Wednesday, January 23, 2013

Shahin Vallee Reviews the Euro Crisis

Vallee's account of the crisis as a consequence of flaws in the Maastricht architecture designed by Jacques Delors is a useful overview for observers of the euro crisis. Although he adds nothing new to numerous similar retrospectives, his statement of the case is brisk and concise. The same cannot be said, unfortunately, of his embryonic recommendations for overcoming the problems of the euro. Here his recipes are not concise but vague and at times hyperbolic. What is one to make of a statement like this, for instance:

For the Economic and Monetary Union today, one could consider the recent mutual insurance tools and the associated mutualisation as forming the basis of a proto-budget. Formalising this would require integrating the sum of ad hoc mutualisation instruments into a new compact that would lay the foundation of Europe’s fiscal federalism.
This is tantamount to suggesting that something like the Constitution of the United States might have evolved from the rules and regulations of the Federal Deposit Insurance Corporation. Not only is the mechanism of such an evolution unspecified, but the very idea of it seems to conclude, in true technocratic fashion, that the problem of a constitution is technical rather than political. There is a category error here, not just a lack of specificity.

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