The Euro crisis has thrown into sharp relief the dangers inherent in pooling sovereign authority with other nations for economic advantage. Imagine the loss of control over our own destiny had the United States taken the NAFTA treaty all the way to formally combining our financial future with that of Mexico and Canada by merging the U.S. and Canadian dollars and the Mexican peso into, say, the 'Northa'.
Today’s Eurozone is roiling with the problems and challenges of cross-border economics, and one major player – the United Kingdom – has refused participation, thus throwing the entire process into disarray. And that’s a good thing for England, writes Niall Ferguson in The Daily Beast:
"..what they have just agreed to do is to create a federal fiscal union. Moreover, it is a fundamentally flawed one. The only surprising thing is that so few other non-euro countries—Sweden, maybe the Czechs and Hungarians—have joined Britain in expressing reservations. I quite see why countries with the euro are prepared to give up their fiscal independence to avert a currency collapse. But what on earth is in this for the others?”
It’s not, according to Ferguson, that Great Britain is opposed to European unity, but that it can’t imagine itself ceding its own self-governance to an artificially created quasi-government body.
The danger inherent in solving a fiscal crisis with such a massive shift in governance is that the solution is more risky than the original problem. In the Eurozone, the stronger players such as Germany and France have to pick up the pieces of the weaker nations like Greece and Italy. The drag on the economic engines of the strong countries is tremendous. Besides, Ezra Klein notes in the WaPo, it may not work:
“The debt burden in many of the weak European countries is a function of the financial crisis and the expectation of continuing slow growth. If growth picks up, then perhaps the euro zone could abide by these rules. If it doesn't, there's no way this kind of austerity is sustainable. And this deal says nothing about growth.”
Should the U.S. ever be tempted to combine forces in a formal way with its North American neighbors, it should look carefully at the assortment of struggles Europe continues to undergo in its attempt to establish a single European financial entity. Besides, the U.S. has already proven it can combine 50 states of varying strengths and weaknesses without threatening the integrity of the nation as a whole. The greatest threat in Europe is that a single weak state could take down the entire EU and its single currency.
Nobody is talking about the U.S., Mexico and Canada forming an Amerizone with a single currency and a set of rules that supersede national sovereignty, but there is discussion about applying the EU model to parts of Latin America and Asia. 'One-world' conspiracists must be having a field day with these concepts.
How anyone could look at the problems that the Euro has caused and see a template for other nations is simply hard to fathom.