Context — June 24, 2016, 1:42 pm

Europe’s Hamilton Moment

The euro and its discontents

From “How Germany Reconquered Europe,” published in the February 2014 issue of Harper’s Magazine. Read the full article here. Subscribe to Harper’s Magazine for access to our entire 166-year archive.

Jeff Madrick authored Harper’s Anti-Economist column; James K. Galbraith is the Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, University of Texas, Austin; Ulrike Guérot is the Associate for Germany at the Open Society Initiative for Europe; John N. Gray is the Emeritus Professor of European Thought at the London School of Economics; Christian Lemke is the Max Weber Chair in German and European Studies at New York University; and Emmanuel Todd is a historian, social anthropologist, and political scientist at the National Institute of Demographic Studies, Paris.

guérot: Europe is facing its Hamiltonian moment: either we make it or we don’t. The United States was forged through a debt crisis after a war, and after a hundred years you made it and you have these automatic stabilizers in your system. So give us a hundred years’ time and then we’ll speak again.

galbraith: I have sympathy for your project of a grand, unified federal democracy, but you haven’t got a hundred years to build it. You haven’t got three years to build it. It’s a question of steps that should be taken now, that need to be taken in the next six months to prevent a very serious decline toward social disorder in certain parts of Europe. In Greece now you have a Nazi party that murdered an artist in the streets of Athens just in the past few days. This is a situation that is becoming exceptionally urgent.

lemke: I want briefly to address these problems Greece has. Looking at the problem-solving capacities of the European Union, it can do only so much. A lot depends on the countries themselves to implement reforms. Greece’s big problem is that it is totally polarized between left and right. The rise of the Golden Dawn Party is of great concern, but I think the polarization of the left is also a problem. Where is the center? Where is the civil society of the center that can hold this country together? That’s something the Greeks will have to solve by themselves. And it sometimes reminds me of Weimar Germany, when you had the right and the left being totally opposed to democracy, and what came out of it we know. If it doesn’t happen now it will be precisely because of the European context. In the 1920s Weimar Republic we did not have this kind of civilizing transnational discourse that we have now, making this a European issue and not just a Greek issue when you have a Nazi party harassing immigrants and spreading violence and fear. But I think that countries do much better if they address their own problems to a certain extent, and if they develop civil societies in the center.

todd: This is important. Countries should address their own problems.

lemke: Has France?

todd: No, because of Europe! Because we all know in France that as soon as a politician starts saying that some problem will be solved at the European level, that means no one is going to do anything. Sometimes it can be pleasant. When we had this discussion about an absurd war against Syria, suddenly Hollande — I call him “Vice Chancellor Hollande” rather than “President,” because he has no power left at all — suddenly Vice Chancellor Hollande said, We’ll address the problem at the European level. Well, I felt safe again. That means we’re going to do nothing! So Europe can be of some use.

guérot: I think we should move away from Greece, because it’s not the critical issue for the future of the euro zone. The critical thing for me is still Franco-German synergy. The key to the euro’s future is in Paris’s hands. If the Franco-German engine breaks down, then I think the euro is dead. And because most people in France and most people in Germany know this, it won’t happen. That’s my guess. Scenarios about Greece and Portugal and Ireland are, in a way — I’m sorry to say this — secondary. The real question is: Will France and Germany stick together?

gray: Well, here I do agree. I think the relationship between France and Germany is crucial, and so the ultimate mechanism for ending the euro might be a breakdown of that relationship. A different path to breakup could involve more countries, because we’re living in a world of extremely active bond markets and financial markets generally, and if one peels off for one reason or another then the next one will be attacked. In a sense, European projects come up against, it seems to me, the dominant forces in the past hundred years. One is popular sovereignty, which has so far only been expressed at the national level. The second is, over the past twenty or thirty years, globalization of markets. While all this is going on, while Europe is introspectively contemplating its project of federal unification, very rapid, enormous changes are taking place in other countries, like China, like Brazil, like India, and so on.

I’ve spoken to Chinese officials about this. It’s a sort of mixture of wanting European currency to survive for basically conservative reasons — they’re terrified of the upheaval that would occur if it ever broke down — mixed with a complete inability to understand why the crisis hasn’t been solved. “Why don’t you stop it?” they ask, speaking to Europeans. But there’s no “you.” There’s the ECB, there’s the German political system, the French political system, and they’re all internally fractured to a high degree, so you have a series of different beliefs with shifting and competing goals confronting this enormous conundrum and so far unable to resolve it.

madrick: And yet we’re still here.

gray: Yes, but you’re here as a nation-state. I mean, I think the most successful nineteenth-century nation-state in the world is the United States.

guérot: Multinational by the way, right?

gray: It isn’t multinational. It isn’t multinational to any degree at all. Would any American describe the United States as multinational? Of course not.

guérot: Multi-ethnic, yes.

gray: It’s not the same thing! As long as there is confusion about that, we can’t understand the European situation. In the period from the 1880s up to the First World War and afterward, America pursued a policy of extremely intensive assimilation, through the school system and other ways, to force immigrants into a cohesive national culture. It’s a classical European nation-state and the most successful nation-state in the world. And that essentially seems to me why Europe’s project is going nowhere. It’s yesterday’s project, in a way. It’s a project that basically responds to the catastrophic history of Europe in the twentieth century, not to the situation now. Half of twenty-first-century Europe is suffering to address the twentieth-century German question.

galbraith: Very quickly on the historical point: the United States was an intensely divided country for the first ninety years of its existence. The division was the Mason–Dixon Line. North of it was free labor, south of it was slave labor. These were fundamentally incompatible systems that ended in civil war. From the Civil War until the beginning of a coherent civil policy that forged an economically unified nation-state was precisely sixty-eight years — that is to say, from 1865 to 1933. Sixty-eight years also happens to be the time that has elapsed since the end of the last great European civil war, so the clock is ticking, it seems to me, not only on Europe’s Hamilton moment but also on its Roosevelt moment.

todd: I’m really sorry, but the idea that there is such a thing as Franco-German friendship is just nonsense. In France we’re very glad we have no big problems with Germany and the wars are over. But the idea of a special cultural or sociological link between Germany and France is nonsense. Among the French bourgeoisie, the elite, there is a sort of reverence for Germany, because Germany is obviously more efficient and because the German people are obviously so much easier to govern than the French people, so there’s this kind of friendship in the upper classes. But the true cultural links for France — if you think in terms of political philosophy, democracy, freedom, individualism — the actual links are with Britain and the United States. It’s just that simple. So we have a political project with those countries through true cultural links. I mean, from a French point of view, getting out of the euro would be a tremendously good thing. This would imply that our governing classes would start governing again, that we’d have full national responsibility. People tend to be resigned to the idea of the nation as a thing of the past. Yes, nationalism was responsible for violent conflicts across Europe and elsewhere. But the nation itself is not bad. The nation is the place for democracy, for making decisions. What would happen if the euro zone broke up? In France we would have some economic problems, adjustment problems, but being together as Frenchmen, doing things together, being, as we say in French, “in the same shit,” would be great! It would be the beginning of a new age, you see? There’s nothing terrifying about this.

madrick: It could also cause a sharp rise in inflation, a sharp rise in national debt.

todd: Yes, the collapse of the euro would be the gateway to defaulting on debt. But we have to default on debt anyway! There is such overaccumulation of capital in so few hands that defaulting on debt is our destiny.

galbraith: On the question of what happens if the euro zone should break up: There are two major possibilities. One is that it breaks up à la Yugoslavia, it breaks into pieces, in which case the integrated production and trade networks will collapse. We already have a model of this in Cyprus. You will have capital controls. You will have the dissolution of the existing economic units, cooperative companies, whatever they may be. You will have unemployment, disruption, massive migration. How much was the reduction of total output in Yugoslavia, or for that matter in the Soviet Union, when those entities broke up? On the order of 40 percent. It is something not to be taken lightly, it seems to me. What will happen is that if you’re selling BMWs in Italy the question will be: Do you pay back in lire or do you pay back in euros? And there’s no court mechanism for deciding these things! It’ll all be an enormous legal tangle that will tie up commercial relations for a very long time.

The second possibility, which is marginally easier but not very attractive, would be for the Germans to exit while the euro stays for the south. Then the debts would still be denominated in euros, which would depreciate, and that would make it much easier to ticket, and you could perhaps have a Mediterranean euro zone, headquartered in Paris.

todd: No, no, no. No, no, no.

galbraith: I’m just saying, that’s the second possibility. I think the chances of that happening are vanishingly small.

Read the full article here.

Single Page

More from Harper's Magazine:

Weekly Review April 23, 2019, 3:19 pm

Weekly Review

Notre Dame burned; a journalist was killed by the New I.R.A.; “the Crazy Mueller Report” was made public

Weekly Review March 26, 2019, 10:29 am

Weekly Review

The Mueller investigation concluded; two students who survived the mass shooting in Parkland, Florida, and the father of a student who was killed in the mass shooting in Newtown, Connecticut, died by suicide; Flat Earthers commented on their upcoming cruise

Memento Mori May 23, 2018, 10:15 am

Philip Roth (1933–2018)

Remembering Philip Roth

Get access to 169 years of
Harper’s for only $23.99

United States Canada



September 2019

The Wood Chipper

= Subscribers only.
Sign in here.
Subscribe here.

Common Ground

= Subscribers only.
Sign in here.
Subscribe here.

Love and Acid

= Subscribers only.
Sign in here.
Subscribe here.

The Black Axe

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content


Common Ground·

= Subscribers only.
Sign in here.
Subscribe here.

Thirty miles from the coast, on a desert plateau in the Judaean Mountains without natural resources or protection, Jerusalem is not a promising site for one of the world’s great cities, which partly explains why it has been burned to the ground twice and besieged or attacked more than seventy times. Much of the Old City that draws millions of tourists and Holy Land pilgrims dates back two thousand years, but the area ­likely served as the seat of the Judaean monarchy a full millennium before that. According to the Bible, King David conquered the Canaanite city and established it as his capital, but over centuries of destruction and rebuilding all traces of that period were lost. In 1867, a British military officer named Charles Warren set out to find the remnants of David’s kingdom. He expected to search below the famed Temple Mount, known to Muslims as the Haram al-Sharif, but the Ottoman authorities denied his request to excavate there. Warren decided to dig instead on a slope outside the Old City walls, observing that the Psalms describe Jerusalem as lying in a valley surrounded by hills, not on top of one.

On a Monday morning earlier this year, I walked from the Old City’s Muslim Quarter to the archaeological site that Warren unearthed, the ancient core of Jerusalem now known as the City of David. In the alleys of the Old City, stone insulated the air and awnings blocked the sun, so the streets were cold and dark and the mood was somber. Only the pilgrims were up this early. American church groups filed along the Via Dolorosa, holding thin wooden crosses and singing a hymn based on a line from the Gospel of Luke: “Jesus, remember me when you come into your kingdom.” Narrow shops sold gardenia, musk, and amber incense alongside sweatshirts promoting the Israel Defense Forces.

I passed through the Western Wall Plaza to the Dung Gate, popularly believed to mark the ancient route along which red heifers were led to the Temple for sacrifice. Outside the Old City walls, in the open air, I found light and heat and noise. Tour buses lined up like train cars along the ridge. Monday is the day when bar and bat mitzvahs are held in Israel, and drumbeats from distant celebrations mixed with the pounding of jackhammers from construction sites nearby. When I arrived at the City of David, workmen were refinishing the wooden deck at the site’s entrance and laying down a marble mosaic by the ticket window.


= Subscribers only.
Sign in here.
Subscribe here.

A documentary about climate change, domain names, and capital

The Black Axe·

= Subscribers only.
Sign in here.
Subscribe here.

Eleven years ago, on a bitter January night, dozens of young men, dressed in a uniform of black berets, white T-­shirts, and black pants, gathered on a hill overlooking the Nigerian city of Jos, shouting, dancing, and shooting guns into the black sky. A drummer pounded a rhythmic beat. Amid the roiling crowd, five men crawled toward a candlelit dais, where a white-­robed priest stood holding an axe. Leading them was John, a sophomore at the local college, powerfully built and baby-faced. Over the past six hours, he had been beaten and burned, trampled and taunted. He was exhausted. John looked out at the landscape beyond the priest. It was the harmattan season, when Saharan sand blots out the sky, and the city lights in the distance blurred in John’s eyes as if he were underwater.

John had been raised by a single mother in Kaduna, a hardscrabble city in Nigeria’s arid north. She’d worked all hours as a construction supplier, but the family still struggled to get by. Her three boys were left alone for long stretches, and they killed time hunting at a nearby lake while listening to American rap. At seventeen, John had enrolled at the University of Jos to study business. Four hours southeast of his native Kaduna, Jos was another world, temperate and green. John’s mother sent him an allowance, and he made cash on the side rearing guard dogs for sale in Port Harcourt, the perilous capital of Nigeria’s oil industry. But it wasn’t much. John’s older brother, also studying in Jos, hung around with a group of Axemen—members of the Black Axe fraternity—who partied hard and bought drugs and cars. Local media reported a flood of crimes that Axemen had allegedly committed, but his brother’s friends promised John that, were he to join the group, he wouldn’t be forced into anything illegal. He could just come to the parties, help out at the odd charity drive, and enjoy himself. It was up to him.

John knew that the Black Axe was into some “risky” stuff. But he thought it was worth it. Axemen were treated with respect and had connections to important people. Without a network, John’s chances of getting a good job post-­degree were almost nil. In his second year, he decided to join, or “bam.” On the day of the initiation, John was given a shopping list: candles, bug spray, a kola nut (a caffeinated nut native to West Africa), razor blades, and 10,000 Nigerian naira (around thirty dollars)—his bamming fee. He carried it all to the top of the hill. Once night fell, Axemen made John and the other four initiates lie on their stomachs in the dirt, pressed toge­ther shoulder to shoulder, and hurled insults at them. They reeked like goats, some Axemen screamed. Others lashed them with sticks. Each Axeman walked over their backs four times. Somebody lit the bug spray on fire, and ran the flames across them, “burning that goat stink from us,” John recalled.

Who Is She?·

= Subscribers only.
Sign in here.
Subscribe here.

I couldn’t leave. I couldn’t get up—­just couldn’t get up, couldn’t get up or leave. All day lying in that median, unable. Was this misery or joy?

It’s happened to you, too, hasn’t it? A habit or phase, a marriage, a disease, children or drugs, money or debt—­something you believed inescapable, something that had been going on for so long that you’d forgotten any and every step taken to lead your life here. What did you do? How did this happen? When you try to solve the crossword, someone keeps adding clues.

It’s happened to us all. The impossible knowledge is the one we all want—­the big why, the big how. Who among us won’t buy that lotto ticket? This is where stories come from and, believe me, there are only two kinds: ­one, naked lies, and two, pot holders, gas masks, condoms—­something you must carefully place between yourself and a truth too dangerous to touch.

Murder Italian Style·

= Subscribers only.
Sign in here.
Subscribe here.

The Catholic School, by Edoardo Albinati. Farrar, Straus and Giroux. 1,280 pages. $40.

In a quiet northern suburb of Rome, a woman hears noises in the street and sends her son to investigate. Someone is locked in the trunk of a Fiat 127. The police arrive and find one girl seriously injured, together with the corpse of a second. Both have been raped, tortured, and left for dead. The survivor speaks of three young aggressors and a villa by the sea. Within hours two of the men have been arrested. The other will never be found.

Cost of renting a giant panda from the Chinese government, per day:


A recent earthquake in Chile was found to have shifted the city of Concepción ten feet to the west, shortened Earth’s days by 1.26 microseconds, and shifted the planet’s axis by nearly three inches.

A federal judge in South Carolina ruled in favor of personal-injury lawyer George Sink Sr., who had sued his son, George Sink Jr., for using his own name at his competing law firm.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!


Happiness Is a Worn Gun


“Nowadays, most states let just about anybody who wants a concealed-handgun permit have one; in seventeen states, you don’t even have to be a resident. Nobody knows exactly how many Americans carry guns, because not all states release their numbers, and even if they did, not all permit holders carry all the time. But it’s safe to assume that as many as 6 million Americans are walking around with firearms under their clothes.”

Subscribe Today