Saturday, March 19, 2011

Federal Disunity: Civil-War-era US and the Eurozone

Global Policy, a fairly new world affairs journal, has some interesting things to say on the current eurozone troubles. Its quality of links is slightly derivative, with liberal borrowing from the Economist and even Wikipedia. But it's still a worthy read, if for nothing else that its unorthodox comparison of leadership styles of US President James Buchanan (predecessor to Abraham Lincoln) and Angela Merkel.

"... If Buchanan is remembered as one of the worst American presidents of all time, his successor Abraham Lincoln is remembered as perhaps its greatest. Although lacking in executive experience his underlying principle was unwavering: preserve the union at all costs. To this goal he was willing to subsume all other concerns, including his moral repugnance of slavery. To its end he was willing to commit to and sustain a bloody civil war and rebuff suggestions of compromise. Everything else was negotiable, but union was not. The result was a nation ripped apart by an enormously destructive and prolonged civil war, but also one reborn on a stronger footing. The slavery and secession issues that had, since America’s founding, threatened to rip the nation apart were (at an enormous cost) settled once and for all.

"It is from this parable-like take on the American Civil War era that perhaps lessons can be drawn for Europe’s undisputed present-day leader, Angela Merkel. The seriousness of the conundrum she faces is immense. Preservation of the European project requires a willingness to risk political martyrdom on her own part. The case for Germany continuing as the backstop of the Eurozone grows more unpopular domestically every day. Meanwhile the irresolute action and half-measures that characterised earlier attempts to save the single currency have merely postponed the day of reckoning. They have also, at almost every turn, increased the cost and the stakes of the next move. The case of the Greek Bailout is perhaps the most blatant example. Yet time and again her approach has seemed reductionist and pedantic. Bowing to national pressures she has proven more adept at tinkering with the terms of bailouts and turning the screws on profligate states, than on securing a long-term fix for the single currency. The result has been a continuing narrative of core vs. periphery and an ominous slide towards a series of defaults, which even the German coffers will not be able to rebuff."
See the piece in full here