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Eurozone Crisis as Historical Legacy
MARY ELISE SAROTTE is Professor of International Relations at the University of Southern California. She is the author, most recently, of 1989: The Struggle to Create Post-Cold War Europe. This publication is a part of CFR’s International Institutions and Global
Governance program and has been made possible by the generous support of the Robina Foundation.
As former U.S. Secretary of State James Baker once observed, "Almost every achievement contains within its success the seeds of a future problem." The eurozone crisis of 2010 provides a trenchant example of this phenomenon. When the long-sought but controversial implementation of a European Monetary Union (EMU) finally began -- as part of the bundle of deals that produced German reunification 20 years ago, on October 3 -- it represented a significant accomplishment. Though the idea of a single European currency had been around at least since the Werner Report of the 1970s, German reunification provided the necessary catalyst. For all the success of that achievement, however, it left behind fateful seeds, which sprouted into the 2010 crisis.
The eurozone crisis resulted not only from the economic woes of weaker member states but also from flaws in the Maastricht Treaty and from Germany's long-term declining interest in European cooperation. Since a crisis is a terrible thing to waste, the members of the eurozone should use the sovereign debt debacle of 2010 as a second "1989 moment." They should retrofit the eurozone with the greater political institutionalization needed in the post-Cold War era -- a goal Germany sought but failed to achieve at the end of the Cold War and now no longer prioritizes. In other words, the best way to deal with today's issues is to finally address two decades of unfinished business.
The Bargain of 1989-90