They want to set off a snowball effect, where further countries leave the EU. This is why Steve Bannon wants to set up an office in Brussels. This why the European Parliament elections next year are so scary, with right-wing parties on the move all over Europe. Visegrad, Nordics, France-Germany-Benelux, for example.
And that the external borders of these will be the lines on which the EU breaks apart into its constituent blocs. Friederich is completely right in his comment. The sheer determination to pursue this aim is clearly evident: there is no room for compromise for the EU.
Search for:. Roch Dunin-Wasowicz July 26th, What happens if the European Union falls apart 3 comments 1 shares Estimated reading time: 5 minutes. Share this: Click to share on WhatsApp Opens in new window. About the author Roch Dunin-Wasowicz. Posted In: European politics Featured. This seems a rather optimistic take on the current state of the European Union.
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Not every member of the EU is also a member of Schengen, and not every participant in Schengen is part of the EU , but a collapse of the euro would nonetheless affect countries inside and outside of the region. Economically, it is possible to have competing currencies in the same economic zone. There is nothing preventing Germans or Italians from trading in both German Deutsche marks and Italian lira, for example.
That scenario only seems unlikely because an end to the euro would increase pressure to dissolve the entire EU experiment. If Schengen were to fall, countries inside the eurozone would need to implement border controls, checkpoints, and other internal regulations previously eliminated in the Schengen Agreement.
The costs of this would spill over into private businesses, particularly those relying on continental transportation or tourism. To the extent that import quotas or tariffs are implemented by various member nations, and to the extent that those measures are reciprocated elsewhere, there would be a corresponding decline in international trade and economic growth.
A collapse of the euro would affect more countries than those in Europe, although in uncertain ways. Other regions, particularly major trading partners in North America and Asia, would face financial and possibly political consequences.
Many of the supposed economic benefits inside the EU do not transfer to external trading partners. The freedoms of labor and capital do not extend to the United States or China, for example, unless foreign consumers and producers gain access to a member country. As a result, it can be difficult to predict the potential fallout since it is possible that even stronger pro-growth policies could replace the bureaucratic super-state seated in Brussels.
On the other hand, increased economic isolationism from nationalist movements could threaten international businesses and financial markets. In the short term, markets would likely react negatively to added uncertainty.
The EU is a known commodity, even if imperfect, and markets like predictability. However, in the longer term, the markets could benefit from a once-again growing Europe. If a post-euro world returns continental Europe to competitive economic growth, it is very likely that the global economy will benefit. Redenomination would entail two broad changes. This means adjusting present wages, prices, and other values to the new money on an approximately proportionate basis. Second, the international value of the currency would need to be priced into the foreign exchange forex markets.
This is based on many factors, including the productive capacity of each national government and the relative risk of a devalued currency. It is likely that many indebted countries with lots of foreign creditors, such as Greece, would try to redenominate to reduce their real repayment burden. One way to accomplish this is to redenominate and immediately begin strong inflation to reduce the purchasing power of the repaid debt. Close historical parallels can be found after the collapse of the Austro-Hungarian Empire, which stood between and After the empire fell apart, many member countries hoped to retain the Austro-Hungarian krone as currency.
Unfortunately, several irresponsible governments used highly expansionary monetary policies to pay off the high debts from World War I, triggering hyperinflation in Austria by the early s.
Slovenia, Hungary, and others experienced much of the same. By , each former member nation had to use a new currency often backed by gold or silver. If the only change was a replacement of the euro by competing national currencies, the abolition of the euro would only create real long-term changes in monetary policy , which is how central banks control the money supply and lending to create economic growth. The eurozone was originally sold, in part, by the concept of creating a European counterpart to the U.
Federal Reserve. Eliminating the euro would decentralize monetary authority back to the member nations. For example, a German central bank would control interest rates and the money supply in Germany while a Portuguese central bank would control them in Portugal.
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