Europe's summer of discontent signals a crack up

It had to happen. With Europe's economic woes forcing governments to cut spending, riots had to start happening. As the The Times says, the riots in Athens signal the summer of discontent.

David Charters writes from Brussels that the unrest is the result of political ineptitude. Europe's politicians have failed to deal with the problem. "A general strike is planned next month in Portugal after a public-sector wage freeze, while Spain is witnessing growing unrest over plans to raise the retirement age. In the eurozone's most indebted countries, collectively known by the trader acronym PIIGS (Portugal, Italy, Ireland, Greece and Spain) the young are struggling to find work, the middle-aged are having their earnings squeezed and the old will see pension and benefit cuts … The real causes of the coming social unrest are the unreformed public sectors in the Club Med and a failure of politicians to explain just how bad the medicine will taste. In Portugal, the labour market remains tightly regulated under the guise of social justice, while the mismanaged economy of Italy, briefly one of Europe's strongest just a decade ago, has coasted under the cover of the euro and is crying out for dramatic reform."

More to the point, the riots might signal the break up of the European Union, something I flagged earlier this month here. Commentator Eric Margolis says the the problem is the EU expanded too quickly and now it's paying the price as a result of all this financial mismanagement.

"Greece's economy was unready to join the European Union when it was too hastily admitted in 1981, and remains equally unready today. Nor was Greece ready to join the euro zone. Bulgaria, Romania and the Greek portion of Cyprus were and remain similarly unprepared. Yet they were all welcomed into the union while Turkey's 70 million citizens were given the cold shoulder,'' Margolis writes. "In retrospect, it is clear that the EU was expanded too far, too quickly. Now, the new government in Athens has admitted that Greece met the EU's financial admission standards by falsifying its book… Meanwhile, the continuing crisis is depressing the euro and undermining the entire EU. The first result is not so bad, since the overvalued euro hurts European exports. But the Greek crisis is also opening dangerous fissures in the already rickety structure of semi-united Europe. If the crisis infects Italy, Spain and other Mediterranean miscreants, watch out. The EU was expanded too quickly. A smaller EU would be a stronger European Union."

An EU break up will transform global politics forever. Will a smaller EU be any better and more resilient? Maybe, but that's only if it can be more united than this one. Don't bet on it.


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