The United States of Europe

In the latest edition of The Economist, the cartoon cover shows a black hole in the middle of which appears the expression “Be Afraid,” which is under the headline “Until politicians actually do something about the world economy…”

This is an extraordinary representation of the current problems. However, in my opinion, it is not getting to the heart of the matter, though it is headed in the right direction. It is argued that there are three reasons for the difficulty in reaching an agreement to resolve the worst global economic crisis WWII: Leaders are far from reaching an agreement as to what action to take. The most clear-cut declaration made was that now they do in fact have “a plan to have a plan.” Secondly, even if a catastrophe is avoided in Europe, industrialized countries are in a position of growing fiscal austerity, which exacerbates the problem. Thirdly, American politicians threaten to disrupt the recovery with their irresponsible financial management. Presently, it is the former who is most responsible for the disorder of the international economic system: the U.S Secretary of the Treasury, Timothy Geithner, expressed his alarm over the “the catastrophic risk represented by the massive number of defaults on the payment of sovereign debt.” Jean Claude Trichet, the ECB president, warned about the severity of this crisis: “The European sphere is now its epicenter.” We will be tending to this issue.

Correcting the huge fiscal deficits caused by the recent economic decline not only contributes to deepening the problem, but its consequences are morally and socially unacceptable to its “victims” and run counter to what, in Europe, is perceived as the state’s goal.

To the extent that rulers are less fearful, the harder it will be to find a definitive solution. Europeans still vehemently disagree as to how to mitigate the situation mentioned above. Every time market turmoil has been reduced, long-term decisions to solve the problem have drifted away.

“Ultimately, the future of the euro will be decided largely in Germany. It has the deepest pockets and its post-war revival is linked to European integration.” The perception from there, unfortunately, is colored by its most intimate and classic historical and cultural stereotypes.

You almost hear an echo of Luther when Wolfgang Schuable, Germany’s finance minister, stated that the “crisis is the result of forgetting about long-term earnings and focusing on short-term gratification.” The German word for debt, “Schulden,” is derived from “Schuld,” which means guilt. They view countries of southern Europe such as Greece and Portugal and, recently, Spain and Italy, as lazy, untidy, carefree and, ultimately, as financial sinners.

The view of what is happening today in the euro economies would be radically reinterpreted if in the end the leaders of those countries had the “political courage” to simply take that route. The revival of right-wing ultranationalist movements in many countries is not a sign of an easy path.

Who today thinks of the U.S. as a “union of transfers” (unjust and inappropriate transfers) of money from one state to another? Someone, let’s say in Texas, would probably think it improper to help, say Florida, when it is going through tough times. Might it be impossible to see Europe move toward that ideal of generous and fraternal economic transfer?