italian, a Portuguese or a Greek bank account, would you be indifferent? Of course not. You would rather you had the money in a German or Dutch bank account, fully aware of the fact that the probability of a haircut of your deposits is much higher in Italy or Greece. This is a sure sign that the Eurozone is fragmented. There is plenty of evidence that it is fragmenting further (instead of consolidating). For instance, if you look at the concentration of public debt, it is clear that public debt is being concentrated more and more in the banks of the said state (which is the opposite of what should be happening if we had a proper monetary and banking union).

Beyond the Eurozone, Schengen has already been suspended and is under enormous strain as the forces of xenophobia, ultra-nationalism and plain paranoia are taking over. The EU’s inability is come to terms with what is, after all, a mild refugee crisis (as compared, for instance, with that facing Jordan or Lebanon) speaks volumes in this regard.

At the political level, on multiple issues, the EU’s disintegration is everywhere to be seen. Eastern European governments openly declare their opposition to the very principle of solidarity, the British electorate is alienated from Brussels (and will vote to stay in only out of fear of the unknown), Europe’s Southern Periphery is ravaged by an unnecessary depression that is fully due to the toxic macroeconomic management of a Brussels-Frankfurt establishment that is far more interested in pretending to enforce unenforceable rules than to serve the Union’s interests.

To recap, recall the Soviet Union experience. When a non-viable economic architecture is maintained through authoritarianism and brute political will, its collapse is postponed. But when it comes it is very fast and very painful. I hope that Europeans manage to democratise the EU before we have a repeat performance.

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