ABSTRACT
The euro is reeling, and with it the future of the European integration project.
Governments in Europe seem unable to deal with the sovereign debt crisis, and as a
result of this political paralysis matters are going from bad to worse, endangering
the survival of the project that took off shortly after World War II with the plans to
create a European Coal and Steel Community (ECSC). What has happened?
In most accounts of the crisis, and in particular in the popular press, the communis opinio is that the crisis has its origins in the financial sector, and that it threatens to spill over into the ‘real’ economy. This view represents a profound misunderstand-
ing of the nature of the current crisis. In the second section, this article will argue
that it is a lingering problem of overaccumulation of capital in the developed
capitalist economies that has produced the successive bursts of speculative,
finance-based, growth that have all ended in busts. The relative absence of profit-
able investment outlets in the ‘real’ economy (i.e. in the production and distribu-
tion of goods and services that would satisfy the demands of human beings with
sufficient income to afford these goods and services) explains the flight of capital
into speculative enterprises (summarised with the term ‘financialisation’).
