Saturday, April 12, 2014

What I Have Been Reading

 Europe: The Struggle for Supremacy, 1453 to the Present by Brendan Simms, professor of the History of International Relations at the University of Cambridge.

The author recounts “the story of highly competitive and mutually suspicious monarchies and republics; of empires, revolution, rivalry, unification and utopias”. The idea of a European success story due in the main to the competition between states and nations is not new, as readers of Eric L. Jones’ The European Miracle know since this latter book publication in 1981.

Neither is the other central geopolitical idea according to which whoever controls the core of Europe controls the entire continent, and whoever controls all of Europe can dominate the world, as Charles V, Cromwell, Pitt and other British rulers, Napoléon, Bismarck, Hitler, Stalin and Roosevelt clearly realized. Halford John Mackinder new as much as early as 1904 when he wrote “The geographical pivot of history” for The Geographical Journal.

Simms emphasizes the continuing fractured nature of the continent as well as the central role of Germany, under the guise first of the Holy Roman Empire, and later as the Second and Third Reich, which has been a constant preoccupation of Europeans because of its geography, its power, and its policies.

Europe indeed is a good read, and Simms strategic and geopolitical approach is illuminating. The enthusiastic comments on the book, however, seem to me a bit exaggerated. What I really enjoyed, among other brilliant insights, is the following analysis of the euro crisis (pp. 527-528):

“If Greece and Ireland actually defaulted, this would cast doubt on the value of previously sacrosanct government bonds and precipitate a general collapse in Spain, Portugal and Italy as investors fled the state bond market. It might even destroy the entire euro-system itself and tip the whole continent and thus probably the entire world into recession. For this reason, the EU and the IMF sought to prop up Irish and Greek finances through a series of largely German-funded ‘bailouts’, which lent money  -- often at high interest rates – to cover the shortfall, in return for a commitment to further austerity measures to bring the national finances in order. The central actor here was Germany, where a struggle erupted between the establishment, which feared that a Greek or Irish default would destroy their own banking system, which was heavily invested in the relevant bonds, and the population at large which was increasingly weary of funding yet another ‘bailout’ for improvident peripheral economies and was registering that fact in the regional elections. By the middle of 2011, in order to avoid further electoral losses, Chancellor Merkel had retreated from her original joint position with Paris in defence of the bondholders, towards an insistence that international investors would have to share some of the losses. This stance, however reasonable in itself, not only infuriated the French, whose banks were even more exposed to Greek debt, but also increased the chance of an escalating sovereign default across substantial parts of the Union.
Taken together (with deep divergences regarding international relations and military interventions, JJR), all this amounted to a severe and possibly terminal challenge to the European project. At the time of writing (2013, JJR) Europe remains in one of its deepest crises since the Second World War.”


And as “Germany was becoming a more ‘normal’ and thus more ‘assertive’ nation, as it left the past behind it … a ‘central secession’ from the EU, by which Germany simply washed its hands of Europe, and reintroduced the Deutschemark, could no longer be completely excluded.”

As I wrote in a previous post, Germany, indeed, is the key to the solution of the “Euro problem”. This should mean, according to the Simms's analysis, the coming breakup of the euro that is more openly discussed in Germany nowadays.


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