For most of the last 2,000 years, Europe was a set of shifting alliances and warring kingdoms. Now the Greek debt crisis is sending the continent back to its historically normal state.
Last weekend’s anger, backbiting, insults and betrayals as leaders debated whether Greece could stay in the euro currency zone fascinated the financial media, who thought it unusual enough to be newsworthy.
In fact, it wasn’t unusual at all.
Europe was always like this until quite recently. Only World War II’s devastation made Europeans seek peace and unity. The European Union and the common currency were supposed to bind the disparate nations into an inseparable transnational alliance.
With Germany and its friends ready to eject Greece from the continent, I think we can say the experiment went badly wrong.
Who is at fault? Everyone is. The dream of a united Europe was always unsustainable. The geographic, religious, economic and cultural differences that kept the continent fragmented for centuries didn’t disappear; they just went in hibernation. Now they are waking up.
By definition, no one can sustain an unsustainable system. If the alliance weren’t tearing itself apart over Greece, it would find some other reason.
The timing isn’t coincidence, either. All this is happening just as the children of World War II leave the stage. Today’s leaders didn’t see their parents die or their homelands go up in flames. They would behave quite differently if they had.
The “European Project” was a noble failure. The sooner Europeans admit this, the sooner they will find a better way.
I wrote seven months ago that 2015 would be the year the euro dies.
Now Greece has one foot out the door. Voluntarily or not, they will leave the currency union soon. Others will follow.
Nations will once again issue their own currencies and take control of their own economic fates.
The transition will be painful, but ultimately better for everyone. Competition doesn’t have to mean war. If the United States and Canada can share a border and trade peacefully while still owning their currencies, Germany and France can do the same.
Can they get from here to there without violence? We’ll see. American investors will probably have some great buying opportunities as Europe realigns, but for now the best strategy is to watch and wait.
We’ll see more world-changing weekends
before this is over.
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