Former U.S. Treasury Secretary Lawrence Summers speaks with Reuters Chrystia Freeland about the European Union's chances for survival during a discussion at The University of Western Ontario.
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Is -- Europe and survived and and should be morning team. -- I think we should do you want. The European Union to survive. Yeah this is about much more. Then banks. -- history. Europe for as long as it's been recorded. Has basically been a history of wars. Between people in one region of it and another region of it. For a thousand years. That has come to seem almost inconceivable. In most of the continent. And the reason. Is that there's been a very different kind of approach. Two coming together. After the worst of the wars the Second World War. Then there ever was before. And anyone who believes in friendship between nations. Who believes in economic integration. As a way of bringing people's. It together. Pass to believe. That the European Union is a profoundly good thing and wanted to succeed. Unfortunately. There is a tendency on the part. Political leaders. To believe -- economic things. Political will. Can overcome. Technical flaw. Can be monetary union. Had important. The internal contradictions within. One important internal contradiction. Involved. The degree of difference. Between the different. European economies. Perhaps the most profound one is. Justin by this example it's. Supposed that everyone in this room. Work to go to dinner. Tonight. And he was agreed that we would all pay. 1350. But the cost. I imagine that people would order quite lavishly. If we're gonna do that every day anyway we didn't figure out the first day that they were supposed to order quite lavishly would have figured it out by the end of the week. If we then said. Actually it's a little better than that not only are we each gonna go to dinner but where each gonna pay 1350. Of the party. And we can each invite as many friends as we want. The thing would get kind at a control. Well the -- it away is what happens. When you have a single printer of money. And you had many different. Blood sugars and acting without. Control. So and particularly. It is what happened when that there was 1 Central Bank. And banks that we're separately regulated. Each of the number of countries. The incentive. To. Over lever. To draw on the common pool. Was excessive. What's the natural control. The natural control is that the more responsible. Com and more powerful. Entities. Controlled or less powerful ones. But -- European history with. German control. Has not been happy in the twentieth century. And so there was resistance. Legitimate and understandable resistance to that. So in some ways what is surprising. Is not that the Euro is having a crisis. What is surprising is that it took as long for the Euro to happen crisis. As it has. Given that technical difficulty. He what was an enormously attractive. The vision. We are -- Going to get out of this. By supposing that if we're just patient. Things will come down. That is not the way bank runs and financial crises. War.