EU malaise
And now here's my reminder that studying comparative politics without considering international and transnational and supranational organizations makes the study incomplete (IMHO).As Euro Nears 10, Cracks Emerge in Fiscal Union
"The euro turns 10 next January, a milestone that will be marked with celebratory speeches, inch-thick scholarly papers and a commemorative 2-euro coin..."By most yardsticks, Europe’s common currency has been a success, emerging as an alternative to the fading dollar for bond dealers, central bankers, [and] Chinese exporters...
"Yet fissures are forming in the European monetary union that threaten to widen in coming months.
"Greece, Portugal, Italy and Spain... are struggling with eroding competitiveness, rising prices and bloated debts. Meanwhile, Germany, the sick man of Europe for most of the euro era, is suddenly vigorous again...
"When leaders and laggards use the same money but have opposite problems, tensions are bound to surface.
"Take Italy, perhaps Europe’s shakiest economy. Facing high labor costs, slumping exports and a gaping public debt, its old remedy for hard times would have been to devalue the lira. Now, chained to the mighty euro, it cannot do that. Instead, it will probably have to endure a recession and rising unemployment, something no politician — but especially not one just elected, like Silvio Berlusconi — wants to face...
"In some sense, the political honeymoon for the euro ended in May 2005, when voters in France and the Netherlands rejected the proposed constitution for the European Union. While that document had little direct bearing on the currency, it symbolized Europe’s steady march from economic to political integration, a process that, for now at least, has stalled...
"Poland, Hungary, the Czech Republic and other Eastern European countries once hoped to adopt the currency fairly soon after joining the European Union. Now, with a deeper awareness of its cost, most will wait until after 2012..."
posted by Ken Wedding @ 7:23 AM
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