As a federal system, the E.U. can be expected to contain a certain amount of economic disparity. The state bond yields in October 2011, for example, were—one could say—“diversified.” Investors relishing high risk-return could partake in Greek bonds while retired investors could safely stick to the German variety. A healthy federal system proffers something for nearly every taste, while constraining the outliers for the sake of unity. It does not require uniformity.
However, too much diversity can cause a federal system to come apart due to
divergent pressures seeking more expression. Also, if the high-risk “end” is
sufficiently risky, the ensuing atmosphere of uncertainty can undo the federation’s
financial system. Uncertainty, like anxiety, can subtly eat away at a system to
the point that it cannot pull itself out of its funk.
