Before the euro, the USSR was the largest economic union in European history. The Estonian press makes a fascinating comparison.

Soviet disintegration was perceived as unthinkable in 1985 and declared to have been inevitable in 1995. This leap from the ‘unthinkable’ to the ‘inevitable’ makes it a useful footnote to the current discussions on the future of Europe.

A summary of the key points:

  1. The Soviet collapse teaches us that just because the economic costs of disintegration would be very high, this is not a reason for it not to happen.
  2. The perception that disintegration is ‘unthinkable’ could encourage policy makers to try to push dangerous policies under the assumption that ‘nothing really bad can happen’ in the long term.
  3. The Soviet experience is also a powerful demonstration that even more than the lack of reform, misguided reforms can lead to disintegration.
  4. The major risk to a project is not destabilisation on the periphery, but revolt in the centre.
  5. The current strategy of European policy makers – of favouring policies that make the price of exit unbearably high – can end up increasing rather than limiting the risk of disintegration. The Soviet collapse teaches us that in times of major crisis, the popular response to ‘there is no alternative’ is that any alternative is better.