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BMI, 12 [October, Business Monitor International, Would The Eurozone’s Collapse Lead To War?, http://www.riskwatchdog.com/2012/10/17/would-the-eurozone%E2%80%99s-collapse-lead-to-war/]

Since the worsening of the eurozone crisis, various European officials, including German Chancellor Angela Merkel, have warned that a collapse of the currency union could lead to war in Europe. UK Business Secretary Vince Cable became the latest figure to make such a statement, on Monday. Perhaps the Nobel committee was thinking along similar lines when it awarded the EU the Nobel Peace Prize last week. The eurozone is not the same as the EU, but if the eurozone collapses outright, then there would be a high risk that the EU would collapse, too.¶ Long Road From Eurozone Collapse To War Overall, we find the talk of war overblown to say the least. There is clearly a risk of rising civil unrest, but this would fall far short of ‘war’. The Europe of the 2010s is vastly different from the Europe of the 1930s. It is far richer and politically mature. There are several stages the eurozone crisis would need to pass through before the continent would be even remotely at risk of war: 1. Severe deterioration of intergovernmental cooperation: This would require governments to tear up existing EU treaties and laws and potentially adopt protectionist economic measures. 2. Severe deterioration of economic conditions in European states: This could theoretically pave the way for extremist takeovers, although this would still be far from guaranteed. Severe economic crises in the Asian ‘tigers’ in 1997-1998, Russia in 1998, Argentina in 2001-2002, the Baltic states in 2008-2010, and Greece in 2010-2012 have not led to ultra-right wing or ultra-left wing governments being elected or seizing power (although Argentina has in recent years moved in that direction). Even for the economically marginalised, living standards today are far higher than in the 1930s. 3. Extremist takeovers in key states: Far-right or far-left parties would need to come to power. Even so, they would not necessarily lead their countries to war, since their immediate priority would be to restore economic growth. Conflict risks would rise, however, if a group of ‘moderate’ European states decided to sanction, isolate, or contain ‘extreme’ European states. The ‘extreme’ states could also conceivably seek to funnel their unemployed young people into their militaries, but this may not be affordable, financially. Military build-ups cost a lot of money. 4. Revival of old territorial disputes: Europe’s 19th and 20th century wars were primarily about land-grabs. Territorial disputes used to be the norm. Nowadays, though, most territorial disputes are largely resolved. These could conceivably gain a new lease of life through manipulation by provocative politicians, but it is unclear if they would stir the passions of the public. 5. Break-up of existing EU states: War could occur if an existing EU state were to break up violently. However, it is difficult to see the British or Spanish governments using force to prevent the secession of Scotland or Catalonia, or Belgium or Italy splitting up violently. All these countries and territories are much more politically and economically advanced than Yugoslavia was in 1990. However, if a group of EU states assisted the separation of a breakaway region, this could be a casus belli.¶ 6. Dissolution or neutralisation of NATO: Some European doomsayers forget that NATO still exists, and that the US still guarantees the security of Europe by basing tens of thousands of troops in Germany, the UK, and Italy. The existence of NATO means that even if the eurozone and EU were to collapse, any hypothetical march towards war would still have a powerful brake. Potential warring states would have to leave the Western alliance first, or conclude that NATO and the US military presence are meaningless or unreliable. This is certainly possible, given that NATO has been weakened by budget cuts in its member states, but would still require a major political gamble.

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