The Road to Economic Crisis Is Paved With Euros - NYTimes.com
This copy is for your personal, noncommercial use only. You can order presentation-ready copies for
distribution to your colleagues, clients or customers
or use the "Reprints" tool that appears next to any
for samples and additional information.
Order a reprint of this article now.
January 12, 2011
Can Europe Be Saved?
peculiarly apt about the fact that the current European crisis began in Greece.
For Europe’s woes have all the aspects of a classical Greek tragedy, in which a man of noble character is
undone by the fatal flaw of hubris.
Not long ago Europeans could, with considerable justification, say that the current economic crisis was
actually demonstrating the advantages of their economic and social model. Like the United States, Europe
suffered a severe slump in the wake of the global financial meltdown; but the human costs of that slump
seemed far less in Europe than in America. In much of Europe, rules governing worker firing helped limit
job loss, while strong social-welfare programs ensured that even the jobless retained their health care and
received a basic income. Europe’s
gross domestic product
might have fallen as much as ours, but the
Europeans weren’t suffering anything like the same amount of misery. And the truth is that they still aren’t.
Yet Europe is in deep crisis — because its proudest achievement, the single currency adopted by most
European nations, is now in danger. More than that, it’s looking increasingly like a trap. Ireland, hailed as
the Celtic Tiger not so long ago, is now struggling to avoid bankruptcy. Spain, a booming economy until
recent years, now has 20 percent unemployment and faces the prospect of years of painful, grinding
The tragedy of the Euromess is that the creation of
was supposed to be the finest moment in a
grand and noble undertaking: the generations-long effort to bring peace, democracy and shared prosperity
to a once and frequently war-torn continent. But the architects of the euro, caught up in their project’s
sweep and romance, chose to ignore the mundane difficulties a shared currency would predictably
encounter — to ignore warnings, which were issued right from the beginning, that Europe lacked the
institutions needed to make a common currency workable. Instead, they engaged in magical thinking,
acting as if the nobility of their mission transcended such concerns.
The result is a tragedy not only for Europe but also for the world, for which Europe is a crucial role model.
The Europeans have shown us that peace and unity can be brought to a region with a history of violence,