“The integration project should therefore be re-thought or even re-invented to make it fit for the challenges of the 21st century. Novel ideas are more likely to originate at the grass-root level than at the top level in Brussels.”

The elephant in the parlour is fiat money and fractional reserve banking. There is simply no way these money *creation* schemes can be operated without producing ugly *redistribution* effects. The question always becomes who is to benefit at the expense of whom?

All currency unions based on fiat money have split on this rock. A party to the currency union is able to exploit the commitment of others to it by going into debt and then threatening the whole union with disintegration if it can’t parasitise the others, which is in effect what Greece is doing.

The only way to avoid that is to abolish fiat money and fractional reserve banking. This is easily done but obviously the political class aren’t going to do it. They’re the ones who are doing it so as to redistribute wealth *up* - in their direction! The fact it’s immoral, and economically disastrous doesn’t bother them because if they weren’t the most unprincipled people in the whole community, they wouldn’t be politicians in the first place, would they?

The scam is simple: forcibly displace society’s preferred choice of money – precious metals and certificates of deposit – with government’s paper rubbish based on endlessly expanding government debt and granting banks a licence to print money. It’s not pretty, but anyone who thinks the solution is more of the same is dreaming. But that’s all the European politicians and bureaucrats have come up with, in a fantasy that they can just keep shafting someone, anyone! It's a shell game.

The limiting factor on Europe achieving integration quickly, ethically and practically is the limitation of *ideas*. If people understood what fiat money and fractional reserve banking are, they would understand that they are systematic and regressive fraud and should be abolished: http://www.lewrockwell.com/north/north83.html

External events are not of themselves responsible for Europe's woes, but rather the individual member states of the union copying the lead of the corrupt/disingenuous Wall Street bankers and investment houses who/which caused the GFC, which is still in progress, and by many of the member states living vicariously on debt. Greed and populist politics in full stride.

If Greece goes into default, into virtual bankruptcy, and is expelled from the union, the union will not automatically go into collapse and disintegration, but will probably hardly miss a beat, for Greece is only small potatoes. The bigger threat to the union is the possible default of Italy, and maybe France. However, the other threatening unknown is if the union bails out Greece, and is then faced with bailing out Italy, followed by .....? Whether Greece is bailed out or not, the much bigger struggling fish remain.

There is still argument about the efficacy of the Wall Street bailouts and the monetary easing which has followed. The U.S. is in something of a fiscal crisis, still unfolding, and a viewpoint remains that it may have been better to have let the chips fall where they may, to let the sound survive and the unsound go under, and then rebuild. Any lesson for Europe here? Is some debt write-off efficacious, even inevitable?

Does the EU require a complete rethink? I think not, but certainly a revision of the banking system and of arrangements to ensure the fiscal responsibility and soundness of the member states. The EU remains a good idea, and its survival and rebuilding is in everyone's best interest. Let's leave the good/bad old days behind.

From the author: "...we certainly need to merge power with wisdom in the difficult years to come." Here, here! Where do we sign up!

Jan Zeilonka

You say: Tuchman described how leaders throughout human history have acted "contrary to the way reason points and enlightened self-interest suggests" (The March of Folly: from Troy to Vietnam) –

Days ago I noted a sticker on a pole. It read: “Worried about your memory?” Under it somebody scribbled “Forget”

So, as Tuchman is dead-right, we have no better alterative than the one suggested to the memory looser.

The selling of a defective product:

...What the West needs urgently, is consideration of the principals of “Behavioural Economics” by their leaders. In short, as demonstrated in Greece for example, Greeks are convinced Banks are the sole cause of their cold discomfort in austerity. This belief may or may not be true; but coupled with the belief, is another significant belief; Politicians cannot be trusted to deliver any outcome for their (Greeks) benefit, which is not connived between the distrusted banking system and their distrusted Politicians.

...Politicians need urgently to re-market themselves and the banking system, to align the “sell” of the “deficient” product to the ingrained bias of the Greek population (in this example). To-date, all marketing is focused on re-election of Politicians for the next term. Papandreou was on the mark with marketing the bail-out by insisting on a referendum which would include-in the Greek people; figuratively, that is, placing an “inclusive” arm around them, and inviting them on-board with the decision: A great marketing technique, since, without the approval of the Greek population, no economic engineering of the Greek economy will succeed. Success is about perceptions, the perceived bias of the Greeks is to attribute no fault to themselves for the debt crisis.

...It is not only necessary to engineer economic reforms, but it is likewise imperative to “sell” the product for the product to be successful in terms of individual National stability, where reform must be implemented (marketed) and not imposed (dictated)

PS Jan Zeilonka:

A great article with an honest view!

Peter Hume has this one 100% correct.
The issue is money creation from nothing, and *massive* parasitical drawing of money to those who create nothing from those who work and create wealth.
The politicians and bankers are putting up smoke screens, the media is wafting the smoke about and amplifying it. But the elephant in the room, fiat money, is still there and still smelly.