I liked this comparison of the current EU problems to the Soviet collapse:
The Soviet collapse teaches us that just because the economic costs of disintegration would be very high, this is not a reason for it not to happen. To believe that the EU cannot disintegrate simply because it would be too costly offers only weak reassurance that the Union will continue to be stable.
Paradoxically, the belief that the Union cannot disintegrate, backed by the economists and shared by Europe's political class, is one of the risks of disintegration. The last years of the Soviet Union are a classical manifestation of this dynamic. The perception that disintegration is 'unthinkable' could encourage policy makers to try to push dangerous policies under the assumption that 'nothing really bad can happen' in the long term, and foster the idea that anti-EU policies or rhetoric might even be helpful in the short term.
The Soviet collapse is the most powerful demonstration that the disintegration of the EU need not be the result of a victory of anti-EU forces over pro-EU forces. More likely, it will be the unintended consequence of the growing dysfunction of the system and the elites' misreading of the political dynamics in their own societies. Reflecting on the Soviet collapse, the eminent historian Stephen Kotkin is convinced that the real question to be asked is, "why the Soviet elite destroyed its own system?" The Soviet collapse is the best demonstration that the rise of anti-integration forces can be the outcome, rather than the cause of collapse.
Also this:
So will Europe have its Hamiltonian moment? Probably not. America in Hamilton's time was a young, post-revolutionary republic. Its founding fathers had the prestige to refashion the nation to confront military and economic threats. Hamilton's assumption of state debt was contentious: virtuous states did not think they should pay for lax ones. Yet for Hamilton, assuming the debt was a necessary price of liberty. Europe, by contrast, is an older and more diverse place, with each country boasting of a national identity often forged from conflict with others. There is no European demos.
America resolved the question of national identity first, by fighting a war of independence and creating a political union. From there it was easier to create a fiscal union. But Europe is doing things backwards. It created the euro partly in the hope of fostering political union. Fiscal integration is being pushed not to preserve freedom and a new nation, but to save a failing currency and a political project supported mainly by the elite.
In any case, the embers of Europeanism are dying. The memory of the second world war is fading, and the old Soviet foe has collapsed. And who, among today's mediocrities could pretend to be a new Hamilton? The crisis has confirmed countries in their prejudices. Germans see Greeks as indolent and corrupt; do they really want to commit the German chequebook to Greece fully and indefinitely? And having portrayed Angela Merkel and Wolfgang Schauble as the embodiment of the old Nazi invader, are Greeks ready to be forever bound to German strictures?
If the eurozone cannot, or will not commit to deeper integration, then it would be wise to consider how disintegration might take place, and how best to manage it. Would it be better for strong states like Germany to leave? Or would it be best to cut off the weakest members? This is an uncomfortable discussion. Merely being heard to talk about such things may exacerbate the crisis.
As is apparent from the submissions to the Wolfson prize in Britain, to be conferred on the authors of the best plan for monetary divorce, a break-up would be acutely painful for all. That helps explain why, for all the disenchantment, leaders are straining to keep the euro going. Nicolas Sarkozy may have been ready to wreck the Schengen free-travel zone in his call for the restoration of national borders, but he knew better than to talk of a restoration of national currencies. But someone, somewhere needs to be thinking about an orderly break-up, because the most agonising way to go would be a chaotic collapse that would wreck the other benefits of European integration, such as the single market.
The most hopeful scenario for the eurozone is that it faces a long and unnecessarily painful road to recovery, with the adjustment placed almost entirely on deficit countries. But the euro could just as well face a long and painful death.
