Wednesday, December 21, 2011

Millions of Problems

This past fall, the European Union Center screened four award-winning films from Europe commemorating a decade of the euro currency. Ireland’s Millions, Denmark’s The Boss of It All, Spain’s Mondays in the Sun and Germany’s The Edukators each told stories of vastly different people, cultures and circumstances, but one element remained constant: money changes everything… but not always for the better. With 2012 ushering in the 10-year anniversary of the euro banknotes and coins, Europeans and others alike may feel somewhat ambivalent about celebrating the occasion.

Greece’s “enormous, unsustainable government budget deficits” have long-since reached the tipping point, as Prime Minister George Papandreou struggled to right the wrongs of years of questionable bookwork by previous governments.1 Ultimately, Greece’s debt crisis cost him his job, forcing him to resign in November.

Ireland’s property bubble burst around the time of the U.S.’s, bringing down financial institutions along with the creditworthiness of the State, who too hastily guaranteed the liabilities of those institutions.

Portugal’s long-tepid economy lacked the structural forms necessary to promote growth and a more export-focused economy.

“And so it goes,” Kurt Vonnegut once observed. The consumer credit binge beginning in 2002 turned out to be too much for the PIGS nations to handle, who now look to the EU “core”—especially Germany’s Angela Merkel and France’s Nicolas Sarkozy—to determine how to proceed. The future of the eurozone, once the hope-filled symbol of prosperity and European integration, remains uncertain. Will there be a “two-tiered Europe”? Should there be? 

Angela Merkel and Nicolas Sarkozy

It is difficult to measure the effects of the euro in generating the current problem. On one end, scholars have found that in cases similar to Europe’s debt crisis, it cannot be argued that over-ambitious credit escalation has been tied to a new currency or federal bank (the U.S., for example).2 Additional factors besides the euro must have been at play. Other scholars debate whether “intense economic integration”—such as that experienced over the last decade in the EU via the advents of the Single Market and euro currency—undermines states’ abilities to weather market competition.3 Once eurozone members cede degrees of sovereignty and control of monetary policy to institutions such as the European Commission and European Central Bank (ECB), who is truly at fault?4 The picture becomes more complex.

Damian (left) and older brother Anthony count their Millions

With Millions (2004), Danny Boyle almost predicts the rise and fall of the euro. It is somewhat ironic, one notes, as the bag of Sterling falls on young Damian’s cardboard fortress the week before the UK is (fictionally) set to trade in the Pound for the euro. Damian quickly learns to doubt the “life-giving” power of money as he observes its perpetual misuse by his older brother and father. Few days but many ethically-questionable investments later, Damian decides to burn the rest of the cash, concluding that with new money comes new problems.

Could this also be the story of the euro?

1 Eichengreen, Barry. 2011. “The Euro’s Never-Ending Crisis”. Current History 91 – 96 (Mar. 2011).

2 Eichengreen, (ibid)

3 Egan, Michelle (2010) “Political Economy” in M. Egan, N. Nugent and W.E. Paterson (eds.) Research
Agendas in EU Studies: Stalking the Elephant. New York: Palgrave, pp. 216-255.

4 Neal, Larry (2007) “Chapter 1: Old Europe, New Europe: The Role of the European Union” in The Economics of Europe and the European Union, Cambridge: at the University Press, pp. 3-21.

Adam Heinz is a second year student in the Master of Arts in European Union Studies program at the University of Illinois. He received his Bachelor’s degree in Political Science and Spanish from the University of Illinois in 2010. He has studied abroad in Granada, Spain and Lisbon, Portugal. In 2010-2011 Adam received a Foreign Language and Area Studies (FLAS) fellowship to study Portuguese. He also was a 2009-2010 Illinois General Assembly General Scholarship recipient. Currently, Adam is working as a Graduate Assistant for the European Union Center. His research interests include the linguistic-economic relationship at the border of Spain and Portugal as a result of EU initiatives. Besides an interest in travel and languages, Adam spends his free time reading, camping and writing music.


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