No one in the punditocracy has raised the issue yet, but their are drastic dangers in the collapse of the Eurozone in Europe. The European Union (EU) voted an austerity rescue package for Ireland and Dublin accepted it. It then voted one for Greece, and Athens accepted it, but with the proviso of first holding a referendum on it. Commentators have even come up with an acronym for the danger of a Southern European collapse: PIGS--Portugal, Italy, Greece and Spain. If any of the three other PIGS defaults then Europe will be plunged into a depression, the Euro will collapse, and the effect will likely be felt across the Atlantic in America. Go here for a timeline of the debt crisis as it developed from late 2009 to the present. Go here for an article on the dangers of Italian default on their debt.
This is then the opposite of the Great Depression of the 1930s when the depression began on Wall St. and very quickly moved across the Atlantic to Europe and South Africa. America was providing the financing for the system of revolving finance in which America loaned money to Germany, which then paid that same money to the Allies as reparations for World War I, and then the Allies repaid American war loans. Once America could no longer provide the funding to Germany the system collapsed.
This is then the opposite of the Great Depression of the 1930s when the depression began on Wall St. and very quickly moved across the Atlantic to Europe and South Africa. America was providing the financing for the system of revolving finance in which America loaned money to Germany, which then paid that same money to the Allies as reparations for World War I, and then the Allies repaid American war loans. Once America could no longer provide the funding to Germany the system collapsed.
The best description of the link between politics and economics in the 1930s is The Dark Valley by British historian Piers Brendon. It demonstrates that as the decade began fascism was confined to Italy and Portugal and neither country was doing very well. The Nazi Party was polling under three percent in German elections and France was ruled by the Radicals (a centrist party despite the name). Soon the Nazis began to rise very quickly as most voters abandoned the parties of the center in favor of either the Communists or the Nazis. By the end of January 1933 Hitler was chancellor of Germany; eighteen months later he was a dictator. Fascist paramilitary groups began to dominate the streets of Paris and other French cities until they were finally outlawed following a bloody clash with the police in 1934. The depression led the Japanese army to invade Manchuria in 1931 and then much of the eastern half of China in 1937. The military took over running the government from the civilians during the 1930s. In Eastern Europe traditional dictatorships gradually gave way to fascist parties, which then established their own more radical dictatorships. Fascism then spread to the Arab world--to Egypt and Palestine and then to Syria.
I think that Western Europe is safe from a return of fascism as democracy is well entrenched there after two generations since its introduction following 1945. But east of the Czech Republic and south of Slovenia it is another story. Fascism was introduced in Yugoslavia by Slobadan Milosevic in the late 1980s. Serbia, Macedonia, Bosnia, Kosovo, and even Montenegro and Croatia remain at danger from an economic collapse. In Serbia and Croatia democracy remains weak with ultra-nationalist challengers. In Bosnia politics is dominated by Serb, Croat and Bosniak ethnic nationalist parties. The central government is dysfunctional. In Macedonia there is the danger of demands by the Albanian minority and repression by the Slav majority. Nationalism could return to the Balkans in a big way if there were a Euro collapse. The Bosnian war of 1992-95 led to at least 100,000 deaths and a million refugees leaving the country for Western Europe and the United States. Unlike the Albanians in Kosovo, most never returned.
Central Europe north of the Balkans is safer but there are danger zones there as well. Democracy is probably quite safe in the Czech Republic, Poland, and the Baltic States. But in Slovakia there could be problems as the economy is dependent on heavy industry--military industries were very important in Slovakia. There is a Hungarian minority in Romania; if ill treated by the Romanian majority this could lead to a return of nationalism in Hungary with irredentist claims over Transylvania. Like Dracula in the Hammar films of the 1950s and 1960s, fascism could rise from the dead in Budapest.
These are things that Angela Merkel, the Germans, the Greeks, and the Italians should all think about very hard.
