Is the euro behind Belgium's blowup?
The Economist's Certain ideas of Europe blog makes a point I hadn't thought of:
WILFRIED MARTENS, the former prime minister of Belgium and a grand old man of Christian Democratic politics in Europe, is not the first person to observe that the euro deserves thanks for keeping Belgium calm during the country's current political crisis (103 days without a new government). But he is the best qualified to make this point. As prime minister in the 1980s, he lived through political fights as bitter as anything seen today. But the fact that Belgium had its own currency, the franc, made a crucial difference, he recalls. Politicians knew they had a duty to resolve their disputes as quickly as possible, and end the damage being done to the franc.
In an interview with La Libre Belgique, Mr Martens recalls being visisted by central bankers from the Belgian national bank, pleading with him to resolve the latest crisis (this was in 1981).
"They told us all the time how they were having to intervene every day, billions at a time, to support the value of the Belgian franc," he recalls.
Today, with Belgium part of the single European currency, its politicians have no urgent monetary reasons to end their disputes: the Belgian travails have caused not a ripple within the vast euro system, which is far more concerned just now with the American economy than Brussels squabbling. (In proof of which, the euro this week just headed past 1.40 to the dollar).
The problem of disentangling financial assets and currency is one of the major forces mitigating against separatism. It's generally a good bet that the weaker party in the national union will be the one to lose out from a separation; given their financial and political structure, for example, I'd expect to see a Quebecois franc trail the Canadian dollar by a considerable margin. (Although I'm pretty sure Alberta would experience the many joys of a rapidly appreciating currency). Now that the European Union has taken over the currency, as well as many of the trade and customs functions of traditional federal governments, Belgium as a state suddenly looks a lot less necessary. One wonders if the current era of economic integration (assuming it continues) might not bring increasing political balkanization.