When the global financial crisis emerged full flower in 2008, its immediate impact on Europe was seen mainly through short-term declines in exports that quickly rebounded. Europe, it seemed, had dodged the crisis of ‘debt-laded Anglo-Saxon’ capitalism. By 2010 however, the crisis arrived in Europe via the balance sheets of periphery sovereigns, quickly morphing into a crisis of core banks that threatens the existence of the Euro itself. But even if the Euro survives, we must ask to what extent the project of ‘one currency and one Europe’ can be seen as a success or a failure after the crisis.
The European project has become synonymous with the Euro currency but it both predates and goes well beyond the Euro. It is above all a political union that seeks to forge a common European purpose out of diverse national interests. It is based upon solidarity and community. It is based upon trust. This is perhaps what the Eurocrisis puts most at risk, turning ‘partners’ into ‘PIGS’ and membership into moral hazard…MORE