Critical Documents: European Union

The Tragedy of the European Union and How to Resolve It
George Soros, New York Review of Books

In this article, Soros describes the history of the euro, explains the current crisis, and proposes possible remedies. He begins with the integration of the euro zone and emphasizes the errors in this process. The stability of the euro was negatively impacted by the global financial crisis, which in turn caused the disparity between the creditor and debtor countries to grow. Soros recommends Germany either increases aid given to struggling economies or leave the euro and allow the currency to depreciate to a sustainable level. Policy and institutional recommendations conclude this selection.

Europe’s Bipolar Disorder
Milton Ezrati, The National Interest

This article details the problems of the two competing economic policies being debated in Europe. Whereas the desire of France’s President Hollande to increase spending as a means to repair the economy has essentially been proven unsustainable by the euro crisis itself; the strict austerity policy preferred by Germany’s Angela Merkel is also ineffective, as made evident by an unaffected Greece. Ezrati argues an alternative to these unsuccessful economic approaches is necessary for economic recovery and the longevity of the euro.

What if Europe Fails?
Thomas Wright, The Washington Quarterly, Center for Strategic and International Studies

Although he is not denying the possibility of success, Thomas Wright outlines in detail the implications of a failed eurozone and the different events that may initiate this. Internally, the disjointed eurozone would encounter severe financial hardship and face the development of animosity amongst former member states. Globally, the international economy would fall into depression, due in part to reactionary economic policies that do not facilitate growth and domestic protectionist measures that reject international trade.

The Future of the Euro: Stability Through Change
Mario Draghi, European Central Bank

The president of the European Central Bank evaluates the current dilemma of having a unified monetary policy functioning alongside independent fiscal, economic and financial policies. In order to resolve this, Draghi suggests further integration, but only to the degree necessary. He recommends requiring national budgets, bank regulation, deficit limitations, and a minimal increase in the authority of EU leadership in order to facilitate further unification.

Staring Into the Abyss
Edward Carr, The Economist

The euro crisis has the potential to actualize true reform, in which Europe would come to terms with the changing world around them and agree on how to respond. Ideally, Europe would cooperate, with every country sacrificing in order to resolve the currency crisis. However, Carr argues the more likely scenario is one in which a weak compromise is achieved, and the stability of the euro zone continues to decline.