During the summer of 2012, it was all
too easy, especially for financial analysts (whose expertise is on finance
rather than politics), to summarily conclude that the E.U. was not capable of
keeping the states of Greece and Spain from default. Perhaps the human brain
has an innate proclivity to think in bipolar terms in the sense that something
(or someone) is presumed either “good” or “bad.” Empirically, social
organization, which includes politics and finance, is typically more gray than
“black and white.” This is undoubtedly the case concerning the political risk
analysis that goes into assessments of systemic risk, especially where
uncertainty is salient. In general terms, I would say that as of 2012 the
anticipated demise of the euro (and even the E.U.) was much exaggerated.
Somehow or other, European policy-makers were able to hold the federal
ship-of-state together in spite of its vulnerabilities.
The full essay is at Essays on the E.U. Political Economy, available at Amazon.
