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Friday, 24 February 2012

What can Africans learn from the coming post-Euro world?

Bruno Frey argues that far from being unmitigated disaster, the possible demise of the euro and the EU can be seen as a chance for the evolution of a better future Europe :
Even more important is the fear that a destruction of the euro and the EU would lead to a catastrophe pushing all European nations into an abyss. However, no chaos leading to an economic and political collapse of Europe is to be expected. Such a view is far too pessimistic.
The individual countries in Europe will quickly form new treaties among themselves....The result will be a net of overlapping contracts between countries, which the various nations will join at will. These contracts will not be based on a vague notion of what ‘’Europe’ may mean, but rather on functional efficiency. Crucially, the individual treaties will be stable because they will be in the interest of each member...

Some might consider such a flexible net of contracts and jurisdictions to be too complicated and cumbersome, and therefore undesirable. But this is only at first sight. The essence of ‘Europe’ is variety and diversity rather than ├ętatisme and bureaucracy. A net of contracts of which each one serves a particular functional purpose is open to all countries at the border of Europe and beyond. Thus, for example, Turkey could participate in contracts with an economic orientation and would in that role certainly be welcomed by the other European nations. At the same time, it might be excluded from political contracts if the other European members feel that Turkey does not (yet) fulfil the necessary requirements with respect to human rights. This allows for blurred distinctions: Turkey would be part of Europe in some respects, but not in others. This exactly mirrors reality, the only distinction being that the existing EU does not include Turkey but is entangled in what one might call a stalemate.

An association of European states using flexible and overlapping contracts based on functions can be considered desirable as the existing problems would be efficiently addressed while the essence of Europe would be strengthened. A possible demise of the euro and the EU can be seen as a chance for the evolution of a better future Europe.
It is interesting that while experts are now thinking around new ways to offer stable arrangements African leaders are championing deeper regional integration without considering the consequences. The European project had stronger preconditions than any of the current African blocs. It is laughable to think that leaders are trying to move to deeper integration without taking on board its lessons.

1 comment:

  1. The collapse of the Euro if it happens will be bad for Europe and for everyone at least in the interim. However, it plays squarely in the hands of emerging economies..and definitely signals the final shift towards China as the country sitting side by side with the US at the 'economic high table' surrounded by European countries armed with a proverbial economic begging bowl with India, Russia and Brazil with a wide grin as permanent invitees to economic power table. The collapse of the Euro on the hand could be the best thing for Europe as it will finally bring to end a misconceived economic experiment (Euro) without political integration. Europeans expected monetary union without political integration and will ...i.e the Euro is good in principle but I am suprised it lasted this long given the economic, social and political disparities that exist in the Euro Zone area and the wide EU. When this happen we shall see Old Europe i.e German ,the UK, France emerge less battered compared to Portugal, Spain, Greece, Italy, Albania, Croatia, Poland, etc..countries that did not join the Euro will definitely feel vindicated though not immune from the fallout. Scandinavian countries such as Sweden, Norway, Finland with the exception of Iceland (would need to revisit some economic data on Iceland and I would love to hear what Icelandic comrades think). ...the old alliances will resurface as European major economic powers fight for 'clean economic air to breath'. A whole new scramble for new alliances and resources will begin...expect the the full circle here..more like a dejavu or a worst case scenario a nightmare. The fall of the Euro will impact alot of things from immigration to political relations to financial rules to regulations. Here are some important questions: 1. Are African leaders and decision makers learning from what is happening in the Euro-zone given the fact that they have sounded the idea of a common currency? 2. What would be Africa's economic position post Euro i.e would Africa be affected and in what way? 3. What would be the position of the IMF and World bank post Euro given that alot effort to stem the contagion has the blessing of the European central bank (ECB), IMF and WB? 4. Would the failure of Euro go down in history as the spectacular failure of the IMF and World bank?


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