One of the positive by-products of the financial crisis is the knowledge that we should glad to have several banking systems.
I have not opposed to the introduction of the euro and I still think that it is a good idea, but the real value of the euro will be proved in these hard times. Now is the moment of truth.
Cooperation is a difficult game and tends to be harder when the economy is in a slump. People do not mind to solidarism as long as they are in a good position. The conflict in Belgium shows this; the Flemish resist somehow to “support" Wallonia not in the last place because of an economic downturn, problems with immigration, etc.
The recent example of Ireland - although inflated by the media - that individual countries will try to survive for themselves and do not trust an alien (central banking) system that they do not know long enough.
It all comes down to the creating of confidence and the chosen construction (the ECB) should support it. This is for Europe a moment where they can show strength. They can show that Europe is different than the US and not less powerful, although their organizing process and priorities are quite different.
The Euro zone also shows that building confidence takes years if not decades. And a zone is always a limited area. It is not possible to extent such a zone to a global system in which all other zones are integrated.
The strength of the current systems is that they keep each other awake.
Competition in the approach of offering stability has shown to be effective.
Also, for the first time, the treats of globalization are felt by those who have embraced this phenomenon. So far the “rich" have seen positive effects of globalization where companies were able to expand. Risks like these, where one problem in an area may endanger the whole system has never been caused a problem before.
H. J. B.
© 2008 Hans Bool