In 2017 the demolition of the Eurozone is quite possible, but not yet probable.

Modern man stands to democracy as his ancestors were standing to God two hundred years ago. He wants to be considered a decent man, and also a rational one. Sometimes, however, he disagrees with himself as a democrat and with how democracy, an ambiguous word, really works.

In 2016 democrats in three very important countries, Great Britain, the United States, and Italy, have been offered the chance to exercise the democratic rule of “one man, one vote” and the majority decides.

In Great Britain the electorate chose to leave the European Union, a choice which was to make it undoubtedly poorer but also to give it the illusion of being able to close its frontiers to more than a trickle of immigrants. The country in 2016 held its frontiers fairly open to 600,000 growth and 330,000 net immigrants, and then demanded a limit of only 10,000 in the future, a limit which no government was able to respect as a matter of practical politics. The illusion of making Britain reserved for the British will cost them a reduction in their standard of living, but no one can pretend to call this an irrational choice.

The Italian economy, rich in talent and energy, has had practically no growth in the last generation. The direct culprit is the “anti-fascist ” and eminently democratic constitution and a long series of short lived governments that have done little to prevent the economy from continuing its bad habits of no competition and inefficient labour relations. The 2016 referendum offered the choice of a radically different constitution capable of long lived decisions in the interest of modern liberal markets. This choice was rejected by an overwhelming majority, more in order to punish the politicians who had governed under the old constitution than for any desire for a new one. Using a democratic alternative, the Italian electorate has punished itself.

American electors envisaged government as a man and his followers who want to turn the clock back, while also promising more investment and fewer taxes, a program which is very audacious but perhaps a little too short on credibility. The voters were divided by two measures. In one, while all were benefiting from free trade as consumers, some producers were losing in competition with the Chinese, the Mexicans, and other foreigners whose imports were regarded as “unfair competition” in the domestic market; never mind the gains that U.S. exporters earned in foreign markets. The other measure which separated losers from gainers was the secular trend in which industrial products took a progressively smaller and services a greater share of the national income. Some of the service providers were in the high income classes, others at the bottom of the scale, while industrial workers earned income between that of service aristocrats and the service proletariat, being envious about one and fearing to descend into the other. By both measures, the industrial middle class felt badly done by. The end result, at least by using hindsight, was obvious in the employment statistics and again does not contradict democratic rationality.

“After Brexit, a further two or three dissident countries would suffice for the European Union to dissolve….”

In the European program for 2017 there are two or three electoral tests that democracy may have to stand. There is an election in the Netherlands and one in France, both of them with a “populist” party almost, but not quite, having a chance to win. Both would probably leave the European Union and the common currency area if given the chance. If there is an election in Italy as well, which may happen in the second half of the year, there may be a further candidate for exit. After Brexit, a further two or three dissident countries would suffice for the European Union to dissolve, an outcome which today looks very improbable but hardly impossible. The Brussels Commission is hardly unaware of this danger to its existence. The French member of the Commission, Mr. Moscovici, has actually proposed that three members of the Union with stronger financial positions, Germany, the Netherlands, and Luxembourg, should be invited to conduct a softer budget which would make the growth prospects of the other members a little less uncomfortable, but the proposal was for the moment rejected by these three countries which were supposed to act as volunteers.

The Brussels Commission has good reason to fear the future and its own survival. The Euro zone has suffered a miserable rate of growth since about 2008 and is hardly expected to have more than 1.2 or 1.3 percent both for this year and the next. On the other side of the Atlantic, the American economy showed some fatigue in the first half of 2016, but accelerated again and is likely to increase to as much as 4 percent by about year’s end. The President-elect during his primary campaign promised to double the rate of economic growth, although he did not say what the present rate was which he promises to double. At all events and with some scepticism about American growth, Europe is falling further behind and its capacity to catch up with the United States looks to be more and more distant.

The Powerful Number 3