The European Swan Song: Après Nous, le Déluge

by Crocker on September 21, 2011, 10:36 am

in Economics,History,News,Politics

I’m told by my mother and others of her generation that a sense of forced-cheer infected the US in 1941. Europe had been at war for two years. The military draft began in September 1940 and even before Pearl Harbor, our industrial plants had begun to change over to producing war products with existing defense contractors ramping up with money and assistance from Washington.

The forced-cheer was a manifestation of fatalism, I suppose. Everybody seemed to know that war was coming and it would be awful – although just how awful no one could imagine. There was a sense that European events – world events – were beyond anyone’s control and what would be, would be. Not passivity in the jaws of fate, exactly. Americans tend not to be passive people in the face of fate or anything else, for that matter. Rather, it was a sense of something gaining on them and about to break.  Europe’s deluge was coming to our shores, too. 

I sense something of that mood today. The world is a pretty unstable place just now and no one is sure when the other shoe will drop or even what the particular shoe will be. So uneasy predictions have become the order of the day. Take Bret Stephens in the Wall Street Journal yesterday on what will come along after “Europe” (the quotes referring to the fiction that Europe is anything other than a point of geography):

What is now happening in Europe isn’t so much a crisis as it is an exposure: a Madoff-type event rather than a Lehman one. The shock is that it’s a shock. Greece was never going to be bailed out and will, sooner or later, default. The banks holding Greek debt will, sooner or later, be recapitalized. The recapitalization will be borne by German taxpayers, and it will bring them—sooner rather than later—to the outer limit of their forbearance. The Chinese will not ride to the rescue: They know not to throw good money after bad.

And then Italy will go Greek. Europe’s crisis will lap on U.S. shores, and America’s economic woes will lap on Europe’s—a two-way tsunami.

America will survive this because America is a state. But as Bismarck once remarked, “Whoever speaks of Europe is wrong. Europe is a geographical expression.” The “fiscal union” that’s being mooted will never come to pass: German voters won’t stand for it, and neither will any other country that wants to retain fiscal independence—which is to say, the core attribute of democratic sovereignty.

What comes next is the explosion of the European project. Given what European leaders have made of that project over the past 30-odd years, it’s not an altogether bad thing. But it will come at a massive cost. The riots of Athens will become those of Milan, Madrid and Marseilles. Parties of the fringe will gain greater sway. Border checkpoints will return. Currencies will be resurrected, then devalued. Countries will choose decay over reform. It’s a long, likely parade of horribles.

Andrew Stuttaford in The Corner would add that that the above scenario is “possible” but not “likely”, believing that what happens in Europe won’t necessarily break up the EU but that any crash will doom a good portion of the EU to stagnation or even poverty. And neither is conducive to long term peace and stability.

But was “Europe” ever a unity or is it simply a collection of tribes having only proximity in common? I’ve always thought the latter. Thirty years ago as a graduate student in Britain I watched both Labor and Conservative parties seemingly sleepwalk their way into the then-European Economic Community without any thought to the “European” movement’s longer-term pretensions. I thought then and think now that apart from free trade, the British have very little in common with the Germans, French or Italians – or anyone else in Europe for that matter. And vice versa.

But back to fatalism and funereal moods: everyone here knows that Europe’s deluge will affect us. Just how much, we’re not sure. We watch Chairman Ben’s twisting and easing and we know that all is not well. And in the meantime we adopt deliberate good-cheer.

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