Eurozone Re-Examined

| January 30, 2012

As European leaders meet in Davos this week, I have some advice for them and for policy makers and analysts. The current debt crisis in Europe has no fiscal solution. This is because at its root, it is not merely a fiscal problem.

Imagine if Alexis De Tocqueville were alive today and traveled southbound in the Eurozone from Germany, through Austria, then France, Spain, Portugal, Italy, and Greece: he would notice sharp economic-cultural differences (if the two can be separated), in some ways similar to what he witnessed as he traversed the then young American republic across the pond.

Policy makers operate under a misplaced faith: the fiscal can precede the cultural. Long ago, it was asked at the birth of the Euro how Brussels could enforce its fiscal vision when a member country of the Eurozone violates a criterion of membership such as keeping debt under certain percentage of its GDP.  No effective answer was given.

Ask a Greek or Spaniard to identify himself, and he is more likely to describe himself as Greek or Spanish rather than European – the cultural-political integration has to precede the fiscal. Inside the halls of Brussels, the bickering EU parliament technocrats do more than bicker, they see themselves as Greeks or Germans. I dare say their differences are more pronounced than those between a Massachusetts liberal and an Evangelical Dixie.

For this problem to be solved, a cultural-political integration must take place – a true United States of Europe has be born that shares more cultural similarities than differences. Then perhaps a resident of Athens would support a CDU member running for the office of the president of EU the same way a Californian libertarian would support a Mormon ex-governor of Massachusetts.

An anthropologist declared the reason for the death of Esperanto to be that it is born in a linguistic vacuum with no cultural matrix for support – a language is more than a collection of words and phonetics so that people can understand each other, it has evolved throughout a complex history, inseparable from economics, culture, and other factors. Today, we are looking at the same phenomenon, only instead of a language it is a currency this time.

It took the Civil War for North and the South to be kept together.  Before the war, most Americans did not identify himself as Americans. The idea of a United States of America began to seep into the cultural psyche of America through that war and of course the war before that one – the Revolutionary War, and WWI, WWII.  What is it going to take for Europe?