Fukuyama predicts eurozone breakup

Francis Fukuyama speaks about "Are We Headed Towards Another Global Economic Crisis ? " during the Global HR Forum 2011 in Seoul, South Korea Keystone

Greece and other “peripheral” countries will likely abandon the eurozone in a bid to salvage their economies, says American political scientist Francis Fukuyama.

This content was published on December 2, 2011 - 08:15
Malcolm Curtis,

“The current path, it seems to me, is just not sustainable,” the influential academic and writer told a media conference at the Geneva Press Club on Wednesday.

“Either the EU will deepen into a fiscal union or it will start breaking up, or at least the monetary part of it will break up.”

His comments came on a day when six major central banks — including the Swiss National Bank — announced coordinated measures to ease the risk of a credit crunch linked to the debt crisis in the eurozone.

The European financial system has come under intense pressure over the high debt of governments in Greece and other countries, such as Spain and Italy.

“It’s more likely that Greece and some of these other peripheral countries are… going to wake up to the fact that they don’t have a way to grow unless they get out of the euro,” said Fukuyama.  “And so they’re going to leave.”

The academic, currently a senior fellow at Stanford University, established a global reputation with his controversial 1992 book The End of History and the Last Man.

In that book, Fukuyama maintained that the development of liberal democracies signalled the final end point in the struggle between competing political ideologies.

With its attempt to transcend nationalism and militarism, the EU more accurately reflected what the world would look like at the “end of history” than the United States, he argued.

But now this ideal, the author acknowledged to journalists, “is under severe stress”.

Identity crisis

Fukuyama, who later spoke at Geneva University, said the lack of a common European identity is a problem.

The EU, he noted, was initially created as a “technocratic enterprise” for economic and political reasons following the Second World War.

“But being a European does not have the kind of emotional content that still remains [with] being French, or Dutch or Scottish,” he said.

“That’s really at the root of the crisis because there is no sense of solidarity between the Greeks and the Germans right now.”

The German government has balked at propping up governments in the eurozone and has instead called for other countries to adopt more fiscal discipline.

“I don’t wish for this outcome,” Fukuyama said, of the possible breakup of the eurozone.


But he downplayed the potential fallout from several countries giving up the common currency.

“There’s been a lot of scare talk about what the consequences of some countries exiting the euro will be and a little bit of a tendency to exaggerate the cost, just because everybody wants to scare the politicians into not going down that path,” he said.

“But I suspect, if people put their minds to it, you actually could have some countries exit the monetary zone and not have the world collapse, and not have the EU collapse.”

Around 700 people crammed into an auditorium at Geneva University on Wednesday night to hear the intellectual address the issue of European Identity.

His lecture was part of the Latsis Prize awards ceremony that honoured four top Swiss academics under the age of 40 (see sidebar).

Fukuyama fleshed out his ideas about “identity politics,” the roles of nationalism and religion, and the differing approaches taken to immigration by various European states.


He praised France’s secular “republicanism” as the best model in Europe for handling immigrants, with its emphasis on a common language and education system.

He contrasted this with policies in Britain and the Netherlands that have isolated ethnic groups and sowed division in those countries.  And Germany, he said, is still living under the influence of a policy that until 2000 accepted only “ethnic” Germans as citizens.

While he laments the absence of a European identity, he took issue with one journalist’s suggestion that Switzerland also lacked one.

“It’s true that it’s not the French style based on a single language and a very uniform educational system ,” he said.

“But I still think across the different linguistic communities in Switzerland there is still actually a common cantonal organisation of life, a shared political system and… shared values.

“Of course, there are regional differences in different parts of Switzerland. But being Swiss is really different from being German, and it’s really different from being French.”

Latsis Prize

Funded by the Geneva-based charitable foundation established in 1975 by Greek shipping magnate John Latsis.

Every year the foundation honours four top Swiss university scholars under the age of 40 selected by Geneva University, St Gallen University and the Federal Institutes of Technology in Lausanne and Zurich.

This year’s winners, each receiving SFr25,000, were:

- Emmanuel Abbé, a researcher and lecturer at the Communications and Computer Sciences School at the Federal Institute for Technology in Lausanne (EPFL), for his  research into improving the efficiency of multi-user wireless networks.

- Dominic Eggel, from the Graduate Institute of International and Development Studies, for a thesis about 18th century German writers such as Goethe and Schiller and their contribution to ideas about Europe.

- Paoli Picotti, a biochemist at the Federal Institute of Technology at Zurich (ETH) for her research into biochemical protein networks.

- Conny Wunsch, currently at the University of Amsterdam and previously at St Gallen University, for her post-doctorate research into making unemployment insurance systems more effective.

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Francis Fukuyama

A senior fellow at the Centre on Democracy, Development and the Rule of Law at Stanford University, California.

A political scientist interested in developing nations, governance, nation-building and strategic issues.

His 1992 book The End of History and the Last Man caused controversy by proclaiming the triumph of liberal democracy after the fall of the Berlin Wall in 1989.

Fukuyama says in developing this thesis he was inspired by Alexandre Kojève, a bureaucrat in the French government who helped found the EU. Kojève was revealed after his death in 1968 to be a KGB spy, a bizarre development that Fukuyama acknowledged on Wednesday at his Geneva press conference.

His latest book is The Origins of Political Order, published in April 2011. This is the first of a two-volume series on the history of political institutions.

Although associated with American neoconservative thinkers, Fukuyama has distanced himself from the movement. In the 2008 election he endorsed the candidacy of Barack Obama.

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