Ainda se lembram de como todos andavam eufóricos com a subida do euro em relação ao dólar? Mas o dólar desapareceu? Não, pois não?

The Last Opportunity for a Strong Currency

The euro is experiencing the deepest crisis of its short history. Governments in Europe swiftly agreed to a massive rescue package, but it won’t be enough to save the common currency. If the monetary union is to survive, member states will have to abandon their egos and greatly increase political integration.

Speculative attacks, special summits, bailouts, meetings, emergency purchases — it would be difficult to surpass the drama of recent days. They will, no doubt, go down in history.

It’s a watershed moment that will push Europe in a new direction. And the stakes couldn’t be higher. This could be the founding act of a European federal state created out of necessity, as French Finance Minister Christine Lagarde has suggested. But it could also mark the beginning of the fall of the currency union with financially strong countries — like Germany and the Netherlands — wary of too much centralism.

Those aren’t, of course, the only two possibilities: We might see a long, orderly reform process for the euro in the coming months and years. We might see a slide into inflation, with the European Central Bank forced to come to the aid of countries in need of liquidity.

One thing, though, is for certain. European Economic and Monetary Affairs Commissioner Olli Rehn said on Wednesday that the Commission wants the power to force member states to balance their budgets. It is the right move: Those who have no qualms about wracking up debts, should not just assume that the European Union or other states will rescue them. On the contrary, repeat offenders must subjugate themselves to tough control mechanisms. That’s a good signal for the stability of the euro.

Solidarity Yes, But with Clear Rules

Still, it’s not clear whether Rehn can succeed in pushing through his plan. The EU member states must approve such rules — and they aren’t keen to give up additional sovereignty. Just minutes after Rehn announced his intentions, the French government responded, saying it would never turn power over its national budget over to Brussels. German Foreign Minister Guido Westerwelle of the business-friendly Free Democratic Party agreed, saying: “Budget law is a matter for national parliaments.”

But precisely that issue will determine the euro’s survival. Are we ready to give up more money and more power to community institutions? The common currency can only function on the long term if Europeans are ready to show greater solidarity and to cede more control to the supra-national European level.

Europe has nobody to blame for the difficult situation it finds itself in but itself. On Sunday night, finance ministers cobbled together a mega bailout package to the tune of €750 billion — a move that is actually prohibited by EU treaties. The European Central Bank (ECB) in Frankfurt also had to hastily implement measures that they had shunned until now: The ECB and national central banks will now buy state bonds from countries in trouble. Other crisis measures that the ECB had already abandoned have now been reactivated, too.

The old rules no longer apply. But are their new ones? Rehn’s push is a first step in the right direction. But there are real concerns that France and others may torpedo his proposal.


A Nightmare for the European Dream

Political unity, a common currency, border-free travel and lasting peace. The European Union was to have become a kind of eternal utopia. Instead, no one has dared to further develop Europe since the days of Helmut Kohl. Now, the EU is looking decidedly mortal.

Making Europe immortal is a very old idea. After being struck by one of Eros’s arrows, Zeus, the father of all Greek gods, fell madly in love with Europa, the daughter of the Phoenician king. When he later realized that his beloved was doomed to pursue the path of an ordinary mortal, he named a continent after her and proclaimed: “You shall be immortal, Europa, because the continent that has accepted your body shall bear your name for all time.”

You shall be immortal, Europa? The current euro crisis reveals that it isn’t quite as easy as Zeus implied.

“Oh, Europe,” Hans Magnus Enzensberger sighed in the title of his book, published years ago, in which he summarized “perceptions,” or fictitious reports, from seven different countries. Today, “Oh, Europe” are the words any true Europhile must be exclaiming with a sigh.

I am one of those people. I am one of those idealists who have always believed in the European idea and will continue to do so. It was and still is incredible how this continent has bundled together its economic, political and military forces, and that there is more that unites its countries than divides them.


Exactly 10 years ago Joschka Fischer, probably the most ardent pro-European politician in Germany next to Helmut Kohl, tried to correct the situation in a speech on Europe’s finality. The speech, which included multiple rhetorical twists and turns, is still worth reading today — and is also a sad document of European history.

Fischer described a new treaty among nations, “the nuclear of a constitution for the federation,” as an interim step prior to the completion of political union. On the basis of this underlying agreement, the federation could “create its own institutions, a government that should speak with one voice for the members of the group on as many issues as possible within the EU, a strong parliament and a directly elected president. This center of gravity would have to be the avant-garde, the locomotive for the completion of political integration, and already encompass all elements of the eventual federation.”

As we know, this attempt — the constitution — failed. Things have been going downhill for Europe since then. Instead of creating a joint military, Europe must now be worried about keeping its common currency. Europe could end where it began: in Greece. Today, Bill Emmott’s book reads like an early prophecy. Either Europe sees this existential crisis as a chance to correct the mistakes that were made for years, or this potential world power will go down in the history of empires as the first to fail before it even became one.

There are reasons to be very worried about Europe. It is as mortal as a Phoenician princess.