Thursday, July 16, 2015
Guess Who's Coming to Dinner? No One, Angela, No One.
Is it the Euro or is it Angela Merkel - or both? Whatever the case, Merkel's brutal subjugation of Greece has given the neighbours outside the Eurozone good cause to think twice about joining the common currency, the Euro.
Once, it was an exclusive club that nearly all of Europe aspired to join. Now, in the wake of Greece's latest financial crisis and the hard-line response from many of the Continent's powers, becoming a partner in the European common currency seems less and less appealing to many of the countries lined up for their chance.
From Poland to the Czech Republic to Hungary and points farther south and east, joining the euro is increasingly seen as rife with risks and costs - including a substantial surrender of sovereignty - that outweigh the benefits. And while many of the countries that have not yet adopted the single currency had doubts before the Greek crisis flared, the heavy penalties incurred by Athens to stay in the eurozone have made the trade-offs even clearer and the political leanings against membership more pronounced.
The qualms about partnership in the currency raise further questions about the ability of the European Union to maintain momentum toward its long-held and oft-stated goal of ever-closer union. More than any other policy, the single currency was intended to bind the members economically and politically while reducing the chances of conflict, and the decline in enthusiasm for the union has tracked a more general reassessment of European integration.
The doubts are now playing out primarily in the countries that most recently joined the European Union, primarily in Central and Eastern Europe. Lithuania became the 19th and newest adopter of the euro in January.
...Zoltan Pogatsa, a political economist at the University of West Hungary, said the greatest benefits to joining the eurozone came from undertaking the financial reforms required to become a member. Once that stability is achieved, he said, it may be wiser to keep the local currency and peg it to the euro, as Denmark and Sweden have done.
"This way, you preserve your option to devalue, and you do not fall under the technocratic dictatorship of austerity," he said.