The EU has a glorious past. The project of a United Europe has slowly and flawed but exemplarily overcome the nationalist barriers and reticence of its components. It has been the example of concord and voluntary union of peoples (diverse as they are) who only a generation before were fighting a world war, when the world was limited to being Western and there were only two sides.
In this delirious scenario we find ourselves in surreal situations such as the bailouts to be co-payable by all members, including the bailed out and the blacklisted futures. The slogan is «either we all play, or we break the deck», but with two minor details: we don't know how to play cards, nor will any politician ever dare to break the deck until it literally blows up (with the exception of Merkel's successor).
The ECB is faced with the irresolvable dilemma of maintaining appropriate rates for the peripheral economies that have gone into a tailspin, or controlling incipient inflation in countries where economic growth is already consolidating. Meanwhile, fiscal and labour policies are still determined at the free will of each state, i.e. in an electioneering and economically illiterate manner. And external budgetary controls are gradually being introduced de facto, contrary to all existing legislation and sovereignty. At the same time, accounting traps and deceptions are being uncovered, such as the Greek and other unspeakable ones, or other more subtle ones, such as, for example, the valuation of Spanish bank real estate. The spreads or yield differentials of sovereign debts increase their divergences and are only controlled, also illegally, by the ECB and other coordinated actions of the central banks of the most solvent EU countries. There are also exchanges of favours beyond European borders, but these purchases and movements of debt are part of political pacts and reasons of state that may only come to light in some memoirs, of dubious future credibility, to be published by some statesman in a couple of decades' time.
The single currency, on the other hand, acts as a groped nerd against which all other major currencies devalue. But the ECB has hotter fires than the value of the Euro, even though by allowing everyone to devalue against us, what it is doing is driving the competitiveness of the peripheral economies deeper and deeper into the mire. How on earth are we going to manage to balance the deficits without achieving competitiveness, if we do not even have the possibility of keeping the value of our currency competitive? It is not just a problem of labour policy, which is also a problem, but of structural aberrations such as the damage that exports are suffering and will suffer with a euro that is sky-high (well, more than sky-high I would say it is in limbo).
The geopolitical and energy crisis in the Middle East also generates tensions on the borders of southern Europe that call into question the very Schengen agreement, the real estate bubble like the Spanish one is not purged because it would destroy the banking system, half of the Greek deficit is already caused by the interest payments on its debt, the colombo-phobic elections that Merkel will be kicked out and replaced by a hawk is just around the corner, Portugal begins the crossing of a desert in which if it dies it will do so by killing, the next prey of the financial markets (Spain) is such a big piece that it will carry away a precarious EU, and so on and so forth.
The known reality in Europe is already virtual. And it is only a matter of time before the fragile equilibrium convulsively seeks a new stability. Yet another consequence of the New Normal. The financial crisis that began in 2007 has led to the degeneration of the traditional Eurosclerosis in a Euroschizophrenia that will change the state of the Old Continent as much, if not more, than the Great Wars did.
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