Europe

The economic imbalances within Europe have become too great, particularly regarding productivity differences. In order to correct them, it would be desirable for some countries to be able to devalue their own currencies. Instead of trying to keep such nations within the monetary corset of the euro at all costs, the EU should allow them to depart. None of these sensible options were even on the table at the Brussels summit.

By comparing the different economic conditions of Europe and Australia, it should not be too difficult for Australians to make a choice about economic policy. Mimicking European policies is the surest way to economic disaster.

By comparing the different economic conditions of Europe and Australia, it should not be too difficult for Australians to make a choice about economic policy. Mimicking European policies is the surest way to economic disaster.

To superficial observers, this week’s European summit in Brussels will look like any other high-level conference. Prime ministers, chancellors and presidents will rub shoulders, pose for photographers, and dally with waiting journalists. Once again it will all seem a bit like a school reunion. But the pretty pictures of smiling politicians cannot conceal that the continent is in crisis and the European Union is falling apart.

On a philosophical level, Europe’s crisis can be interpreted as a practical lesson in the errors of constructivism. It shows what happens if grown economic and social structures are wilfully ignored and replaced by systems designed in academic ivory towers and the backrooms of power.

Europe is a continent in crisis. The financial problems of many European economies became visible to the rest of world when Greece only narrowly escaped bankruptcy in May 2010. Ever since, more unpleasant data about the state of public finances in Europe have emerged, putting pressure on Europe’s common currency, the euro. With the focus on finances, it is easy to overlook that many of Europe’s current problems are not purely economic. They are the result of some basic construction errors of the European project.

Charlemagne not only entered the history books as the great unifier of Europe. He also established a stable, silver-backed currency whose weight units survived for more than a millennium in many countries. Giving a prize in Charlemagne’s name to a person complicit in the rapid debasement of a paper currency is another bitter-sweet European irony.

When a German language book causes a global stir, it must be of relevance beyond the narrow national confines. This explains the scores of articles dedicated to Deutschland schafft sich ab (Germany abolishes itself). Written by former politician and central banker Thilo Sarrazin, it covers topics such as the effects of the welfare state on the country’s underclass, demographic change and the ageing society, the failure of public education, and the problems of integrating Muslim migrants.