Europe: Does the Greek crisis mean the end of the euro?

The European Union’s latest rescue plan for Greece is just another doomed attempt to patch up “a ship that’s leaking everywhere,” said Nicolas Demorand in Paris’s Libération. Greek bankruptcy may have been averted in the short term, but what happens the next time Greece—or Portugal, or Ireland—gets into trouble? Individual eurozone members cannot be allowed to blithely blow their budgets and then drag the rest of us down. It was a mistake for European countries to try to join together in monetary union before we had fully integrated our political union. “To put it brutally: The future of Europe is either bankruptcy or federalism.” I opt for the latter. Europe needs a single, centralized authority to set fiscal policy. Only a federal European government with a single finance minister can bring order to this “Tower of Babel cacophony.”

That analysis is exactly backwards, said Gideon Rachman in the London Financial Times. Europe doesn’t need more integration, it needs less. We simply don’t have a “strong enough common political identity” to support the single currency. When Germany agreed to monetary union in the first place, it was with the explicit guarantee that it would never end up as a “transfer union” that sent money from the rich countries to the poor ones. Yet with the bailouts, that’s what it is becoming. Now we hear Germans openly denouncing southern Europeans as “profligate and corrupt” in an almost racist way. In Athens, meanwhile, demonstrators who believe Germany is dictating brutal austerity measures to them “wave EU flags with the swastika imposed upon it.” The single currency “that was meant to bring Europeans together is instead driving them apart.” Further integration is impossible in such a climate. It makes much more sense for the weak members of the currency union—“above all, Greece”—to leave the euro.

Hear, hear, said Boris Johnson in the London Telegraph. There is absolutely no democratic mandate for the creation of a United States of Europe. Let this classic Greek tragedy play out to its end. “We have had the hamartia: the tragic flaw in the system that allowed high-spending countries to free-ride on low interest rates,” and we all suffered from “hubris: the belief the good times would never end.” Now we need the anagnorisis: the recognition that Greece would be better off with its own drachma. Then we can all experience our catharsis and get on with our lives.

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Let’s not turn this into an “apocalyptic thesis about the end of the EU,” said Wolfgang Böhm in Vienna’s Die Presse. It’s merely a failure of leadership that has made the debt crisis in Greece “turn from a manageable economic problem in one country into a possibly unmanageable credibility problem for all European politics and perhaps even the euro itself.” Had the leaders of France and Germany acted quickly and aggressively to help Greece last year, we wouldn’t be having this ridiculous discussion of tearing up the euro. The fact is, the common currency has perfected the European domestic market and allowed eurozone countries to “achieve growth rates the U.S. can only dream about.” Greece’s troubles are fixable—without killing the euro.