What next for Europe?

A lively account of the euro zone crisis also offers a sensible analysis of possible directions for the zone

Sat, Jul 19, 2014, 01:00


Book Title:
Unhappy Union: How the euro crisis – and Europe – can be fixed


John Peet, Anton LaGuardia

Economist Books

Guideline Price:

As Greece, Ireland and Portugal succumbed to bailouts, the commission began drawing up detailed plans of how to manage a euro break-up.


Turning point

In the end Greece survived. The book pinpoints two turning points in the second half of 2012 that calmed the crisis – German chancellor Angela Merkel’s decision, after her summer break, that Greece would stay in the euro and new ECB president Mario Draghi’s pledge to do “whatever it takes” to preserve the euro, namely through his commitment to the bond-buying programme known as OMT, which succeeded in calming markets without having been used.

Unhappy Europe will not only appeal to those with an interest in the minutiae of the euro zone crisis. Much of the book analyses the impact of the crisis on the European project itself, as well as assessing where Europe now stands.

Among the changes brought about by the financial crisis has been a shift in the balance of power, both among member states – with Germany becoming the reluctant leader and Britain and other non-euro states drifting further away from the core – and the various EU institutions.

The crisis resulted in more power shifting to national governments as states took control of events, alongside the ECB, which the book describes as an “intensely political actor” despite its remote image.

The book argues that the commission has never achieved the pre-eminence it enjoyed under Jacques Delors in the 1980s and rejects the notion that the European Parliament can fill the democratic void between citizens and the EU.

Instead, national parliaments should scrutinise decisions taken by their ministers and prime ministers in Brussels and be given greater powers to veto or modify European legislation.

Other suggestions include greater risk-sharing including the introduction of euro bonds, quicker restructuring of problem sovereign debt (including giving Ireland more time to repay its bailout loans), and a more slimmed down commission – perhaps a system of senior and junior commissioners.

Perhaps by virtue of its brevity Unhappy Union leaves some stones unturned – the EU’s colossal unemployment problem is not explored, for example.

But beneath its rather staid cover is a lively account of the euro zone crisis and a sensible analysis of where Europe should go from here.