The euro is an astonishing achievement.
Not, obviously, because it’s been a tremendous economic success: unable to devalue, the economies of much of southern Europe are being gutted, facing gravity-defying rates of unemployment (20 percentage points higher in Greece than in Germany), painful efforts to cut wages to restore competitiveness, and essentially unsolvable debt crises.
The triumph of the Eurozone is that it limps on despite all this, patched up by the ECB and by essay crisis-style meetings of European leaders that never fix anything, but do just enough to prevent a slow-burning crisis from becoming a full-blown catastrophe.
To the surprise of British and US economists, who from the start judged the single currency to be a fool’s errand, sheer faith in the value of the European project has kept it alive despite the pain.
And those sanguine about a defeat for Prime Minister Renzi in the Italian referendum this Sunday no doubt expect that, if it does reignite questions about the sustainability of the Eurozone, European elites will draw on reserves of this communautaire spirit to quash market vigilantes once again.
They are probably right – at least in the short term. But anaemic rates of economic growth cannot continue forever before they poison the politics of the region.
Italy has already suffered two decades of stagnation and a third is quite possible. The nation’s political leaders will not accept the euro straitjacket indefinitely as, all the while, Italians drift towards anti-establishment parties with no regard for the European dream. The same can be said in country after country.
In the meantime, European elites look set to muddle through as the rage of voters grows louder. They will double down on their ideals while practical measures to make the Eurozone sound – like fiscal transfers and a common euro-area budget – elude them.
Eurosceptics may cheer the slow demise of the Eurozone, but there is a sting in the tail for Britain. Just as an emotional faith that their project is just has motivated European leaders to keep the show on the road these past few miserable years, it is becoming ever clearer that it will also be used as justification for punishing Britain for Brexit. It’s going to be tough.