What’s Wrong With Europe? Cyprus Edition

Another day in the long-running European debt crisis: in Nicosia, an ancient city in the eastern Mediterranean, the Cypriot parliament votes overwhelmingly to reject the terms of a proposed European Union bailout of the country that levied a tax of up to ten per cent on all bank deposits. Out on the streets, thousands of protestors chant, jubilantly, “Cyprus belongs to its people.” Meanwhile, according to Faisal Islam, the economics editor at Britain’s Channel 4 News, the cabs from the local airport have been busy ferrying wealthy Russians who are there trying to get their money out of the Cypriot banks.

No wonder a colleague of mine asked this morning: Why doesn’t Europe work like it did twenty years ago? How come it seems to be in constant crisis these days? The short answer is that, back then, the E.U. was a lot smaller than it is now, and it didn’t have a single currency. In 1993, there were just twelve members of what was then called the European Community, and, except for Greece, all of them were in Western Europe. Today, the E.U. stretches from the Atlantic to the Black Sea, and it contains twenty-seven countries, many of them very different from one another. Seventeen nations share the same currency, the euro, and one of them, unfortunately, is Cyprus.

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