Europe's Last Great Chance
William Greider
The Nation
June 15, 2012
http://www.thenation.com/blog/168437/europes-last-great-chance

Americans are clucking righteously over the financial
mess in Europe, acting alarmed but privately finding
pleasure in the other guy's misfortunes. Poor, poor,
pitiful Europeans. Why can't they be more like us?
American punditry assures us the end is nigh for the
euro, with the slow-motion breakup of the European Union
bound to follow. Now American politicians have someone
to blame if the US economy goes off the rails. U-S-A, U-
S-A, U-S-A.

My advice to Americans: hold the Schadenfreude. Yes, an
epic drama is unfolding in Europe's financial crisis-
fraught with great risk and painful choices-but it is
not the story we are being told by triumphalist American
media and policy elites. Instead of sneering
comparisons, people should see the similarities between
our situation and theirs. Europe is not busted.

Europeans may in fact be on the brink of achieving great
change-a deep turn in history that is politically
explosive but profoundly progressive. They may not get
there, not yet. But don't count them out.

Events are compelling the nations of Europe to consider
whether they must at last decide to become the "United
States of Europe." That is the subtext for current
events. It was the old dream born after the bloody
turmoil of World War II. It has been patiently nurtured
step-by-step by two generations of postwar Europeans.
Led by Germany and France in grand détente, the high-
minded vision was that bitter rivals could eventually
evolve into the USE-a viable economic rival to the USA.

There are lots of reasons to be skeptical. Completing
the unification would require existing nations to give
up a crucial measure of their sovereign power to decide
taxation and spending. The peoples of Europe would have
to accept a new identity for themselves, superseding
ancient ethnic rivalries. The political systems of
nation-states would have to organize a new unified
structure of centralized governance, more or less like
the United States of America. Irony of ironies, the
once-defeated and disgraced nation-Germany-is now the
economic powerhouse shaping the future, pushing for the
centralized government and politics, to the queasy
discomfort of its neighbors. Can they trust the Germans?
Do they have a choice?

Despite the obvious difficulties, I see two main reasons
why Europeans will push forward toward fulfilling the
original expectation. First, the present system doesn't
work. The euro provides a unified currency that can be
destabilized so long as individual governments are free
to set conflicting fiscal policies-borrowing and
spending their way into deep holes. Politicians are
blameworthy, but the true culprits in this arrangement
are the globalized banks that game the system country-
by-country, piling up impossible debt burdens for
nations, then demanding bank bailouts when nations go
broke. That is not really so different from the debt
crisis that the deregulated banking system created for
the United States.

Second, the imperative for unification is deeply
grounded in European history and social reality. Across
many centuries, these countries have fought repetitive
wars with one another, striving for imperial power or
religious supremacy or control of economic resources.
After Hitler's slaughtering reign, the Germans and the
French and the others came together and agreed, Never
again. They must now create a different future. The
alternative would be too disastrous to bear. The process
is messy and studded with perilous moments, but the
series of new agreements accepting shared responsibility
for nations' debts are de facto steps toward writing a
new constitution for the USE.

The greater political challenge is convincing the
peoples of Europe, who are rightly skeptical about
giving up national sovereignty. They suspect that will
simply create a remote new power center that favors
austerity over the general public welfare. Still, the
step-by-step deal making is teaching a powerful lesson
to European politicians who take care of the bankers and
ignore the popular pain. They can look forward to losing
their jobs at the next election. American politicians,
as it happens, need to learn the same lesson.

Some ill-informed commentators are disparaging Europe's
dilemma by mistakenly contrasting it with the formative
experience in early American history. After the
revolution, Alexander Hamilton took charge at Treasury
and paid off the debts accumulated by the original
thirteen states. He created a central bank to issue US
currency. The founding fathers drafted a constitution
that gave lasting definition to the national-local
divisions of power. This is bogus history. Do not
believe it.

The truth is, the United States has struggled bitterly
with very similar questions of political power for
generations. Some remain bitterly unresolved. From the
start, the United States was pinned down and retarded in
its development by the issue known as "states' rights."
It was really about human rights-the system of slavery
the founders had consecrated in the original
Constitution. After repeated rounds of so-called
compromises, the dispute was finally resolved by a
bloody civil war. Yet retrograde battles over states'
rights are again in vogue.

Likewise, for the money issues. States and regions and
popular opinion persistently resisted the consolidation
of banking and finance decisions at the national level.
Andrew Jackson shut down Hamilton's central bank.
Popular distrust of bankers prevented a new one until
the Federal Reserve was created in 1913. Yet banking and
finance are back on top, despite generations of reform.

If Americans understood the real subtext of Europe's
crisis, they might be more sympathetic. If Americans
were taught their own real history, there would be less
gloating.

___________________________________________

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