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Eurovision diversity beats Euro fallacy

Ideas@TheCentre – The CIS newsletter (Sydney), 4 June 2010

Perhaps this makes me a little daggy, but I love the Eurovision Song Contest. The performances range from cringe-worthy to embarrassing but still are a colourful affair. A continent in which countries used to invade each other on a regular basis now comes together once a year to celebrate its diversity. This is progress, even if it is the form of Finnish monster rockers, gay Serbian folk pop, or hot German chicks.

Perhaps one of the reasons for Eurovision’s continued success is that it showcases the diversity of Europe, and not just in terms of pop music. The member states of the European Union range from the tiny states of Luxembourg and Malta to industrial heavyweights like Germany and Italy. They include countries that are predominantly Protestant like Sweden and Catholic countries like Poland, as well as mainly atheist countries like the Czech Republic. They include countries that have a civil law tradition like France and common law countries like Ireland. They include countries with good fiscal discipline like Denmark and countries with big debt burdens like Greece.

Given this enormous diversity, it always struck me as absurd that all these countries should be united under a common currency. Apart from the technical arguments about optimal currency areas, the very idea of Greece and Finland sharing a currency defies common sense. Why should they share a currency when they haven’t got much else in common?

Markets are belatedly realising this simple truth as well. They are calling the political elite’s bluff that somehow it is possible to gloss over Europe’s differences. Before long, the pressures on the Euro will become so great that even European politicians can no longer ignore this fact. And then it’s goodbye to the Euro – and hopefully welcome back to the Dutch Guilder, the German Mark, and the French Franc.

Once upon a time, a European traveller’s wallet used to be as colourful as the Eurovision Song Contest. Europe can only hope for the return of that splendid monetary diversity. And who would want to listen to the same daggy tune 27 times in a row anyway?

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