Europe’s financial crisis is a Titanic moment, threatening to bring down not only the EU’s major economies, but its political raison d’être. Is it too late to save the ship?

By Steven Erlanger

Europe isn’t going quietly. In this season of continental crisis, both financial and existential, French President Nicolas Sarkozy has yelled at European Central Bank President Jean-Claude Trichet. The European Union commissioner in charge of justice, Viviane Reding, has insulted Sarkozy, who has fired back. Leaders of smaller countries have openly complained about German pigheadedness and French arrogance. The Germans and the northern countries call the Greeks freeloaders, liars, and worse; the Greeks have said Germany should return gold and antiquities looted by the Nazis.

NATO Secretary-General Anders Fogh Rasmussen, meanwhile, chastised certain members of the alliance over its less-than-successful military intervention in Libya, causing the French and German ambassadors to stalk out of the room.

And everyone seems to be disappointed with Angela Merkel, the calculating physicist who is the cautious chancellor of a united Germany, the largest, richest, and most important country in Europe. Merkel, who has an active and reciprocated distaste for Sarkozy, has her eye more on state elections and her weak coalition partner than on the broader challenge of saving the most important Western political project since World War II. The Germans like to say that Merkel “drives in the summer with winter tires,” but for many her hesitations signal a lack of leadership, and her constant emendations and reversals are undermining her credibility, even at home. At the same time, Sarkozy is more concerned with how to patch together the French political right for France’s 2012 presidential election than in taking political and financial risks for the euro.

In Italy, the latest European country to enter full-fledged financial crisis mode, the prime minister, Silvio Berlusconi, is considered a bawdy joke, while in Britain, the new prime minister, David Cameron, with his spiraling problems of austerity and phone-hacking at home, has abdicated any responsibility for or obligation to the fate of the euro, as if the European Union and the 18 countries that use the common currency were as distant from London as Tahiti.

“Europe is in its most severe crisis in 50 years,” Joschka Fischer, the former German foreign minister, told me. “What appears to be a sovereign debt crisis is really a political crisis. We don’t have the institutions or the political will or the leaders willing to do what is necessary. We’re talking about the success or failure of the whole project of Europe since World War II, and everywhere there is a lack of political leadership.” Read more…

Steven Erlanger is the Paris bureau chief of the New York Times.

As published in www.foreignpolicy.com on July 20, 2011.


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