Europe Is in More Danger Than at Any Time Since the 1930s
Something like this could happen again
Ours is a complacent continent. Despite impending events that would have precipitated a revolution in almost any other place at almost any other time in history - either a collapse of the currency or the complete secession of budgetary control to a supra-natural body in the EU - we expect the fabric of European society to endure without major changes. I think we are wrong.
There is a presumption of perpetual peace in Europe which rests in turn on a presumption of the perpetuity of our existing capital structures. Once the latter are undermined, the former is called into question.
The great wars of the secular age have all been fought between ideologies which seek to restructure the relationship between capital and the people. As popular support grows for such plans, Western Europe is entering its most dangerous phase since the 1930s.
As in the early 1930s, the decision on the fate of financial order on the continent rests with debtor countries who admit no guilt for their debt. And, once again, faith is being placed in the treaty system to maintain order. To push the analogy further, I believe that the dominant form of political organisation over the next decade will be nationalism. We are one charismatic leader away from a complete re-ordering of the continent.
The problem with reparations, halted under the Nazi Party in 1933, was not that the Germans were unable to pay a debt which amounted to 83pc of GDP in 1923: on the contrary, they were (I recommend AJP Taylor’s Origins of the Second World War on this point). Instead, it was that neither Germany nor pre-Anschluss Austria recognised the “war guilt” clause in the Treaty of Versailles which justified such payments.
Not only did the debtors believe the debts unjust, so did the creditors. Sophisticated opinion in Britain, shared by Cabinet ministers and Keynes, held that the peace terms were unduly harsh on the Germans and would cause unnecessary deprivation. This combination of stubbornness and sympathy ensured that when debts eventually went unpaid, no nation intervened to support the existing financial system.