Are we watching the end of Europe?
Many viewed the transition to a single European currency at the end of the 20th century as a sign that the continent had achieved its goal after World War II and united into a single, peaceful, economic and political entity. Many presumed that Europe would simply continue to expand, eventually bringing peace and prosperity to the continent's most troubled corners, including the Balkans, the westernmost former Soviet states, even Turkey.
But the ever-growing sovereign debt crisis, which in recent weeks has brought down national governments in Greece, Italy, and Spain, now threatens to destroy not just the Euro, but the entire European project. The goal now, it seems, is mere survival.
But survival at what cost? Austerity measures have already led to street protests and strikes in many European capitals.
After the U.S. dollar, the euro is the most traded and largest reserve currency in the world. A collapse of the the euro and the union would severely impact growth and trade between the European states, not to mention global financial markets.
Some have suggested the European Central Bank should buy massive amounts of bonds from individual countries. That way, the theory goes, finance ministers will have the cash to stave off catastrophe while bringing Europe's numerous national economies into tighter fiscal union. But critics say taking on more debt will only delay painful and necessary structural reforms, without which the Eurozone could face decades of stagnation.
What do you think? Is bond buying by the European Central Bank the only option for saving the European project? Or will it simply add fuel to an already raging fire? Worse, will we see a return to the fear, suspicion, and belligerence that resulted in back-to-back European wars in the 20th century?
Photo Credits in Order of Appearance:
George Papandreou, Former Prime Minister of Greece
ECB press office
Prime Minister of the Netherlands
Bundesarchiv, Bild 183-R69173 / CC-BY-SA