Industry leaders based in Europe rushed to convert their P&L statements into euros as the new millennium dawned, putting King Dollar on notice that a challenger for the global currency throne was flexing its muscles on the Old Continent.
But it turned out the grandees of the Old World were just flashing their peacock feathers. The euro in its current incarnation is a dead duck, or–more accurately–a bloated turkey that can’t fly. It can no longer be denied that euro-notes, adorned with computer-generated images of fake bridges and buildings (the Great Powers couldn’t agree on which portraits of past leaders to honor), have a fake bank behind them.
The pompous powers-that-be in Berlin, Brussels and Paris believed they could will a new world financial order into existence simply by announcing a grand EU alliance that somehow preserved the fiscal sovereignty of each member. Like their predecessors at the end of the 19th century, the diplomats (and bank executives) who toasted each other with fine French cognac in 1999 sadly forgot that national interest always trumps the temporary accommodations of would-be empire builders. A century ago, that kind of miscalculation led directly to the First World War.
The Europeans didn’t bother to set up a real central bank with real powers, the kind that could order up a unified fiscal policy for the entire EU. (When the EU belatedly decided to give the ECB the latitude to imitate America’s Federal Reserve, they forgot to conceal the strings controlling the ECB chief, which are pulled in Frankfurt). They never created a single balance sheet for the EU, the kind where debts are consolidated and weighed against the assets of the whole. They never exchanged a measurable smidgeon of sovereignty for a truly unified fiscal system.
Instead, they waved their white-gloved hands and printed their fake money, exiling Deutschmarks, Francs, Liras, Drachmas and the like to history’s shredders (while the Brits quietly–and wisely–said “no thanks, mate.”) Flushed with this hollow success, the EU doubled down with a dubious European passport, as if a single travel document could erase borders and peoples with centuries of history dividing them.
So, in the 21st century, we’re treated to the spectacle of the European Union holding its nose and covering its eyes as it fails miserably to confront the chaos it’s created–counted in migrating human beings as well as 100-euro notes. Our friends across the Pond have managed to skip the ‘first time as tragedy, second time as farce’ steps and combine the two.
It’s hard to decide which form of political blackmail currently on display in this crisis is more ridiculous–German bankers demanding that Greece mortgage its future to bail out well-heeled bond holders in Europe’s financial capitals or the Greek prime minister scurrying to Moscow to hug Vladimir Putin. Suffice it to say that the feckless stars of this drama are playing Russian roulette with a fragile global economy.
The European Union is demanding that the people of Greece decide once and for all whether to take their medicine or to leave the EU and follow their leaders over a fiscal cliff into the Aegean Sea. They’ll get their answer on Sunday, when Greece holds a snap referendum. The bloodless technocrats in Brussels should not be surprised if the nation that invented democracy adheres to the Greek words from which it sprang: demos (people) and kratos (rule).
But the real choice rests with the EU.
If the EU is truly a Union, then Greece’s debt is Europe’s debt (and a relatively small part of the whole).
If acceptance of the euro forced Greece to give up the only effective tool it could use to lift a depressed economy–the devaluation of its currency–then Europe as a whole must absorb Greece’s balance sheet and help pull the Greeks out of the abyss, without forcing Athens to condemn an entire generation (or more) to abject poverty.
It’s time for the European Union to decide whether the EU really exists–and whether the euro is worth more than a piece of paper with a colorful but meaningless picture on it.