The Politics of EMU Survival

EMU has been through a lot in 2010. As we start 2011, it is worth considering the following points on how Europe has responded:

EMU may lack an accompanying political union that various political architects called for when the currency union was established, but it was political solidarity that kept the single currency together in the darkest hours of 2010.

2010 showed us that political solidarity does not have to rest on a common sense of identity and purpose, at least in the sense that everyone has to like it. The acrimony, bellyaching and arm-twisting that accompanied Europe's collective action in 2010 belie that. Some will support a specific form of cooperation because they believe it is right. Others will do so because they believe it is necessary, even if it is far from their ideal preferences. Indeed, it seems that all European governments felt the hot breath of necessity on the back of their necks last year, compelling them to do things they really didn't want to.

Under conditions like that, nearly anything could happen. EMU may very well survive the year, but not as it once was.