What could “megaprojects” have taught us about the EU and the euro?
Sir, Tim Harford, with the help of Bent Flyvbjerg, “perhaps the world’s leading authority on ‘megaprojects’”, analyzes Brexit “What megaprojects can teach us about Brexit” October 26.
It is a useful exercise though I keep on being surprised by how little attention is given to other closely related megaprojects such as that of the European Union and the euro.
A complete Brexit project should analyze the costs for Britain of EU not solving the much-ignored challenges the euro poses to EU, as these could be huge. Anyone proposing a Remain, should at least try to get a clear answer from EU on what it intends to do to make absolutely certain the euro will not bring EU down, or if that happens that at least non-euro members are not called to share in its costs.
I have no idea if the EU/euro project was “prepared thoroughly”, without “well-known cognitive biases”, or if it was carried out by “an experienced team”.
But when it comes to “try to break a large project into smaller, standalone chunks, so that the failure of one is not a failure of everything” clearly that’s not the case here, since the failure of the euro could quite likely bring the EU down.
The “everyone having an incentive to make things move smoothly” is doubtful too. Surplus countries find it easier to live with a euro weakened by deficit countries, though that does not work the other way round.
With respect to having an early warning system, so problems can be spotted and fixed before they grow, I seriously doubt it exists. Especially since EU authorities seriously compounded any euro challenges with statist “Sovereign Debt Privileges”, that which assigns a 0%capital requirements for banks when holding eurozone’ sovereign debts denominated in euros... a currency that in most generous terms could qualify as quasi domestic.
@PerKurowski
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