An interesting view and commentary on the Euro-crisis. Premise is that a monitary union without a political union is a critical and flawed governance model and that the tension seen now strains around that concept. Well worth the full read….
“Maastricht’s creation of a monetary union without a political one is now seen as a fundamental flaw of the euro project. A consequent, and almost equally common view is that Mediterranean countries then took advantage of the stability provided by the euro to engage in gross fiscal irresponsibility. But Soros decried the euro’s political deficit as a ‘Third-World’ burden on countries on the eurozone’s economic periphery: heavily indebted, in a currency they can’t control (i.e. devaluate).
The ‘centre’ (read: Germany) deserves quite a bit of blame, Soros said, for “designing a flawed system, enacting flawed treaties, pursuing flawed policies and always doing too little too late”, continuing that “[i]n the 1980’s Latin America suffered a lost decade; a similar fate now awaits Europe.”
Indeed, one of the remarkable constants in Europe’s reaction to the unfolding crisis, at crisis summit after crisis summit, is to do just enough to avert disaster, but nowhere near enough to fix the fundamental flaws of the system. Mainly, snorts Soros, because they don’t understand the system’s flaws. Or is there a hidden agenda? If Germany does just enough to save the euro, but not correct its inherent imbalance, then the European Union will become, in the words of George Soros, “a German empire with the periphery as the hinterland.”
Between total collapse and a German-dominated collection of economically subservient states, Soros sees a third option. He foresees that European autorities (i.e. the German government and the Bundesbank) have a “three months’ window” to correct mistakes and reverse the trend towards disintegration.
But this will require a much larger commitment from the European summit at the end of June than the ‘temporary relief’ offered by previous ones. After the window closes, the gap between market demands and the eurozone’s options will become unbridgeable. The subsequent breakup of the euro could chain-react and cause “a collapse of the Schengen Treaty, the common market, and the European Union itself.”
All of which is both terrible and important, but what – I hear you think  – does this have to do with maps? “