Perils of European optimism: The inability to imagine failure is reminiscent of 1914
Two years into the financial crisis I was talking to a British investor who allocates tens of billions of pounds, and whose idea of bedtime reading is medieval monetary history. Wouldn't the emerging markets be the winners in this crisis, I asked. She looked me in the eye and said: 'We're not called the First World for nothing'.
The West, she said, and more specifically the Anglo-Saxon West, had a 400-year history of dumping the social costs of economic crisis on to somebody else. Cue the second wave of quantitative easing in America, which exported inflation to the rising economic powers such as
But one Western elite has spectacularly failed to perform in a First World manner: the Europeans. Though the bankruptcy of
The Greek crisis - though an extreme case - provides a textbook in which the Euro-elites can read their future. We are not there yet, but if events in the euro-zone continue their downward spiral this is how it will be.
We now have to imagine a
Just to imagine it prompts the question: why has the European centrist elite proved incapable of swerving away from danger?
Ultimately it is trapped in a structure of its own creation. If we measure just debt, America is in a worse state. Debt equals 100 per cent of gross national product, and rising, with political paralysis. Euroland, taken as an aggregate, is solvent and on paper fiscally sustainable. But the aggregate is no longer backed by political will.
To maintain the rules of the single currency, one after another the countries of the periphery are being forced into a death-spiral of austerity. First
Throughout the crisis, the Euro elite has suffered from the same inability to imagine failure that led to
And once the system fails, the European elite has a historic mind-set it can relapse into: on the day of the Nazi election victory in
As I write this I can feel hackles rising - even my own: it is distasteful for the European centre to discuss the catastrophes that created it. But this 'social silence' lies at the heart of the problem: it is what allows the same politician to pop up on TV arguing that Greek exit from the euro is 'impossible' because of the consequences to the eurozone, then a year later propose it as 'inevitable' because of the consequences of avoiding it.
That said, we are not yet at the position where the majority of voters in stricken countries have deserted the centre. Even in
But the cracks in the political system through which the European peoples have bestowed legitimacy on centrist politics are dangerous. The Greek fascist party,
I know that camp well. When I interviewed migrants from
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