Montesquieu Institute: from science to society

Playground of the euro crisis

Thursday, November 15 2012, 13:43

THE HAGUE (PDC) -  'The euro crisis is just like a playground'. Roel Janssen, financial and economic journalist, used this metaphor  in the second lecture of the series of lectures of the Montesquieu Institute. National political actors, the competitiveness of member states, the vicious circle of state debt and tottering banks and the capital flow in the European market have been clarified on basis of playground attributes.

Janssen compared the actions of political actors with a swing: the decisions and actions of politicians are dynamic and sometimes incoherent. European politics fluctuate up and down. The seesaw is a metaphor for the competitiveness of the member states; the wealthy countries oppose the less wealthy countries. Surplus countries support the less wealthy countries with finances. Furthermore, Janssen also compared the interdependence of the public debt and tottering national banks with a merry go round. In the euro crisis the national banks get weak, thus the weak banks weaken the governments and vice versa. Ultimately, Janssen noticed that the European market is like a swimming pool. A swimming pool which must remain full of water for the 'swimmers' - the members of the euro zone- to keep swimming. After all, nobody benefits of a draining pool.

Janssen has also spoken about possible solutions to strengthen the euro zone. However, there is no solution for the diversity in national politics, whilst it is one of the characteristics of the European Union. In order to strengthen the competitiveness of ailing euro zone-members, it is necessary that they adhere to the budgetary commitments made in the Maastricht Treaty. Moreover, the vicious circle of public debt and tottering banks must be diminished and in order to support the European market, the European Central Bank should act as a 'lender of last resort' which provides bail-out funding to  keep the market alive. In addition, Janssen said the current crisis is both an economic and social crisis, due to the reactions of the EU-citizens. He also called the Economic and Monetary Union (EMU) an 'Hotel California': once signed for membership and accession, there is no way out.

During the lecture Janssen has created insight to the hard political choices which depend on the crisis. There has been a fruitful discussion with the audience about the operating of the EU-institutions in the economic misery.