As Europe struggles to handle its debt crisis, the euro is in danger, and markets around the world are shaken. With so much uncertain, we at The Daily Reader decided to talk to an expert: Walter Laqueur. In his book The Last Days of Europe: Epitaph for an Old Continent, Laqueur wrote about the cultural and political trends that endanger Europe’s present and future. His new book, After the Fall, on sale in January 2012, will take readers inside the European crisis that he foresaw.

Walter Laqueur was the director of the Institute of Contemporary History in London and the chairman of the International Research Council of CSIS in Washington for 30 years. A professor at Georgetown University and the author of more than twenty-five book, his articles have been published in The New York Times, The Washington Post, and countless other newspapers worldwide.

Five years ago, your book The Last Days of Europe predicted Europe’s decline. Briefly, can you tell us which of your predictions you see coming true in Europe’s current financial crisis, and are there elements that you did not predict, or that surprise you?

Five years ago in The Last Days of Europe I wrote about Europe’s decline. It was not really prediction—many of the trends had already taken place. It was before the economic crisis of 2008. I dealt mainly with long term threats such as demographic developments. At that time it was quite fashionable in the U.S. to think of Europe as the great model to be emulated. Today many believe it was all the fault of the welfare state. Both theories are equally wrong.

I said in my book that the European crisis was a  multiple crisis  with a variety of components—political, social, economic, demographic, etc.  Today the main preoccupation is obviously with the immediate  dangers—that is to say, the economic and financial. As for the long term threats, there is always the hope that they may go away, whereas the immediate dangers—unemployment, banks closing down, etc.—affect everyone here and now. I did not predict the severity of the financial crisis. No one did, except those who always predict disasters ahead. Their predictions are bound to come true from time to time. Some of the commentators wrote at the time that my pessimism was excessive—today they are more pessimistic than I am.

What do you believe to be the most crucial problem Europe must address now?

Not being an economist, how could I dare to comment on an economic crisis?  Because many of the economists were wrong much of the time. Why? Because it was primarily a political, not an economic, crisis. It was based on the idea that one could have a common currency in Europe while the national governments were still deciding what the economic policy should be. This was of course impossible; there had to be a central European instance in charge. The crucial problem facing Europe now is the decision whether to have such a central authority (against which there is strong opposition) or whether each country should act as it sees fit.

This would be the end of the euro; for even if it is saved this time, it will probably not survive the next crisis. On the other hand, if the end of the euro should come soon, this is not necessarily the final act of the European Union.  After a decent interval a new attempt could be made by the Europeans to get their act together. Perhaps there will be, as in some sports, a champions league and one below. Some European countries will belong at least for an interim period to the second league. There is always hope for promotion.

The European Union and the United States are both attempting to respond to economic crises. Do you think there are things the United States could learn from Europe, and vice versa?

There are no specific remedies fitting all countries. Some of the Baltic and Scandinavian countries and the Netherlands were less severely affected by the financial crisis than most others and recovered more quickly. But measures effective in small countries do not necessarily work in bigger economies. In some places the emphasis will have to be on saving, in others on spending.

If you could choose one thing that you most want readers to learn from your new book, After the Fall, what would that be?

I have no panacea to offer how to get out of the present crisis.  I try to describe what happened in Europe and why—but I do not pretend to have answers to all questions. There have been (and still are) a great many misperceptions and I try to get them out of the way. I am pointing to some warnings. But it is always easier to write about the past than about the future.

Besides your own books, can you recommend other books that might help readers understand Europe’s financial situation?

Few authors dare to write about a major crisis while it is still going on. There are many articles but no books that come to mind. As far as the general background is concerned, I recommend two excellent works: Barry Eichengreen’s The European Economy since 1945, and Carmen Reinhart and Kenneth Rogoff’s This Time Is Different: Eight Centuries of Financial Folly. But they deal with general issues, not specifically with the present European crisis.

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