Organised chaos

In 1996 Atletico Madrid won la Liga.  I remember this solely because I was in Madrid that night and witnessed what might be termed extensive celebrations, including the riot police at a couple of memorable points.

Until now, that’s probably been as close to organised chaos (and I use the term rather euphemistically) as I’ve got.  But it looks like I’ll have another opportunity come the end of June, when I’m in Brussels on a study trip that will coincide with the next European Council.

After last night’s deeply dispiriting meeting, we are once again in a period of intense uncertainty.  Greek banks could easily fall into a run before we even get to the general election; Hollande has discharged his commitment to put Eurobonds back on the table, without any real consequence; the British continue to irk,  rather than support solutions to a situation in which they have a deep material interest. And Berlin has become like the Kremlin, with us all watching for any sign of flexibility in their position, largely without success.

This week’s discussions about the need to plan for Greek exit from the Euro is surprising, but more because it’s only now that anyone has admitted that such planning is prudent, rather than because it’s happening.  Given the continuing malaise across European capitals, one would have thought plenty of bodies would have at least been thinking about how they would cope with a disorderly exit, not least because none of the EU, IMF or national governments seem to be moving on an orderly process.

It strikes me that at the heart of this is a failure to remember that the Euro is a political project, first and foremost.  The economic benefits were never clear-cut, except for the inner circle of the DM-zone, and everyone knew that in the 1990s.  That was why the Germans insisted on convergence criteria and why some countries got ‘creative’ in meeting them; that was why the Commission’s original plans to have a small Eurozone was overruled by member states; that was why the Stability & Growth Pact was signed, and then ignored.  None of this should surprise us, even if the exposure of EMU’s weaknesses has been particularly brutal over the past 3 years.

Unfortunately, the Euro is at the heart of the EU’s economic project now, especially with the bolt-ons of the SGP and the six-pack, which move us further down the path of an economic government.  Either member states need to recall the political value of the Euro and find a strong and positive set of solutions to the present situation, or they must accept that the moment has passed and suffer the consequences.  Either way, it looks like there’ll be something to witness in June: the choice is between the organisation and the chaos.