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Definitely the topic of the year when it comes to economics is the Euro in its philosophy, stability and

future. Will Greece be bailed out? What will it cost? Will Italy, Spain, Portugal and Ireland have to be

bailed out? What might that cost? Is it possible at all? Should countries be expelled from the Euro?

While most reporting went on the numerous meetings and their outcome, we focus here on the

interdependency between hard economical facts and institutional processes on the one hand and

the psychological side of statehood on the other. As it shows, the problems with the Euro reflect

primarily a problem of national identity.

In fact, the Euro is a unique currency. Institutionally, it is backed not by a government of a country

and its central bank but by a loose union of countries and a central bank created to serve them all.

Historically, the Euro deviates in its very existence from the normal developmental pattern of

currencies. The introduction of a common currency was in history always the crown of political and

economical unification. In contrast, the Euro was intended to serve as a common pair of shoes in

which the countries of the European Union should walk towards integration. In fact, its origin is hard

to locate. The idea of a common currency reaches back into the 60ties, but realization had to wait

until the 90ties. Influential German weekly Der Spiegel regularly speculates the shoes of the Euro

were designed by Chancellor Kohl of Germany and President Mitterrand of France to tie the now

reunited Germany to France forever. What makes matters even more complicated is that the Euro did

not become the currency of the European Union. Two big (United Kingdom, Poland) and some small

(e.g. Czech Republic, Denmark, Sweden) countries kept their local currencies. This national

individualism reflects the problem of the European Union in general. Not all liked these shoes and it

was never agreed upon on which roads the shoes of the Euro and the European Union should travel

when it comes to integration and real power sharing. On the contrary, all member states of the Union

stress their sovereign rights especially when it comes to their household. Germanys Supreme Court

just recently confirmed a prior ruling that its the sole privilege of Germanys parliamentarians to

decide about any funds. The fiscal measures and external controls imposed mainly by Germany and

France on Greece would not be possible for these countries themselves.

This does not mean that the Europeans dislike Europe. In fact, they love it spending their holidays in

their neighbor countries, studying or working there and sharing food, cars, commodities, and lifestyle.

But they have in common a strong skepticism when it comes to their own local politicians. This

skepticism turns into real dislike when it comes to European institutions. These institutions aresimply hard to sell in their rights and functions. In front of a national sovereignty expressed in local

royalty, presidents, chancellors, and their parliaments, its not easy to understand what all the people

in the big office complexes in Brussels actually are doing. Evidently they create complicated texts

which are not taken too seriously by the national governments. Most governments did not dare to

submit the Maastricht treaty, the central document of unification, to a public referendum and those

who dared sometimes needed to have it voted upon twice to achieve at least a narrow majority. And

people seem to be right. For what are these treaties worth? When France and Germany violated the

3% GDP debt barrier of the stability pact in 2003, not the stipulated fines were imposed but just a

few eyebrows raised. As far as national debt is concerned 195 of the Maastricht Treaty states in

one clear sentence that no country can be held liable for the debt of another one. And when Denmark

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this summer became afraid of having to harbor refugees from the arabellion in Northern Africa,

border patrols keeping them out were reactivated.

Barrack Obama mocked that the G20 summit in Cannes taught him an obviously incomplete lesson

on how many institutions and voices have to be heard when it comes to European affairs. However,

his obvious relief that governing the US may be easier at least when it comes to the institutional side,

points to the ever growing complexity of the European Union. The result of the Euro crisis 2011 is not

a new statutory for the European Central Bank, but again the emergence of new institutions like the

ESF (European Stability Fund) or the EFSF (European Financial Stability Facility). The European Union

disintegrated visibly when member states without the Euro had to leave the conference hall so that

members of the Eurozone could confer in private. Yes, a new institution to integrate these two zones

seems to be a good idea.

If the Euro should fail one day it will not do so because of the debt of some countries. Debt can be

settled. But the institutionalism of the European Union can hardly be tamed and will express even

more what it does already now: The European Union is a matter of the mind and not of the heart of its

people. In essence, they want to determine their fate primarily in the context of their nations

embedded in something practical when it comes to the neighbors, which was once the European

Economic Union. A united military, a real president of Europe, a common household is currently not

only beyond imagination but also incompatible with national constitutions. Certainly no king and

queen in Europe wants a new Emperor.

But as much as they haggle when it comes to the debt of neighbors, all bigger countries of the

European Union face the problem of creating equal conditions of living for its citizens despite strongregional differences in productivity. They regularly solve this problem generously by their heart and

not with their mind: (West-) Germany transferred a staggering 1.000 bn Euro, five times more money

than its share in the EFSF, into its formerly communistic states after the unification. But even

nowadays, more than twenty years later, this goal is not reached and many think it never will be.

Nevertheless, only a few complain. Equal conditions of living are not only expressed as a state goal in

the German constitution, people also want them with their hearts. Help and support depend on

something the European Union just does not and maybe cannot have: The heart of a European

identity. Unfortunately.

Eurozone crisis explainedwww.managing-essentials.com/1ar