Greecing the Wheels

EU US Flags on Wheels

In 1793, Japan was ruled by a Shogun, China by an emperor and a Sultan still controlled vast portions of the Middle East and the Balkan Peninsula. France was in the middle of a Republican revolution, which in itself would end with an emperor crowning himself and a war that would consume all of Europe. What was left of the habitable world was carved up amongst the European powers into colonies. America and France were the only two countries in the entire world attempting a new form of government where men with property were responsible for ruling the country. Few thought the great American experiment would work.

In that same year of 1793, construction began on the United States Capitol Building. In this seat to Congress, democracy as the world now knows it would be built. At the time, most European powers were sure this chaotic union of states in North America would crumble and all jockeyed for position to get the biggest crumbs when that day occurred.

Even though they had lost the Revolutionary War, Britain still owned a gigantic colony to the north of America (British North America, aka Canada) where they thought they could wait it out and retake what was once theirs. It wouldn’t be until the War of 1812 that Britain would give up on its American dreams for good.

In America itself, the future of the union was uncertain. Citizens and politicians both wondered what their new political landscape meant. Was it one country or an alliance of thirteen small countries? A common language unified them but that was about it. In fact, the political and geographical landscape of those thirteen colonies mimics many of the European differences in the EU today. Banking and business were important in the north while agriculture was the main source of wealth in the south. More and more immigrants were coming every day with different cultures and religions than the established colonists, and each state argued over water rights, trade, taxes and their own responsibilities in this new unification.

This union was so tenuous that in 1786 a rebellion within the country was led not by a rival European power but by a man who had battled for the independence of America from Britain during the Revolution. Daniel Shays started fighting for the Patriot cause as a Sergeant and by the end of the war had been promoted to the rank of Captain. After the war, Shays returned to farming in Massachusetts but taxes, lack of compensation for military services and the demands of eastern bankers and businesses threatened to land Shays and thousands of others in debtors’ prison.

Shays organized an armed rebellion amongst his fellow veterans and countrymen and marched throughout Massachusetts shutting down courthouses and engaging federal troops. Eventually the revolt was suppressed and when it was over, 4000 people signed confessions to their active participation in the uprising. Shays himself was eventually pardoned and later died in poverty and obscurity in Upstate New York.

In January 1790, the first United States Secretary of the Treasury, Alexander Hamilton came up with a two-prong assault to battle the troubled economy. The first was that the federal government agreed to assume all of the states’ debt from the Revolutionary War and pay off all foreign and domestic national debts. The second was to create a Bank of the United States that was underwritten by both public and private stockholders. This federal banking system created stability domestically and confidence internationally in the American banking system.

In other words, America was a mess when it started and far from being a sure bet that its union of thirteen disparate colonies would eventually become a world superpower in the generations to come. So when I hear people talk about the troubles with Greece and the fiscal problems facing the European Union in general, I take all the talk of dissolution of the EU with a grain of salt. While it is true that there are more dissimilarities with the EU in 2015 than there are similarities with the United States of America in 1790, the argument for the continuance of the European Union is stronger than the reality of a breakup.

Let’s start with how far Europe has come with regards to simply not trying to kill one another. Yes, the greatest period of peace in European history so far was from about 1814 to 1914, but during that century the groundwork was being laid for eventual hostilities. Growing nationalization, militarization, alliances and competition for colonies were not bringing Europe closer despite the peace. Consequentially, one could argue that this peace was just a smokescreen so that all the European powers could build up their armies and alliances until each thought they were strong enough to conquer the other.

Since the end of World War II, Europe has decided that the best way to deal with problems within Europe is not with an army but with a union. The fact that the EU exists at all and that warfare hasn’t broke out in Europe in the past seventy years is a major success. The difficulties that Europe is facing now would have been solved with armies instead of loans and budgets one hundred years ago.

The basis for all of this doom and gloom for the EU is based on the present economic failures of Europe. The EU was created to improve trade and European economies and that just is not happening for everybody. Greece lied about its economic health when it applied for EU membership and EU regulators turned a blind eye to what they knew were false numbers. It wasn’t just Greece but other European countries as well that treated access to easy credit the same way a drunken college student reacts with their first credit card.

Now we are dealing with the fallout with the great debate being between austerity programs versus government spending and Germany chastising Greece for not being more responsible and Greeks demanding that Germans be more reasonable. But it’s not only Greece questioning the trustworthiness of Chancellor Angela Merkel and her administration as Captain of the EU’s sinking ship. Thomas Piketty commented on the hypocrisy of it all telling Die Zeit that “the Germans are only in the strong economic position they are today because they benefited from the forgiveness of their neighbors after World War II.”

Even Steven Erlanger wrote recently in The New York Times: “Germany displayed its national interest more nakedly than in the past and made it clear there are limits to its willingness to put European unity first.”

I foresee that in the years to come, the southern economies will learn to be more responsible while the northern economies will become more laid back. In other words, countries like Germany are going to become a little more Greek and countries like Greece are going to become a little more German. To both those countries, that may seem blasphemous and impossible but, seventy years ago could anybody have imagined that the only Germans stationed in France today would be overweight tourists in Speedos?

We Americans love to chastise European economies for their high taxes, state pensions and enforced lunch hours. We expect Europe to be more like us and express frustration when it doesn’t work like “home” because many Americans are just a couple of generations removed from Europe. However, just because Europe functions differently doesn’t mean the EU is going to break apart. Every marriage has its fair share of bumps in the beginning, but the EU, just like the original thirteen colonies, is in it for the long haul.

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