E Pluribus Euro
Europe is acting like a nation. Not a united states of Europe, in the American mold, to be sure. But a purposeful team with a gradually unifying economy, defense, global outlook, business culture, and consumer base, moving more surely than skeptics had thought possible.Skip to next paragraph
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This is good news for the world. It provides, as it were, a source for a second opinion to keep the American superpower's leaders on their toes.
It bolsters Europe as an engine for growth in a world where the business cycle waxes and wanes unevenly across geography. When Japan slows, as it has this decade, a strong EU, shorn of currency frictions and rid of some of its indecisiveness, can more effectively join the US in keeping world trade healthy.
The new EU maturity also ensures another strong currency, the euro, for nations and individuals to use for stabilizing of trade and living standards.
Having the European Union (EU) acting more like a genuine union is also, obviously, good for Europeans.
Take the recent interest rate cuts by the 11 central banks whose nations are at the financial heart of Europe. Having the central bankers perform with the precision of a chorus line (with Italy only a slight kick off) is a big vote for growth and job creation in a low inflation environment. That the central bankers enjoyed dancing in unison before the new European Central Bank takes over shows how confidence in unity may feed on itself. Call it the Greenspanning of Europe.
Remember the heavy pall of doubt that hung over public attitudes toward the euro? Now there is confident talk instead. Talk of how citizens will enjoy traveling from one corner of Europe to another without losing time and money at foreign exchange booths. Talk of consumers benefitting from uniform, lower prices across borders.
Add to this the welcome news that Britain has joined France in pushing for a more active, unified EU defense. If monetary and defense policies continue to converge and become more assertive, EU foreign policy seems likely to do likewise.
Europe's leaders should be wary, however, of moves that stifle competition. One case in point: German pressure for aligning business taxes. In the US, states compete with each other to lure business and skilled work forces. The result is beneficial in efficiency and cultural vitality. European states should not give up that asset.