Europe: to separate or form a superstate?

What's the best course for Europe to take to emerge from its ongoing crisis?

The editors of The Economist magazine and Harvard financial history professor and Newsweek columnist Niall Ferguson tell us that a federal superstate is the only viable way out of a horrendous financial disaster in Europe.

An Economist lead editorial asked, "What will become of the European Union?" ("The Choice," May 26, 2012). It answered: "One road leads to the full break-up of the euro [the single currency of 17 of the 27 members of the European Union], with all of its economic and political repercussions. The other involves an unprecedented transfer of wealth across Europe's borders and, in return, a corresponding surrender of sovereignty. Separate or superstate: those seem to be the alternatives now."

Niall Ferguson put this dilemma much more emphatically in an interview with Ben Laurance in Britain's Sunday Times: "'It's too late to unravel the single currency,' he says. 'People talk about that as if that option existed, and it simply doesn't. It's an illusion to think you can just kick Greece out without unleashing a real nightmare of contagion through the banking systems of the peripheral [European] countries" ("One Nation (Under Germany)," May 20, 2012). Only the Germans have the financial wherewithal to save the euro and the "European Dream."

Ferguson continued: "The complete descent into disrepute of national political elites makes the case for federalism." Witness, as he pointed out a little earlier in a Newsweek article he wrote, France electing a champagne socialist as president on promises of taxing the rich up to 75 percent of their income and a lower national retirement age, as well as Greece electing a ragtag coalition of disparate splinter groups. Also Spanish fiscal policies have resulted in 50 percent of youth being unemployed ("Niall Ferguson: The European Farce," May 14, 2012).

As Ferguson went on to say, "The national politics of continental Europe is collapsing and that's paving the way towards a federal solution." He now believes that the presently plodding German political machine will finally act swiftly "when the chips are down" (ibid.)—despite the conclusion of his Newsweek article: "Here, then, is the twist in my tale of national character. For two generations, the Germans really did want to take over Europe—by force. But today, when they could do so peacefully, they can't be bothered." Of course, as we've seen at several stages, European events can be fast-developing.

The title of another article in The Economist pointed out that a federal Europe would inevitably result in "An Ever-Deeper Democratic Deficit" (May 26, 2012). Ultimately in practical terms, sovereignty will be shifted to a tough, bureaucratic central authority—in Brussels but most probably eventually in Berlin.