Working Notes Issue 69 Editorial

Introduction

Economic historians are well used to writing essays on historical parallels with current economic problems, and drawing lessons from the past. In the case of European Monetary Union (EMU), however, there are no historical precedents. To be sure, we have examples of currency unions that have broken up, but these unions typically existed in the context of multinational empires, such as the Soviet Union. When the empires collapsed, so did the currency unions, and it is not surprising that they did so in circumstances of conflict and economic chaos. To ascribe these conditions to the collapse of the currency unions involved, rather than to the breakup of the empires themselves, as some banking analysts have recently done, is clearly unconvincing.¹

Great Expectations

European Monetary Union (EMU) was supposed to be a harbinger of growth and stability for its member states, yet the euro zone debt crisis is now in its fourth year and continues to rumble on, in a seemingly endless cycle of crises, summits and false dawns. The currency union creaks under the deficiencies of the euro zone’s fundamentally flawed design, while its survival and capacity to prosper depend on its ability to fix these design flaws. The stakes are high.

Introduction
What is happening in Greece is dramatic; the IMF/EU plan for saving the country is destroying the country; the Greek people are more aware than a year ago that the remedy is killing the patient. It is destroying any kind of solidarity at European level. It can happen to Portugal, Spain, France, Italy and Belgium. The question is not about our public sector or our corrupt government or about the Greeks that are lazy … The question [is] is the IMF changing the actual character of our European social model [?] ... there is impoverishment of our middle class, a return to the countryside, and emigration of our youth. There is a support network at neighbourhood and village level, because public sector formal social support networks have collapsed … People day by day are not any more fighting poverty; they are fighting for survival.¹                                                                                                       EAPN Greece

Introduction
The post-2007 global financial crisis was, fundamentally, an ethical crisis.¹ This crisis and its aftermath presented in a distinctive way within the euro zone. What distinguishes the euro zone crisis has been the collapse of ‘solidarity’, considered both as a social virtue and as an integral part of the Schumann–Monnet model of a new European order, a renewal of Europe from the ashes of World War II. Unless and until the true meaning of solidarity is rediscovered and reanimated within the political leadership of the EU, there is unlikely to be economic stabilisation and recovery. In other words, a failure to move the Franco–German dominant consensus away from the hegemony established in the wake of the euro zone crisis, and towards a rediscovery of solidarity, will result in the serious risk of the ‘Balkanisation’ of Europe within a generation.