From Constitutional Crisis to European Crisis

The Crisis Europe Needs

Europe s Perpetual Crisis

Europe s Trial by Crisis

Europe s Scientific Meltdown

A Eurasian Solution for Europe s Crises

Europe s Crisis of Values

Europe s Crisis of Leadership

European Universities Identity Crisis

Europe and the Global Food Crisis

Is Europe s Financial Crisis Over?

Europe s Time to Learn

The Seven Year Ditch

While markets remained calm, the Cyprus crisis revealed the full extent of the political disaster that the eurozone crisis has wrought the European Union is disintegrating at its core. Europeans current crisis of confidence concerning Europe is far more dangerous than renewed market anxiety, because it cannot be overcome with another liquidity injection by the ECB.

In other words, the financial crisis now reflects a political crisis of the eurozone one that calls into question the very existence of the European project as a whole. If Europe s monetary union fails, not much of the common market, or of European institutions and treaties, will be left.

While 2011 was supposed to be the year when European leaders finally got a grip on events, the eurozone s problems went from bad to worse. What had been a Greek crisis became a southern European crisis and then a pan European crisis.

During the euro crisis, power in the European Union seems to have shifted towards national capitals in general, and towards one national capital in particular Berlin. But, with Germany introverted, France downgraded, and Britain semi detached, the big story in European foreign policy is that the time has come for the little guy who thinks big.

CLAREMONT, CALIFORNIA The debt crisis in Europe is no longer a European affair. Coupled with fears of a double dip recession in the United States, the European debt crisis is dragging the global economy into another cycle of financial panic and economic recession.

As long as the EU s life threatening political crisis continues, its financial crisis will continue to destabilize it. At the heart of resolving the crisis lies the certainty that the euro and with it the EU as a whole will not survive without greater European political unification.

A couple of years ago, the eurozone was in the latter situation. That is why European Central Bank President Mario Draghi s pledge to do whatever it takes to save the euro immediately brought the eurozone s debt crisis to a halt.

Europe s High Risk Gamble

Greek Lessons for Europe

At the beginning of the crisis, in 2007 2008, the eurozone s fundamental flaws could have been corrected had Germany been willing to support a joint European crisis response. But German officials preferred to maintain national primacy and thus a confederational approach to Europe.

MUNICH The euro has brought a balance of payments crisis to Europe, just as the gold standard did in the 1920s. In fact, there is only one difference between the two episodes During today s crisis, huge international rescue packages have been available.

America s military presence in Europe will be gradually reduced, as will its willingness to take the lead in international crises even those affecting Europe s interests. As a result, while the US will continue to provide intelligence, air support, and ammunition on a case by case basis, as it did recently in Libya and Mali, Europe will increasingly have to act first and alone.

Acknowledging the efforts made by the United Nations, the African Union and the European Union to contribute to a peaceful settlement of the Burundi crisis,

Before the advent of the euro, there were many fiscal crises in individual nation states in southern Europe, which produced waves of high inflation. But, with the single currency in place, the road to solving a fiscal crisis through inflation has been closed, as the European Central Bank (ECB) now stands watch over monetary policy.

Eurobonds plus fiscal rules this formula is the euro s best hope for salvation. Unfortunately, another crisis or two might be necessary before European leaders consider it seriously.

In the area of civilian crisis management, the European Union is active in a number of priority areas.

Europe s Dangerous Banalities

Europe, too, faces challenges, and not just from the fact that it now has the worst downturn of the world s major economic regions, with Germany s government warning of a surreal 6 decline in GDP for 2009. The ongoing financial crisis will almost surely slow the integration of the accession countries in Central and Eastern Europe, whose young populations are the single most dynamic source of growth in Europe today.

GENEVA Europe s slow motion sovereign debt crisis may appear unique, but it is not. Just a few decades ago, Europe had the Exchange Rate Mechanism, which collapsed during a crisis very much akin to the one afflicting Europe today.

In 2011, Europe s foundations began to tremble, as the eurozone s sovereign debt crisis, set in motion by the global financial and economic crisis that erupted in 2008, moved from the eurozone s periphery to its core countries. The EU s resilience indeed, its very survival is being called into question at a time of profound geopolitical transformation, in which a stronger Europe is essential.

The IMF s Euro Crisis

The euro crisis had its origin in German Chancellor Angela Merkel s decision, taken in the aftermath of Lehman Brothers default in September 2008, that the guarantee against further defaults should come not from the European Union, but from each country separately. And it was German procrastination that aggravated the Greek crisis and caused the contagion that turned it into an existential crisis for Europe.

But the real danger to Merkel is external the European crisis. If she is unlucky, the crisis will come to a head at the start of the German election year, and all previous calculations could be moot, because, despite Germans frustration with Europe, the electorate would punish severely those who allowed Europe to fail.

The European financial crisis is really a political crisis, because EU leaders are unable to decide on the necessary measures. Instead, time is lost on secondary issues largely rooted in domestic policy concerns.

For the second time in less than four years, Asia is being hit with a major external demand shock. This time it is from Europe, where a raging sovereign debt crisis threatens to turn a mild recession into something far worse a possible Greek exit from the euro, which could trigger contagion across the eurozone.

Well before the crisis, the European Union was widely perceived to be suffering from a democratic deficit. Now, with many Europeans blaming the EU for painful austerity measures, that complaint has grown more powerful and Europe s political leaders believe that they must act now to address it.

The financial sector has since made every effort to design instruments that protect against price fluctuations, to transform private debt into tradable financial securities, and to gain access to speculative markets. But these efforts were conducive to fraud and delinquency, and thus spurred a wave of new financial crises in Europe in 1992, in Asia in 1997, and in Russia in 1998 as well as a recession in Europe and the United States in the early 2000 s.

Of course, I am confident that the eurozone s ongoing sovereign debt crisis will be overcome, and that a more integrated and effective Europe will emerge. But, to get to that improved Europe, not only must the sovereign debt crisis be resolved relations with three major countries to Europe s east Turkey, Russia, and Ukraine will need to be put on more secure footing.

Resolving this crisis requires more Europe and more integration, not less. And yes the rich economies first and foremost Germany will have to pay for the way out.

The 1992 exchange rate crisis then tipped the balance. Once Europe s exchange rate system blew up, the southerners argument that Europe could not afford to postpone creating the euro carried the day.

Eastern Europe s Crisis of Shame

What Euro Crisis?