"Europe is looking down the barrel of a gun," says a leading City of London analyst. "If Emu doesn't happen, meltdown might." This doomsday view is certainly not one shared by all market analysts. But might there be more truth in it than most politicians seem willing to admit? The first questions to ask are what is actually meant by meltdown, what are the reasons why it might come about, and what are the alternatives for Europe?
A study by the Federation Trust for Education and Research has forecast four possible outcomes for Europe: an Emu with many country members, a smaller Emu of a few countries, a Europe that looks much as it does today but without the hope of future monetary integration and, finally, the so-called meltdown option.
The Federation Trust study elaborates on the last possibility, painting a picture of a disintegrating Europe in which structures of cooperation and mutual benefit collapse. This would mean the end of the post-war dream to build Europe into "the third way" - an economic power bloc to rival those of the US and Japan. On this outlook the Europe-wide political structures would lose authority and then power as disagreements and rivalries between national governments intensified without the unifying force of a common project.