Last week Germany reclaimed its status as the leading power in Europe. In the two years since it became apparent that Greece was, essentially, bankrupt, there have been dozens of emergency meetings of the countries that use the common European currency, the euro. Most of the euro-using states believe that Germany—with a booming industrial economy, vast trade surpluses, a reputation for fiscal probity, and a history that makes it reluctant to reject the counsel of France—ought to cover the bill. Germany has long argued that Greece must become competitive again by selling off state assets and cutting government handouts.Read more
The walls are going up all over Europe; we shall not see them lowered in our lifetime. The dream of "ever-closer union," and the eventual merging of nations into a United States of Europe, is over. From the white cliffs of Dover in the west, where David Cameron refused to follow Brussels's orders to grant welfare payments to working migrants, to the east, where Hungary's border with Romania is marked with razor wire; from Athens in the Mediterranean south, where a populist government mocks Germany, the architect of the union's fiscal policy, to Stockholm in the Baltic north, where the government has closed its borders to immigrants: The European Union has not only stalled on the road to union—it is coming apart.
Here isRead more
The EU has never looked worse. Last week alone, Denmark rejected the deepening of ties with the EU in a referendum, France's anti-EU party received a leading number of votes in its regional election, and Sweden, Germany, and Austria have all reinstated border control—effectively ending Schengen for most of Europe. Despite these developments, the EU's response never changes: It is always "more Europe."
"A national approach is not enough. We need more Europe," said Etienne Schneider, member of the Luxembourg Socialist Party in response to the Paris attacks. In Madrid two weeks ago, the European Peoples Party (EPP), the largest faction in the European Parliament, recently voted to affirm that, "integration is theRead more
Europe’s migrant crisis, the continent’s greatest humanitarian disaster since the aftermath of World War II, continues to worsen. The summer began with mass drownings in the Mediterranean and bickering between the European Union and the governments of its member states over who should foot the bill for search and rescue patrols of Europe’s southern coasts. The summer is ending with a series of appalling images that have galvanized public opinion, especially in the northern European states, and forced both national and supranational authorities to act.Read more
Across the Middle East, there is concern about the nuclear deal with Iran. By releasing frozen assets and removing economic sanctions, the deal seems to facilitate renewed aggression. Won’t that encourage more violence from Iranian terror proxies, like Hezbollah and Hamas? The international community is preparing its response.Read more
A mass outbreak of syphilis, the radical economist and member of parliament Costas Lapavitsas told an interviewer, is about the only thing the European political establishment did not threaten Greece’s voters with before the country’s early-July referendum.Read more
Flushed with the success of its five-year effort to restore prosperity to Greece, Brussels’ eurocrats have turned their attention to Italy, and ruled that the country’s famous buffalo mozzarella need not be made with fresh milk: powdered milk will do just fine. So Italy will have to repeal a 1974 law that bans the use of powdered and condensed milk in cheese, reports the Financial Times.Read more
David Cameron leaves things late. Leadership by essay crisis, it has been called, a nod to procrastination by generations of students. But his belated response to the mounting political turmoil over Britain’s membership in the EU—a speech proposing an in/out referendum—won’t save him from disaster in the 2015 general election.Read more
Debtors of the world, unite—you have nothing to lose but your IOUs!
That seems to be what the Greeks are discovering—that they have less to lose by default, with all of its consequences, than by trying to be Germans.Read more
A phony peace is unlikely to end much better than a phony war. When the European Central Bank (ECB) poured a total of $1.3 trillion in cheap three-year funding into the continent’s financial institutions, that’s what it got. Sure, it beat the alternative. Lehman part deux was staved off yet again. All those billions (and the suggestion of future ECB support that they represented) were enough to restore confidence that Europe’s sickly banking system would not crumble too far or too fast—for now. Between the announcement of the first of the bank’s long-term refinancing operations (LTRO) in December and the arrangement of the second at the end of February, many of Europe’s stock markets soared, and yields onRead more
"A man attending a wife-swapping party without his wife.” So a very annoyed French negotiator at the latest European summit characterized British prime minister David Cameron’s refusal to trade the future of his nation’s financial center for the approval of the 26 other members of the European Union. Since revision of the basic European Union treaty requires a unanimous vote, Cameron forced the other members to cobble together a new treaty creating a Fiscal Union, rather than draw on existing Brussels institutions to cope with the mounting crisis of the eurozone. An FU to replace the EU, noted more than one wag.Read more
One way to gauge the present state of European unity is to know that Turkey, which has energetically sought membership in the European Union for the past decade, is now having second thoughts about the enterprise. According to the German Marshall Fund, in 2004, three-quarters of Turks thought EU membership was a good idea; last year, that percentage had dropped to little more than a third.Read more
A lot of intelligent money people think this is make-or-break week for the euro. They say that by Friday, December 9, either there will be a path toward resolution of Europe’s debt crisis, or events will accelerate toward a breakup of the single currency. One such is Morgan Stanley analyst Arnaud Marès, who has a record of being right about Europe when others were wrong.Read more
A doctor ignored by a smoker won’t celebrate if lung cancer strikes. Britain’s euroskeptics are generally too worried about the consequences of the Eurozone’s thoroughly predictable crisis to submit to the temptations of I told you so. Well, most of them are. The United Kingdom may be outside the Eurozone, but some British Banquos have managed to crash its beggar’s banquet nonetheless. One, Foreign Secretary William Hague, has compared the currency union to “a burning building with no exits.” He can be forgiven his bluntness. As Tory leader, he had said the same and much more besides when that ill-fated building wasRead more
The German Marshall Fund has released data from its annual Transatlantic Trends survey. The most striking finding: “there remains a very strong transatlantic difference of opinion over whether war is sometimes necessary to obtain justice, with 75% of U.S. participants agreeing with that concept compared to only 33% of European participants.”Read more
With the debt ceiling debate behind us, now might be a good time to get back to the biggest problem currently facing the world economy: the eurozone. While the European debt crisis may have slipped off Americans' radar screens in the past weeks, its significance has not diminished.Read more
The U.S. economy might be on the verge of a double-dip recession, while Europe is paralyzed by a massive debt crisis afflicting the governments on the periphery of the eurozone. Alarming as they are, both of these stories are just part of an even gloomier overall economic picture of the West.Read more
A spectre is haunting Europe—the spectre of the disintegration of the eurozone. All the powers of old Europe have entered into a holy alliance to exorcize this spectre: German chancellor and French president, the Brussels eurocracy and the bonus-laden bankers. Let the ruling classes tremble. The debtors have nothing to lose but their burdens.Read more
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