The Long-term Implications of the Euro Crisis for European Integration: A Deeper Union or Fragmentation?

Abstract

Analysing the longer-term future of the Eurozone (and of the European Union) today is certainly not an easy exercise. Given the crisis, this is likely to result in a much less optimistic outcome when compared to similar exercises in the past, such as the 50 years exercise carried out by Maurice Fraser in 2007. Indeed, a sober look at the current situation could easily give rise to pessimism: Europe is still immerged in its worst crisis since the end of the war, with some countries in a seemingly never-ending spiral of recession and indebtedness which is eroding their social structure. Europe faces a number of significant long-run challenges, including ageing populations. Moreover, looking at the political institutions, there is a decrease in reciprocal trust among member states and a persistent lack of authority and capacity of the central institutions to cope with current challenges. Dangerous waves of nationalism and populism are on the rise once again. All these aspects interact, producing a complex and fundamental challenge to Europe’s economic and social system, requiring a comprehensive solution.