Problems with European Unification

Reality Check: Euro-Zone Woes Not Easily Resolved – WSJ.com.

The cult of the euro believes that the currency is a step on the road to a unified continent like a United States of Europe. Let me tell you a story about my experience in Amsterdam, and then we’ll contrast the conditions that led to the creation of the U.S.A with the current conditions in Europe.

I was doing a home exchange with a nice American ex-pat woman who lived by the Noorderkerk. I have visited the city several times, and on this particular day I had no plan. I was just walking around with Missy the dog taking pictures. It was a beautiful, summer day with temperatures in the 70’s with  a light breeze and those big, fluffy white clouds that make every picture you take postcard pretty.

It was lunchtime, and there is this outdoor cafe on the Prinsengracht that I love. I found a table on the canal next to a German couple, tied Missy to my chair and began to peruse the menu. The Germans were trying to flag down the waiter for  something, but he was ignoring them.

I wasn’t happy about this, because I was really hungry and the waiter looked very busy. I girded myself for a long wait, but then the waiter walked right past the German table, approached me and smiled.

“You are American,” he said in nearly perfect American English.

“I’m a hungry American,” I joked.

He laughed and my little joke and replied, “Well, we better get you something to refresh yourself.” I ordered pancakes and bottle of Pellegrino. By the way, if you’re ever in Amsterdam, the pancakes are very hearty and make a very good lunch. I like apples and bacon with mine.

When he left the table, he turned around and completely ignored the German couple trying to get his attention. That’s when my lunch turned into a Monty Python sketch. The waiter was as charming and hospitable as a waiter could be to me and Missy, even bringing her a water bowl without me even asking. He either ignored the German couple or acted with utter contempt and complete surliness towards them if he chose to visit the table.

Upon serving my food, he explained the nuances of the Dutch pancake and told me that the American variety surely descended from the Dutch version served in New Amsterdam and the surrounding Dutch colonies. Then, he turned around, slammed the German couple’s food on the table and walked away without saying a word.

I used to be a waiter, so I had just had to find out what was going on. I asked, “Dude, you seem mad at those Germans. Did they do something to you guys before I got here?”

He replied, “They stole our bicycles.”

This answer was so odd that I knew I was talking to a crazy person. I just nodded my head like I understood and decided to press the issue no further.

Later on, I told the story to my hostess. She smiled and explained, “During World War II, the SS confiscated all the bicycles in Amsterdam. To this day, it is their favorite insult to say to Germans.”

My waiter was in his 20’s, so World War II was a distant idea to him, but all the Dutch still hate Germans.

This is why you’ll never see a U.S.E. Everyone resents the Germans, but then there are all of these other resentments, as well. All former countries of the Hapsburg Empire regard each other with a mixture of mistrust and contempt, and we could go on all day listing the various European rivalries and resentments.

The U.S.A only became the U.S.A when the Constitution was ratified and the federal government assumed the responsibility for each former colony’s war debt. This was not a hard sell. While there were prejudices and a degree of mistrust among the original 13, we had just fought our war of independence together. New York’s war debt kept Virginia free and vice-versa.

Europe is in the opposite situation. They have all fought each other at one time or another. Rather than a war bringing the continent together to fight a common enemy, each major power has taken a turn at trying to subjugate the entire continent breeding resentments that fester to this day.

What helped the U.S.A become the U.S.A was English. We all spoke it and speak it. This means that we can issue one set of laws for everyone from Hawaii to Maine. This does not exist in Europe. One set of laws is created and translated into different national languages where they become different laws due to linguistic nuances.

Ultimately, a common currency will never be able to make up for the lack of a common language and a common enemy coupled with resentments enduring for hundreds of years, but that isn’t going to stop the cult of the euro from trying.

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One thought on “Problems with European Unification

  1. Nice article. I never knew that story about the German SS treatment of the Dutch in WWII. These still-living resentments are an interesting consideration in light of the fact that, Germany was forced to join the EMU by Thatcher, Mitterand and G.W. Bush as price for German reunification. Contemplating this in the context of Martin Feldstein’s expressed fear prior to the euro’s adoption that, the currency union in the end could lead to more war on the continent, the living prospect of such an end seen from the very micro perspective you present only adds to that contentious macro circumstance developing over the past three years, now that the debt trap the euro’s adoption fostered has been sprung.

    Although I quite agree with your perspective per a United States of Europe being unrealistic within the current framework, particularly with regard to language and cultural differences, as well as longstanding animosity born of a history of warfare among the European states, I would also say that the example set by the United States still very much offers a workable framework for achieving European economic unity, whether under a common currency or through a return to national currencies. The thing Europeans need to understand with regard to any venture following the U.S. example is that, the matter of critical importance is not what currency regime should be put in place, but how is currency to be managed such that its value is put on a sustained path to increasing in value, this as measured by physical economic output a currency exists to foster. Therein requires understanding distinguishing a monetarist system, such as is the current arrangement, and a credit system, such as is the U.S. example (which, regrettably, has been abandoned, this most completely following our ending the Bretton Woods system of fixed exchange rates in 1971, as well as has been the ultimate target of imperial intrigues throughout the entire history of the United States).

    I would say that, the fact the United States’ political class possesses zero sensitivity toward the very unique powers our federal system is constitutionally granted for the sake of establishing a sovereign credit system, chances of Europe adopting anything remotely resembling our long-lost heritage probably are close to zero, thereby making conflict an unnecessarily high probability as a result of animosities the euro system is fostering. Then again, maybe Germany will come around and recognize it, too, has a heritage whose establishment was founded on the established heritage upon which 19th century United States acted considerably in accordance with through the influence of such men as Matthew Carey (himself an advocate of the “American System of Political Economy” whose political protagonists included Lincoln, J.Q. Adams, Henry Clay and, of course, Alexander Hamilton), this being in the person of Otto von Bismarck. Should Germany offer current EMU member states a face saving way out via a reform harmonious with those Bismarck put in place to the effect of making 19th century Germany a great industrial power, then a United States of Europe might then find basis for forming for the sake of effecting the sole means by which any currency not only maintains its value, but increases it: through investment venturing to raise the productive powers of labor in their provision of material goods increasingly raising civilized life to its rightful place as the supreme objective of organized government, in and of itself, as well as in interaction with other sovereign governments. Indeed, this is the only end to which any “union” has any legitimate basis for existing at all.

    Seeing today’s increasing animosities stemming from the collapsing imperial monetarist system that is the euro (this in conjunction with the collapse of the larger imperialist monetarist system that is the dollar reserve system), and in the face of this Germany’s insane insistence on an austerity regime whose only effect deepens these animosities, as well as rekindles resentments of old, well, the only comfort is that the United States apparently is not alone in being ruled by a political class that rightfully belongs in the insane asylum. Cold comfort this is at that.

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