The global financial crisis continues, threatening countries across the European continent. A united Europe requires a united solution. To survive this and future economic storms, the European Union needs the capacity to coordinate economic and fiscal policies on the federal level.
Three years after the onset of the most serious crisis since 1929 – and a year after the signing of the Treaty of Lisbon meant to consolidate Europe – financial turmoil continues apace across the continent. Neither the European Council, the Commission, nor the Central Bank is able to stop it. Individual member countries appear defenseless, like sitting ducks, before speculators who perceive the timid measures taken so far as an invitation to continue mounting their attacks.
In short, the financial crisis of the early 21st century has exposed the crisis of governance at the heart of the European project.
The EU today is trapped in the contradiction of a monetary union that lacks the capacity to coordinate economic and fiscal policies. Clearly, widely divergent policies of different countries within a borderless internal market that shares a single currency is untenable.
Europe thus stands at a historical crossroads. It faces three choices:
1. Continue business as usual. That means riding out the unending storm day by day, mired in the clashing assertion of short-term national interests that feed off nationalist reactions and nourish Euro-skepticism. We will continue running after speculators, with ever more solemn statements that no country will be abandoned to its fate. Tentative steps will be taken to amend relevant treaties to overcome particular hurdles. Public opinion will turn against structural reforms that are perceived to be “imposed from outside as the price to pay for restoring market confidence.”
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