This weekend brought a renewed wave of eurozone anxiety as the Greeks to the polls to express frustration with the terms of the bailout deal. Both major parties challenged the existing deal, but the lesser of two evils succeeded. Who benefits from a global recession or increasing euro integration? (Spoiler alert: Not the Greeks.)
Economists and politicians furiously speculate whether the Euro will collapse or if Europe will solve its fiscal woes. Those speculations have not been entirely rational. We look at some of the current, and likely, conspiracy theories to emerge from a eurozone collapse.
1. Finland kills the euro
Today, everyone with access to broadband internet is speculating about when and if Greece will leave the eurozone. And if so, whether speculators will then bring the crisis to Spain and Italy.
But what if the end of the euro lies not in the weakest states, but the strongest? Although a prosperous country with a small debt load, Finland suffered huge setbacks during the Great Recession. The eurozone’s downturn has hit Finland particularly hard because Finland is well-integrated into the global economy. In an interesting article for the Wall Street Journal's Marketwatch, Matthew Lynn argues that Finland will leave the euro first, because it’s a small country with a strong economy being buffeted by the troubles of weaker states.
| Related: Austerity Doesn't Work, Part 439: England's Economy Sucks |
In addition, there are signs of political turmoil. The True Finns, a nationalist and anti-euro party, have been steadily increasing their share of the Finnish vote. If the euro continues to suffer, parties like the True Finns will prosper and if an economically sound country like Finland were to leave the euro, it would signal that currency is truly in jeopardy. Even if it’s not Finland, that stronger countries are reconsidering the currency union is a bad sign for the euro. And for Germany.
2. Germany planned this from the beginning
The German dream is at hand. What they’ve been unable to achieve through guns and tanks, the unified Germany is about to achieve through austerity and export-based economic prowess. This Friday, Floyd Norris at the New York Times wrote this alternate history of the euro as if Germany had intended to dominate Europe from the euro’s outset. Norris is careful to note that there is “no evidence of any such conspiracy. But if there had been, things might have played out more or less as they have.”
As the euro crisis deepens, Germany has taken on greater and greater power in dictating fiscal policy to eurozone states. This result is inevitable considering that such a strong economic union requires a closer political union. The euro worked fine while EU countries were growing. But, after the global downturn, the European Union can’t hope to control country’s economies without the power to control their political mechanisms. There are too many competing states to a coherent economic philosophy.
That’s why Europe has reached an impasse. Either the euro ends or the EU gets stronger. The former hurts Germany, the latter empowers them tremendously. A strong European Union would entail a strong Germany, as the German economy would continue to boom on the backs of southern Europeans. Ordinary Germans complain that they’re being forced to subsidize the sins of the Greeks and Spanish. They can't complain about that this time.
If the euro survives, Germany will accomplish what it couldn’t through blood, sweat and tears. A German continent that serves as a vehicle for German economic and political interests. The price of integration would be more bailout money for lesser states. But that money would be a drop in the bucket compared with the benefit to the German economy. That’s why, if the euro survives, you’ll start to hear more of a German conspiracy. After all, isn’t this what they thought would happen all along
Next: The Euro Collapse Elects Mitt Romney
---
Follow on Ology: Joe Hines | PoliticOlogy
Follow on Twitter:@JPHines90 | @OlogyPolitics
Comments (0)
Be the first to comment!