h/t Holman Jenkins in Why Europe Dithers
At most the endgame might be extended for a couple of years, but the native pessimists among us will have a hard time believing the single currency can survive. Those countries that consider themselves solvent and disciplined will face a relentlessly growing temptation to get out, led by Germany.
As you will recall, one argument for the euro was that, lacking their own currencies to debauch, countries would have to get a handle on welfare bloat and the disincentives they pile up on workers and entrepreneurs. But a funny thing happened on the way to a “United States of Europe.” Only one major country made an effort to reform itself, Germany—the one country whose political culture would never have allowed it to opt for D-mark debauchery in the first place.
We noted as much in a column in 2003, and wondered: “If Germany overhauls itself, will other European states follow suit? Or will their commitment to the euro and a single market wilt in the face of domestic opponents who paint reform as a surrender to the Germans?”
No, this is not a paean to the “unchangeability” of national culture. But some things change slowly and national culture is one of them. It was never likely the rest of Europe would choose to become more like Germany, or Germany choose to become more like rest of Europe, on a schedule that would allow the euro to work. And that’s what we’re finding out.