The contradiction of a single European currency within fragmented European member-state economic policies was well known before the introduction of the Euro. Back in 1989 we edited a collection of essays about the 1974-1979 crisis and theories relating this crisis to patterns of uneven economic, technological, and spatial development in industrialized countries (Gottdiener, M. and Komninos, N. (1989) Capitalist Development and Crisis Theory: Accumulation, regulation and spatial restructuring, London: Macmillan and New York: St Martin’ s Press.)
Among the essays of this book is the paper of Klaus Busch “Nation-state and European integration: Structural problems in the process of economic integration within the European Community’ (pp. 123-153), which points out at the contradictory way of the European economic integration and foresees the current adventures of Euro, stating that Europe must learn to live with this.
“The member countries with a lower development level, he wrote, cannot accept an Economic and Monetary Union charactrerised by a sole Community currency just because of their higher rates of inflation in comparison with the more developed members’¦.The EMU project didn’ t, therefore, failed because of the narrow-mindedness of the member countries, but because of real economic constraints which prevent a supranationalisation of economic policy initiatives. The EMS cannot, therefore, be completed by the establishment of a European central bank with a sole Community currency, because it will be confronted permanently with the necessity of adjusting the exchange rates to the changes in competitiveness within the Community’.
“The contradiction of the EC process of economic integration is that, on the one hand, the structures of nation-states must preserved to realize the above-mentioned limited possibilities of integration at all, yet the maintenance of nation-states, on the other hand, does contain the danger of destroying the integration process by reactivated protectionism. At the risk of decline, the EC must learn to live with this insoluble contradiction’.
Fragmented economic policies of EU member-states will be a permanent source of crises and adventures for the Euro. If this continue, and the turn to nation-states prevails over federal and centrally coordinated policies, as happened in the case of the revised Lisbon strategy which turned towards the member-states to confront its failure, the weakest member-states will have to leave the Eurozone to readjust their losses of competitiveness.
The competence to determine basic directions of the member-states fiscal and economic policy should be transferred now to the European Commission. In the long run, the reactivation of a ‘˜Europe of the Regions’ type plan, in which member-states and NUTS 1 regions stand for constituting elements of a federal Europe, will enable establishing a European economic government with full competence over the economic, development, technology, and welfare policies.
Gottdiener, M. and Komninos, N. (1989) Capitalist Development and Crisis Theory: Accumulation, regulation and spatial restructuring, London: Macmillan and New York: St Martin’ s Press
Busch, K. (1989) “Nation-state and European integration: Structural problems in the process of economic integration within the European Community’, an excerpt, pp. 144-149: Nation-State and European Integration
Susana BorrÃ¡s-Alomar, Thomas Christiansen and AndrÃ©s RodrÃguez-Pose “Towards a `Europe of the Regions’? Visions and Reality from a Critical Perspective’: Towards Europe of the Regions