The EU is under siege. The arrival of hundreds of thousands of refugees from Afghanistan, Iraq, and Syria has tested the single-border principle at the core of the union. The ongoing financial crisis in Greece has strained the single currency. The United Kingdom will soon hold a referendum on whether or not to exit the EU. The survival of an EU with a single border, a single currency, and a stable membership appears less likely than ever before.
European federalists dismiss these problems as growing pains. The EU is an incredibly ambitious work in progress, they note, one that is rooted in a vision of Europe that challenges deep-seated notions of sovereignty and statehood. Surveying the destruction during World War II, Jean Monnet, considered by many to be a founding father of the EU, wrote, “There will be no peace in Europe if the states are reconstituted on the basis of national sovereignty. . . . The countries of Europe are too small to guarantee their peoples the necessary prosperity and social development. The European states must constitute themselves into a federation.” Monnet’s union would be built through cooperation and common markets and would ultimately resemble a “United States of Europe,” a phrase later embraced by Winston Churchill to describe his own vision of Europe’s best possible future. The question is whether that vision can withstand the blows that have rained down on the EU since the financial crisis began in 2008.
When the euro was adopted, in 1999, many voiced concerns that the monetary union would prevent countries from responding properly to financial crises because they were forfeiting the ability to devalue their currencies, which most economists contend is the best response to such situations. But the political logic of binding the continent together through a common currency trumped the doubts. Supporters of the single currency argued that crises could be averted through adherence to a set of rules (the Maastricht rules) that prevented countries from accumulating too much debt.
The euro supporters’ financial crisis spread from the United States to Europe. In October 2009, George Papandreou became Greece’s prime minister and discovered that his country had vastly underreported its debt levels. Greece’s creditors, particularly French and German banks, were overexposed. The EU called in the International Monetary Fund, fearing that the crisis would spread. It did, and soon Ireland, Italy, Portugal, and Spain were all affected. Negotiations between each government and the so-called troika—the European Central Bank, the European Commission, and the IMF—resulted in EU-IMF programs in Greece, Ireland, Portugal, and Spain.
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