Nosemonkey's EUtopia

In search of a European identity

The credit crunch and the EU

It’s fairly apparent that even the experts haven’t had the first clue what they were doing over the last few years (“yeah, let’s lend money to someone who’s got no hope of paying us back – that’s a good idea!”), and the last few weeks have only gone to show that all predictions of where this is all going have so far been wrong. As such, my opinion about where the current financial situation is heading is probably just as valid as the CEO of some FTSE-listed financial institution or some economic genius sitting in a plush office in Wall Street or Whitehall.

The thing is, though, that unlike these finance types who have to bluff through, I know when I don’t know what I’m talking about. I’m not arrogant enough to think that my musings on the current economic outlook are likely to impact on the markets (unlike those of similarly ill-informed journalists in the mainstream press whose guesswork scribblings can have severe real-world consequences), but still. If you can’t say anything sensible, it’s best not to say anything at all.

Nonetheless, with Germany following Ireland in (apparently) guaranteeing all bank savings, creating in turn the potential for a vast influx of deposits to German banks by Europeans desperate to protect their savings (who are well aware that the German government’s more likely to be able to keep the promise than the Irish), and with various EU member states getting a little bit miffed with both Germany and Ireland because of this, one prediction can be made: by the time the economy recovers, there will be ever more pressure for serious EU reform.

This whole episode is already going to prove that a single currency simply isn’t enough, that the levels of integration that the EU has so far achieved are simply not enough, that when it comes to the (credit) crunch, we all still look out for number one first, and sod the rest of the continent. Some may even take it as a sign that the old hope that the EU can provide prosperity and insulate from hardship was a false one. It’s all far too early to say.

In a comment left today on an old post Peter makes similar points which are worth a look, also pointing to this halfway decent article from today’s Guardian, providing a useful continent-wide overview and going on to suggest similar possible outcomes.

The only thing that is certain is that no one knows where this is heading. Until we do, I’m going to try and refrain from adding to the reams of inaccurate guesswork. Hence the quietness here of late. Perhaps it’s time for a bit more history and culture again?

Update: More thoughts along the same lines from the BBC.

One Comment