Europe's crisis: the people will be heard
Germany, the ever-more-dominant power within the EU, has rejected further economic integration, as Krugman's own article notes. Whatever Chancellor Angela Merkel may personally want, German voters are furious at the costs already imposed on them to shore up weaker EU countries, and will tolerate no more of the same. (The Greek bail-out was followed by a crushing defeat for Merkel's party in an election in Germany's biggest state.) A large majority of Germans now wish the euro had never been adopted in place of the mark.
European unification was always something of a secret conspiracy by the elites, as this article in the pro-EU Der Spiegel bluntly acknowledges:
[Jean] Monnet, who is considered a "father of Europe," wanted to guide European countries into a super-state "without their people understanding what is happening. This can be accomplished by successive steps, each disguised as having an economic purpose." Apparently the fathers of the euro acted in accordance with the same philosophy later on. The new currency became a vehicle for further integration, and the EU became a monetary union -- but not an economic, let alone a political, union.
It won't work any more. Europeans now do understand what is happening. Not only do Germans reject further integration, but from Greece to Spain to Ireland, there have been mass protests -- sometimes fearfully violent -- against the madness of austerity programs imposed by EU central authorities on countries already mired in high unemployment. It's increasingly clear that the euro is part of the problem; Britain, the one large EU country which did not adopt it, retains a flexibility and autonomy in dealing with its problems which the euro-zone countries can only envy.
But the pundits are right about one thing -- a common currency among a collection of independent countries with such disparate economies is unsustainable. Either the euro-zone countries will be forced into a political and economic union which their peoples do not want, or the euro currency will fall. I'm betting on the latter. The once-quiescent masses are angry and aroused. This is not the Europe of Monnet's time any more.