Mark Stein, '"Phantasy of Fusion" as a response to trauma: European leaders and the origins of the Eurozone crisis'

In this paper I explore the origins of the Eurozone crisis, a debacle of considerable magnitude that has led to failing economies and mass unemployment in various European countries, as well as threatening the entire European project. No solution has yet been, or is likely to be, found. 

    I argue that the establishment of the Eurozone was an attempt to exorcise a history stained with centuries of conflict and spilt blood, and prevent its repetition by creating a highly problematic single currency union, in defiance of the advice of a wide swathe of prominent economists, central bankers and social scientists. Guided by a ‘phantasy of fusion’, and in the face of clear and stark warnings about the viability of a single currency, it was hoped that the traumatic memories of war – and, by implication, centuries of division and fratricide – would be ‘cured’ by the unification of formerly warring parties. The euro can be seen as a specific type of ‘phantastic object’, invested with ‘latent (unconscious) wishes’ (Tuckett & Taffler, 2008, p. 395). Thus, while a degree of economic and political integration was both important and helpful for post-war Europe, the flight from this traumatic memory inclined European leaders to engage in a highly dangerous degree of integration that has created many more problems than it solved. Using psychoanalytic ideas, in this paper I attempt to shed light on these important issues.