S2 Ep39. The Crisis of our Times. Part 13. The European Union: Between a Rock and a Hard Place. Part B

The core problem of the European Union lies in its economic arrangements that, should they not be modified, will probably break apart the union as we currently know it. As well as the deep differences between EU member states there is a lack of economic flexibility that arises from adopting a common currency. The rigid maintenance of the Euro with the absence of flexible exchange rates plus the escalating debts of the union will undermine its coherence, lead to the downfall of the Euro, and provoke a severe banking crisis which will go global and endanger the Union. Division in the EU has sharpened. Thus, the EU leaders are caught between a rock and hard place. On the one hand, as countries enter into economic crises, there is threat of the breakup of the union and the destruction of the European dream, the great project. A banking crisis would be sure to follow as debts are reneged upon and the lending banks collapse triggering a global financial crisis. On the other hand, the opposite: the road of federalisation, the defence of the Euro, and the placating of weaker member states. The issuing of a common European debt is a milestone on this path.