Are we about to see a huge push for a “United States of Europe”? As the sovereign debt crisis in Europe continues to spiral out of control, suddenly this term is popping up in the New York Times and in major newspapers all over Europe. So is this by accident? Surely not. The truth is that there is an overwhelming consensus among the political and financial elite of Europe that a “United States of Europe” is what would be best for the eurozone. However, they are likely going to need a massive financial crisis in order to reach their goal. Right now, the citizens of the countries that make up the eurozone are overwhelmingly against deeper European integration. Without experiencing a massive amount of financial pain, they are unlikely to change their minds any time soon. So who is going to win in the end? Unfortunately, the clock is ticking because Greece is on the verge of defaulting on their debts and several other countries are not that far behind. If Europe does not decide on a course of action soon, the euro is going to collapse and financial institutions all over Europe are going to come crashing down.
Up until now, EU leaders have been handling this crisis by putting out one fire after another. This has been going on for a couple of years, but these bailouts cannot go on indefinitely. Instead of fixing things, “kicking the can down the road” has only delayed the pain and made things even worse.
The EU as it is currently structured simply does not work. The political will for more bailouts is rapidly drying up and politicians in Europe are only going to be able to “extend and pretend” for a little while longer.
Something needs to be done.