Europe on the Brink
The collapse of the eurozone would likely have a very negative affect on our economy, but would devastate Europe. The euro’s survival depends on large part on Germany, the EU’s largest economy. While founding members like Germany and France are quick to blame rapid expansion of the EU into developing countries of the former Eastern Bloc, but Polish Foreign Minister Radoslav Sikorski gave a speech to the German Society for Foreign Affairs in Berlin, basically imploring – and demanding – that Germany get off its ass and save the eurozone.
Excerpts of Sikorski’s blockbuster speech are summarized in this Financial Times op-ed (registration required).
To the always-Euroskeptic United Kingdom, Sikorski had this to say:
A critical issue is whether Britain, such an important member of the EU, can support reform. The eurozone’s collapse would hugely harm Britain’s economy. The UK’s total sovereign, corporate and household debt exceeds 400 per cent of gross domestic product. Can London be sure markets will always favour it? We would prefer Britain in, but if it can’t join, please allow us to forge ahead. And please start explaining to the British public that European decisions are not Brussels’ diktats but results of agreements in which you freely participate.
The two euro zone economies with the largest growth over the past four years have been Poland and Slovakia – relative EU newbies who are often blamed by the founding economies for being the root of all eco-social evil.
The EU has always been a sort of quasi-government – not even rising to the level of a confederation, its union has always been more about economics than politics. Sikorski believes it’s time to strengthen the EU into a “fiscal federation”.
What, as Poland’s foreign minister, do I regard as the biggest threat to the security and prosperity of Poland in the last week of November 2011? It is not terrorism, and it is certainly not German tanks. It is not even Russian missiles, which President Dmitry Medvedev has just threatened to deploy on the EU’s border. The biggest threat to the security of Poland would be the collapse of the eurozone.
I demand of Germany that, for its own sake and for ours, it help the eurozone survive and prosper. Nobody else can do it. I will probably be the first Polish foreign minister in history to say this, but here it is: I fear German power less than I am beginning to fear its inactivity. You have become Europe’s indispensable nation. You may not fail to lead: not dominate, but to lead in reform.
It’s created quite a stir throughout EU, which boasts 500 million residents and represents 20% of global GDP.