A Widening Split in the European Union

Despite its complexity, the European sovereign debt crisis stems from a singular event: the formation of the currency union. As the crisis worsens and existing EU mechanisms meant to stem the crisis fail, solutions increasingly will focus on tightening the eurozone. This will alienate the 10 EU member states that have not adopted the euro. 

Such an arrangement would yield differing results among the 10 EU states outside the eurozone. Countries with strong economies could benefit from dissociation with the eurozone, but countries still highly dependent on EU financial assistance could falter economically. Importantly, a widening rift between the eurozone and the wider European Union would also validate security concerns long harbored by Eastern European and Nordic states.

The financial crisis will slowly drive apart the constituent members of the European Union and the eurozone. Several European countries already are forming regional subgroups based on corresponding economic, political and security concerns. As these groupings form and solidify, they will mark the first appreciable structural change in the European Union.