Some countries fall from greatness. For them, decline is absolute. Others face increasing competition from rising powers. Their decline is relative. However there is a third kind of decline that has more to do with degeneration than with failure, and less to do with competition than diminishing potential. This is a kind of morbid decline. It echoes the ‘decadence’ of the late 19th Century but without the implied culture of excess. The countries of the West might be accused of falling prey to this morbidity, so Benjamin Rowland and his contributors argue. Hence it is worth asking why that should be happening and what is to be done about it.
Europe’s Orphan: The Future of the Euro and the Politics of Debt. By Martin Sandbu. Princeton: Princeton University Press, 2015. 313 pp. $29.95. ISBN: 978-0-691-16830-2 (cloth).
The euro did not cause Europe’s economic crisis; policymakers did. By focusing too much attention on debt, by demanding that existing obligations be met in full (and creditors made whole), and by doing so against a backdrop of coordinated macroeconomic tightening, Europe’s policymakers ensured that the downturn in European macroeconomic performance would be deep, long, and destructive. These same policymakers only narrowly avoided disaster when they began to loosen monetary policy and to accept the need for some debt restructuring. Nevertheless, these efforts did not come soon enough, they were no comprehensive enough, and they were not applied consistently enough to prevent Europe from coming to the edge of disaster as elite macroeconomic ideology finally collided with the requirements for democratic legitimacy in Greece (and Germany) during the summer of 2015. This is the diagnosis Martin Sandbu offers to explain what went wrong.