According to an estimate made by estimated an American political scientist Francis Fukuyama, the European Union will survive the current financial crisis, but Euro as the single currency in the region may not.
“I do not think the European Union as such will collapse, but I think the Euro cannot continue. I think there should be some kind of fragmentation of the Euro area,” said Fukuyama.
The political analyst noted that the alternative proposed by Germany, which is to move towards a fiscal union, is “just not going to happen politically”.
For the controversial author of “The End of History”, it will be difficult to predict what might happen with the current financial crisis being experienced by the countries of the EU.
“It might make sense for the stronger countries in northern Europe to form their own money or have some type of monetary system, but France and Italy cannot be part of it,” he said.
Fukuyama said “this will have serious consequences for Europe as a whole,” after explaining that the old continent “is not a country as such.”
“If you look at Scandinavia, Germany, and the Netherlands in terms of domestic governance, they have done very well. I think, in terms of social policy, they have managed to keep the jobs in manufacturing in a way that is healthier than the U.S.,” said.
Fukuyama warned that major problems regions are Greece and Italy. He also said that the cases of Spain and Ireland are different because they have a good fiscal policy and have only suffered a major banking crisis.
“The big problem is at the European level where they locked in a common currency without a common fiscal policy or mechanism to get out,” he said.