Every time FLG begins to reconsider his stance on Felix Salmon, namely that he's a narrow-minded buffoon who can state the small and obvious but misanalyzes everything of any scale or scope, Felix redeems FLG. For example, he writes:FLG has said it many times before -- the euro is more of a political statement and tool than an economic one. It was about integration. About creating something European that was both tangible and ubiquitous with the hopes the idea of Europe would become commonplace, no big deal, quotidian.
Of the many ways in which the euro project was fundamentally misguided, this might be the proximate cause of its demise: it was never robust to the messy world of political reality. And in the real world, people — including heads of state — make stupid decisions all the time.
The euro wasn't robust enough to deal with the messy world of European political reality because it was born of it. Let's not forget that messy world of European political reality is why Greece was allowed to lie its way into the eurozone.
In fairness, Felix half gets this:
The architects of the eurozone displayed classic hubris: they saw the increasing economic ties between the various countries and locked themselves in to a momentum trade where such ties could only ever strengthen and never weaken.
But that's not really the issue. It's not really a question of economic ties per se. The issue is that nobody except the some powerful elites in Europe wants a unified European Suprastate. They though the path of least resistance was to hope that increasing economic ties would tear down the national, cultural, and linguistic barriers.
But this is where Felix really doesn't get it:
But at this point I see no sign of the pan-European unity at the head-of-state level which is needed to preserve the eurozone project over the medium term. Commeth the hour, commeth the backbiting and finger-pointing and recriminating. Greece is going to default and leave the euro; the only question is when. And when it does, the EU will find that its protections against contagion are about as effective as that $1.6 billion tsunami breakwater in Kamaishi.
Greece can fall and the eurozone can still survive. But Italy — which is just as politically dysfunctional as Greece — can’t. Which is why those Olympian forces will ultimately spell the end not only of Greece’s membership in the euro, but also of European monetary union more generally.
Again, Felix is sorta getting it, but the problem isn't Italy. If Greece falls, the entire European project fails.
Managing the economics was supposed to be the relatively easy part of the integration. Sure, it's complicated and all, but...well..let me put it this way. If these guys can't manage economics during ten years of relative peace and then can't manage the monetary crisis, then would you trust them with the management of a national security emergency that required coordination?
In some ways, FLG would argue, using his patented Government Is Like The Marines Theory that national security, in particular fighting a war, is easier for a governments to do than manage a currency zone, but that's not how it will be seen. If we can't trust these bozos to manage a single currency and save a small country on the fringe economically, then how can we rely upon them to come to the rescue militarily? The answer for most people, FLG figures, is you can't. And since security is the primary and fundamental role of the state, then you can't trust this proposed supranational body to help its members with the fundamental and primary role of the state. Therefore, if Greece fails, then the euro, EU, and European project are done whether or not Italy falls next.