Collective Conscious

At this point I am con­vinced that the only pol­icy which can fully and truly save the Euro­zone finan­cially and polit­i­cally is a com­plete assump­tion of all national debts by a cen­tral author­ity. Europe, as bad as it looks, is in a remark­ably sim­i­lar posi­tion to that in which Amer­ica found itself imme­di­ately fol­low­ing the Rev­o­lu­tion­ary War. It is a loose con­fed­er­a­tion of states, each strug­gling to main­tain inde­pen­dent sov­er­eignty, while at the same time fully cog­nizant of the enor­mous ben­e­fits of more com­plete federalization.

Amer­ica had it easy — there was no inter­na­tional credit mar­ket, no Great Reces­sion, and the idea of Amer­i­can unity had already gripped the gov­ern­ments of the new nation. But in Europe mem­o­ries are longer. Rival­ries date back thou­sands of years; nations are more racially aligned; and the source of crush­ing debt is not a war won together but a divi­sive eco­nomic collapse.

Yet Europe has, slowly and surely, been head­ing for more per­fect union. The cen­tral leg­isla­tive bod­ies press grad­u­ally for­ward to build a Euro­pean iden­tity dis­tinct from national iden­tity, and although their progress has been slow, it is irre­versible. Polit­i­cally, Europe is more uni­fied than ever; mon­e­tar­ily, the Euro is the surest incar­na­tion. It is only in the fis­cal arena that Europe finds itself divided, and that divi­sion is its great­est chal­lenge today.

Europe does not need a bailout. Europe does not need the IMF. Europe alone has the credit and finan­cial resources to save itself, if only it is will­ing to set aside old national feuds and assert its union. Yes, it will prove costly to the great savers of France and Ger­many. Yes, it will be per­ceived as a “hand­out” to the less for­tu­nate nations. But once the debts of Europe are cen­tral­ized, no bond mar­ket in the world can doubt their credibility.

A Euro­pean debt assump­tion would be the most dra­matic and impor­tant event of the new cen­tury. It would tie Europe more surely together than any sum­mit or res­o­lu­tion. It would remove all credit risk from the nations of the Old World. It would spur a fis­cal fed­er­al­iza­tion that would make the Euro the great cur­rency it has failed to become, and it would allow a cen­tral author­ity to pro­vide coun­ter­cycli­cal sup­port for the entire Euro­zone with­out fear of default.

Europe can and should sur­vive; it should not allow its present argu­ments to tear it apart. Large fed­eral unions are, with­out a doubt, the strongest forces in the mod­ern world; the United States, China, and Rus­sia should demon­strate this fact quite clearly. Europe, if it wishes to main­tain any sig­nif­i­cance in the post­mod­ern world, must rec­og­nize this fact and advance itself among the supernations.