Arthur Doohan: In chess, the quality that separates the 'grandmaster' from the 'talented amateur' is the number of moves ahead that each player can mentally keep in mind and manipulate. Something similar is said to be true for champion tennis and snooker players.
I am not one for conspiracy theories as experience has to date shown me far more evidence supporting the 'Murphy's Law' theory of management of human affairs.
None the less, there are in all realms, whether jurisdictional or professional, at any given time a handful of competent persons with both a breadth of vision and a depth of ability.
The 'European Project' was built by men widely adjudged to be 'political grandmasters'. Adenauer, de Gaulle, Brandt, Mitterand, Delors; none of these were, or are, regarded as vain or shortsighted or incompetent. Patiently and with great care and at considerable cost and in the face of much dissent, the various layers of the EU have been put together.
Yes, there have been many compromises and the 'project' is far from complete and the final form is not clear to anyone. But there was a vision behind the efforts of these men and there was, most certainly, a bitter awareness of what the possible costs of failure could be and what the outcome of failure would look like.
In the context of all that wisdom, ability and effort we now have to re-examine the crisis that envelopes the 'European Project'. The 'design flaws' in the single currency were clearly enunciated before its adoption. The bumpy evolution of the ERM gave ample warning of how tough life might be for some members of the monetary union.
The driving ambition of the proponents was not merely to enhance European trade or reduce the profits of foreign exchange traders. They did not seek some empty token of pseudo-unity for Europe.
What they wanted was a means of preventing a repetition of the abuse of power and the greedy expropriation of financial wealth that the US imposed on the rest of the world when it unilaterally and without warning or dialogue abandoned the Bretton Woods agreement in 1971.
The only way to achieve this would be to build a currency with the strength and depth of the 'mighty dollar'.
That level of integration has always been regarded as politically impossible to achieve and, in many ways, has been 'tabu' to both those who would propose it, as well as to its instinctive opponents.
Nobody 'walks the plank' out of choice. Standing at the end of the plank, one jumps into the water because certain death awaits at the other end and there is some hope, however slight, amongst the fish and the sharks.
The designers were well aware of the risks and the flaws of the design of the Euro. They had knowledge of, and personal experience of, financial disasters of national and supra-national scale and impact. A crisis of the type we are currently dealing with was inevitable with only its timing as a matter of debate. Almost certainly it has come sooner than most observers expected and has probably been brought on and exacerbated by the US debt crisis.
We are now hearing calls for the 'federalization' of problem debts from predictable, and from most unlikely, sources. Of course, no one mentions the corollary of this federalization which would have to be federal tax raising powers. At which point the EU project would be complete.
This is an alternative to the disintegration of the Euro and the EU as a solution to the unviability of the debt mountain that has been piled high in the storehouses of Europe. And as solutions go, while unpalatable to many, it looks less painful than the alternative.
So I leave you with this thought and a quote.
Did the designers of the Euro hope to achieve, through a crisis, a level of European integration that would never be possible by normal negotiations?
“And whether or not it is clear to you, no doubt the universe is unfolding as it should.”
- Desiderata by Max Ehrmann
Arthur Doohan @artied
Arthur Doohan trained as an engineer and economist in Trinity College Dublin and went to work in a bank. Having traded every asset class and derivative except equities in the City of London for 15 years he left to do something more constructive than 'being a professional gambler with other people's money'. He now works as an IT consultant specialising in mobile and ubiquitous computing.
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