Fixing Europe


And the weak suffer what they must? Author: Yanis Varoufakis.

By Noel Grima – It has not been an easy summer for Europe. First the many terrorist attacks in France and in Germany. Now this earthquake in Italy. And, above anything, Brexit.

Each successive meeting of European leaders (and also those of finance ministers) ends with an announcement that a fix has been found, a new structure has been added on, and yet the deep fundamental issues that undermine the euro have not yet been tackled.

The real villain of the book is Richard Nixon and his Treasury Secretary John Connally and Under-Secretary Paul Volcker.

On 15 August 1971 they told an unsuspecting Europe that the US would be dismantling the global monetary system it had created and maintained for many years. In effect, it was pulling out the rug from under Europe’s feet.

Europe was in a way to blame for this, for the preceding years had shown many times that Europe was coming to chafe under the US hegemony. So the US pulled the plug from the Bretton Woods agreement which had fixed the US dollar against a fixed amount of gold.

Since then, since this American rejection, the European leaders have been engaged in a series of knee-jerk reactions that – 40 years later – have led the euro to the brink of collapse. We can read about everything that came later – the European Monetary System, the snake, the euro – as so many knee-jerk reactions to the US 1971 decision. more>

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