Europe in crisis: Bolt from the blue, by Ivan T Berend
| Author | Edelgard Mahant |
| Published date | 01 December 2013 |
| DOI | 10.1177/0020702013510128 |
| Date | 01 December 2013 |
| Subject Matter | Book Reviews |
International Journal
68(4) 649–660
!The Author(s) 2013
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DOI: 10.1177/0020702013510128
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Book Reviews
Book Reviews
Ivan T Berend
Europe in crisis: Bolt from the blue
New York: Routledge, 2013. 169pp., $17.45 (paperback) ISBN 978-0-415-63724-4
Reviewed by: Edelgard Mahant, Glendon College
Ivan Berend explains the genesis of the euro currency crisis and makes some rec-
ommendations for resolving that crisis. His viewpoint is that of a convinced
European federalist, and his conclusion is that the euro will survive (131).
Berend begins with three case studies. He explains how the Icelandic, Irish, and
Greek economies fell into serious economic crises between 2008 and 2012. The
following chapter includes three further case studies—Portugal, Italy, and Spain.
This time the case studies aim to show how the effects of the 2008 financial crisis in
the US together with mistakes made in Europe, by both the EU and national
governments, combined to cause fiscal and financial crises in all three countries.
These cases are informative, even if one does not agree with Berend’s view that the
crises were to a large extent caused by the movement of the European economies
away from industrial production toward what he terms financialization.
What Berend ignores is that most of the world’s successful economies have
progressed from a reliance on the production of things to a reliance on the pro-
duction of services, which, of course, includes financial services. The economies of
all the wealthy industrialized countries now derive a majority of their wealth from
tertiary industries. Germany is unique in that it has preserved a significant manu-
facturing sector, but even Germany derives the majority of its wealth from service
industries. The German economy (along with that of Poland) is one of Europe’s
most successful, but it is hardly logical to derive prescriptions from a sample of
one. That said, Berend does have a point when he ascribes some of the Western
economies’ financial problems to the creation of ever more refined financial instru-
ments, derivatives of derivatives, which make it all but impossible to determine the
creditworthiness of the original products.
Having diagnosed the problem, Berend suggests possible solutions. These
include a more federal Europe with direct European supervision of the banking
sector and a European Central Bank that could raise money in the bond markets.
But, he writes, if the euro survives, as he predicts, then the union may have to
allow some ‘‘irresponsible or peripheral’’ (134) or ‘‘totally bankrupt countries’’
(136) to leave.
The above statements point to one unfortunate aspect of this book—a tendency
to be judgmental about and to stereotype certain people and countries. Writing
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