Definition: Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously.
Jean-Claude Juncker, prime minister of Luxembourg, put it best in 2007: “We all know what to do, but we don’t know how to get re-elected once we have done it.”
As The economist puts it: “Will the European Union make it? The question would have sounded outlandish not long ago. Now even the project’s greatest cheerleaders talk of a continent facing a “Bermuda triangle” of debt, demographic decline and lower growth.”
A rival perception (between Germany and France) suggests that they are more like a couple on the verge of divorce: they agree on little, and trust each other even less. Consider the row over economic government. The French want to concoct a euro-zone block, with a direct line to the European Central Bank and fiscal harmonisation. The Germans reject this. They insist on a wider grouping, backed by strict budgetary discipline, and harsh sanctions for bad behaviour. The Economist
With unemployment the worst of the post-World War II era, there has never been a better pretext for reform they argue in Europe.
In Asia and America it has become fashionable to look upon these failings with disdain. Europe’s time is past, it is said. Its ageing, inward-looking citizens no longer have the resolve to overcome adversity. The Economist
I was very much amused with the readers’ comments in the end of The Economist article. One for instance: “If nations were individuals, Europe would be that senior citizen. I personally think they have gotten too lazy and the socialized services have added to the problem.” and another “Politically, Europeans look like the post-WWI isolationists who think they are too innocent to leave their lovely home and do anything for the ugly outside world.” They go further and argue that one the most important functions the EU plays is ensuring that Europe stays democratic. What they have on mind, among other issues, is that except for Britain, France and a few Scandinvian countries, most European countries have only a few decades of experience with democratic governance. The memory of dictatorships are fresh. “who knows what will happen if there is a serious depression in these countries, will their new democracies be able to stand a trial of fire?” – the readers ask. And yes, will the EU be capable to get rid of its cognitive dissonance and take a united lead? well, I am not that EUphile, so you can understand my not really optimsitic attitudes, however The Economist says:
Yes: the European Union will thrive if its leaders seize the moment in the same way they did 20 years ago.
Last but not least, there is another point I would like to make concerning EU’s confusion. Far from shifting Ukraine further towards Russia, the election of Viktor Yanukovych could provide the EU with the opportunity to reengage with the keystone to Europe’s Eastern neighbourhood, according to a new policy paper by European Council on Foreign Relations Ukraine expert Andrew Wilson. and an interesting quotation:
When the EU encourages states like Belarus and Amenia to reform, it is in effect asking them to be ‘more like Ukraine’. If that request makes leaders in Minsk or Yerevan recoil or laugh out loud, then Ukraine really will have failed – and Europe with it.
True Dr. Andrew Wilson, true…
source: The Economist
The euro-zone rescue package does not mean common economic government. But the rules are clearly changing..
SINCE 1949, Article 5 of the North Atlantic Treaty has bound NATO members to a solemn vow: an armed attack on one of the alliance shall be treated as an attack against all. With international markets closed to Greece, and contagion threatening Portugal and Spain, European Union leaders agreed to a similar pledge after a pair of gruelling, late-night meetings on May 7th and 9th.
From now on, they in effect declared, markets betting against one member of the euro zone would meet a swift response from all 16. Emergency finance would be channelled to vulnerable governments from an array of fighting funds of up to €750 billion ($950 billion) variously loaned or guaranteed by EU countries, euro-zone members and the IMF (see article).
The European Union’s policymakers were forced to act with unaccustomed speed and unprecedented force. A promised huge rescue fund and central-bank help for indebted governments have eased the euro area’s crisis. The respite must be used wisely.. (see article)
Electoral defeat at home and the euro-zone rescue package have rocked Angela Merkel’s chancellorship. She now faces some tough decisions..
MAY 9th is not a day Angela Merkel will soon forget. First voters in North Rhine-Westphalia (NRW), Germany’s most populous state, booted the chancellor’s allies out of office, meting out her worst political drubbing in more than five years in office. That evening European finance ministers meeting in Brussels armed a financial bomb to deter speculators threatening the stability of the euro (see article). It seemed to work, but may also demolish Germans’ long-term trust in the single currency. Both events will transform Mrs Merkel’s chancellorship. (see article)
Some interesting charts and photos related to the topic:
The Greek debt crisis is spreading. Europe needs a bolder, broader solution—and quickly, says The Economist. Read full coverage of Greek crisis HERE. What I wanted to share even more was the following photo that speaks for itself. I just love The Economist’s creativity:
On Friday, Greece admitted it could no longer pay down its massive debts. Athens is seeking the emergency loans before it must make additional payments on its debt next month.
The cost of insuring Greek government debt against default recently surpassed Ukraine to become the most expensive in Europe. On Monday, the spread hit another unwelcome milestone by widening at one point beyond 700 basis points (meaning it would cost $700,000 a year for five years to insure $10 million of government debt against default), making Greece more risky than Pakistan, noted Timothy Ash of Royal Bank of Scotland, in a research note. While that may seem extreme, Pakistan does have some advantages, Ash said in a tongue-in-cheek note to clients, including a debt-to-GDP ratio of 55%, roughly half that of Greece, and a 2009 budget defict of 4% of GDP, less than a third of Greece’s level. Pakistan managed to grow by around 3% in 2009, while Greece’s economy shrank by around 2% and shows little prospect for growth any time soon.
Picture: German magazine Focus showed the famous armless classical statue, now at the Louvre, raising her middle finger under the headline “Cheats in the euro family” – suggesting that Greece had deliberately misled EU peers to cheat its way into the eurozone.