Euro crisis

All in all, we are looking at a system of enormous complexity in which no single institution or person is in charge of dealing with the euro crisis. This chaos, although fascinating armchair entertainment, makes it difficult to predict the future of Europe.

The treaty to establish the new European Stability Mechanism is the best example of this fundamentally undemocratic approach. Even its name is misleading.

As it turns out, the euro is not only an unworkable currency. It actually started as a French insurance policy against German power. But even as an insurance policy it has failed. Against their will, it has turned the Germans into the new rulers of Europe. And it has consigned France to be the weaker partner in the Franco-German relationship.

Europe has arrived at the crossroads. It can either go down the path to full-blown fiscal union – and the ECB is clearly ready for it. Or, preferably, it must end the Euro experiment now before any further damage is done. The Germans should leave the fringe countries with the carcass of the Euro – and reintroduce the Deutschmark. It’s the only chance to avert an even greater European debt disaster further down the track.

After a decade of experience with European monetary union in practice, Sarrazin is sceptical about its future. “All attempts to legislate for fiscal stability, limited debts and no-bailout rules have not proved watertight. As it looks now, Europe is on a slippery slope towards becoming a full-blown transfer union,” he said. For someone who has first-hand experience in creating such a permanent transfer mechanism within a country, this must be a frightening prospect.

Everything that’s wrong with Europe, it was on display in Canberra last week. Economic questions are treated as political ones; high hopes have to pass as strategies; utopias are considered realities. And if you harbour any doubts about whether all of this makes sense you better keep them to yourself. For otherwise you leave the sphere of what is officially sanctioned as respectable and politically correct politics.

Unlike some, mainly British, commentators I do not derive any pleasure from looking at Europe’s problems. And though I am quite an EU-sceptic, I would still call myself a Europhile.

As the whole world worried about a potential Greek collapse, another European country experienced two actual bank failures. And no, they did not happen in Portugal, Spain or Italy. In fact, the failures didn’t even occur in the eurozone. The country in question is Denmark.