Moment of crisis for the EU

Because several of the European Economic Union’s members are at the precipice of crisis, especially Greece, the EU finds itself in unchartered territory.  This territory is likely to shake the EU to its very core and might even lead to the dissolution of the Union.

Since World War Two Germany has remained the economic engine for Europe, yet because of its instigator role in the War, it was explicitly denied both a military or much say in international affairs.  Not only that, but the fruits of the German economy have also been used by the rest of Europe to fund all manner of projects and boondoggles.  However, that began to change in 2003 when Germany was finally reunified.  And finally there is an issue of substance that only the Germans really have the power to fix.  The economies of Greece, Italy, Portugal and Spain (the GIPS, or rearrange the letters and you have the PIGS) are all in budgetary crisis at a moment when no nation in the EU has the ability to bail them out, except for Germany.

As proposed right now the bailout of these four nations is estimated to cost $1 trillion large.  Ouch!  If Germany punts and decides against aiding Greece, and the rest of the GIPS, then the EU’s most powerful nation would have skipped out on the very purpose of the EU.  It would be if the US decided to abandon the United Nations.  How relevant would the UN be without the US?  Not very.  But if Germany rises to the occassion and decides to bailout the GIPS nations then Germany will never again acquiesce to the EU and will overnight become its most powerful member.  This course of action will make the EU, with an emboldened Germany, about as cohesive and potent as the UN is with the U.S. as the global hegemon.  That is, not very cohesive and not very potent.

We live in interesting times, Folks (Volks, if you live in a Germany-dominated EU)!

Jason