European unity

Two groups have been enjoying the eurozone debt crisis: investors with short positions in peripheral country debt, and observers with a eurosceptic disposition. The former have already profited; the latter are still waiting for vindication. They will not receive it in 2011 – and probably not ever.

The sceptics have some good arguments. It is impossible (they say) to have one currency for a collection of almost autonomous fiscal authorities. Evidence: the failure of the Stability and Growth Pact, which was supposed to limit that autonomy by limiting deficits. Also, the eurozone economies are too divided by language and custom. Besides, the European project relies too much on fading memories of the Second World War.

Then there is history. Many grand international projects started in hope and ended in failure: the Latin Monetary Union (though that hard-metal-based currency set-up lasted a half-century), or the Kellogg-Briand Pact, which renounced “war as an instrument of national policy” – in 1928.

All this is persuasive, but the doubters underestimate the freedom of European leaders to make sacrifices for the sake of the common good. As for history, consider the remarkable progress towards unity since the formation of the European Coal and Steel Community in 1951. And the euro is so prized that countries have done hard things to join (most recently Estonia) and to stay in, even now, when quitting is no longer unthinkable.

Eurosceptics should remember that many observers in the late 18th and early 19th centuries thought the new United States was doomed. It took two constitutions and a gruesome civil war for the country to reach full unity, but now even the greatest sceptics about the US role in the world do not expect it to split up. The eurozone may have to shrink for a while, but Europe – and the single currency – are not destined to fail.

E-mail the Lex team in confidence