Euro a catalyst for continent's decline

stefan-auer-thumbDr Stefan Auer



This opinion was originally published in The Australian Thursday 31 May, 2012. 

Margaret Thatcher knew it already 20 years ago; I argued it in this newspaper two years ago: Europe doesn't need the euro.

In fact, European leaders must face up to the fact that the single currency has irreparably damaged what it was meant to foster: European unity.

Up to now, German elites were unable or unwilling to see the euro for what it is: a source of interethnic strife and the catalyst of Europe's economic and political decline. Enter Thilo Sarrazin, the former German banker who became a bestselling author of non-fiction virtually overnight by shattering the German elite consensus on migration and multiculturalism. No other work of non-fiction sold more copies in post-Second World War Germany than

Sarrazin's Germany Does Away with Itself. The book had its weaknesses - amateur geneticist Sarrazin relied too much on Darwin's evolutionary theory to explain why second-generation Turkish migrants underperformed in German schools - but it hit a nerve in German society.

It spelled out what no respectable author dared to state before by arguing that German migration policies have produced a deeply divided society in which many migrants are trapped in welfare-state dependency.

Now policies that are being introduced to safeguard the eurozone are producing a deeply divided Europe that threatens to lock entire nations in a supranational dependency. Greeks resent the prospect of being ruled by Berlin, Brussels, Frankfurt and Paris as much as Germans resent taking responsibility for Greek public finances.

If any reminder was needed of the untenable nature of that constellation, the chairwomen of the International Monetary Fund, Christine Lagarde, delivered it over the weekend, when she berated Greeks for not paying enough taxes. It will not be lost on Greeks that Lagarde is French.

The same Sarrazin has just published a book that is much closer to his area of expertise. The former banker is sure to have another bestseller on his hands. Its title is as simple as it is compelling: Europe doesn't need the Euro.

Among the more bizarre claims in Sarrazin's book is one foreshadowing Lagarde's controversial comments: the assertion that Greeks are not as fiscally prudent as Germans because there is more sunshine in Greece than in Germany.

What Sarrazin fails to explain is how Europe can return to national currencies while maintaining at least some level of European unity. Its ambitious title notwithstanding, the book doesn't even attempt to present a positive scenario for an orderly retreat from the single currency.

Thatcher was vindicated, but German political elites may yet be vindicated too, though not in the way they would wish for.

German Chancellor Angela Merkel says "if the euro fails, European unity fails too". Others back her. This is meant to mobilise German public support for the costly euro rescue policies.

Instead, their failure is bound to lead to the notion becoming a self-fulfilling prophecy.

Stefan Auer is associate professor in history and politics at La Trobe University. His book, Whose Liberty is it Anyway? Europe at the Crossroads, will be published in June