A Broadway musical's lessons for Europe

It has resonance for policymakers, especially technocrats at European Central Bank

If you haven’t already seen the amazing Broadway musical Dear Evan Hansen, you should make plans to do so. The show features superb acting, directing, music, plot, singing and staging — all in service to a story that speaks to us in many ways, and is easy to connect to. It may even have its greatest resonance for policymakers, and especially the dedicated technocrats at the European Central Bank (ECB).  

The plot involves an outsider, who stumbles into a lie that grows bigger and bigger over time and, in the process, drags in more people. The falsehood is substantially fuelled by the comfort and engagement it provides. It transforms society for the better, giving shelter and support to those who are close to the main character, Evan Hansen, or loosely connected to him. The musical is a rich story of community, salvation, hope and mystery, as Evan Hansen goes from being an unknown and ignored outsider to an inspirational leader of a movement.

I am withholding further details to avoid being a spoiler. Suffice to say that the lie of the teenage title character cannot last forever, and when it unravels, the show’s plot takes another brilliant twist as the other main characters realise that their salvation isn’t in the world that Evan Hansen has created for them.

The musical makes audiences laugh and cry, but also reflect on their past, present and future. I found my thoughts wandering to the world of central banking and, in particular, the travails of the ECB.

Like Evan Hansen, the status of the ECB has evolved from relatively unknown outsider to inadvertent leader of a feel-good movement. Because of the actions of the central bank, many in the euro zone have gone from being financially unsettled, if not panicked, to regaining their composure and hope for the future.

Also like Evan Hansen, the ECB stumbled into its role and the power that comes with it, as its influence and involvement grew well beyond anything it had ever imagined. And every time it hoped to disengage, it got pulled in deeper, with an ever bigger community relying on it.

No matter how hard they try — and they have been trying very hard — the committed central bankers at the ECB cannot produce what Europe needs most for durable economic and financial well-being — that is to say, sustainable high and inclusive growth. No matter how much they experiment and how deep they venture into “unconventional policy”, their tools are fundamentally ill-suited for the task. The well-being of Europe depends on the actions of others. As a result, like Evan Hansen, the ECB must often wonder about the risk of a messy unraveling. 

The brilliant ending of the musical is a timely reminder that there are ways to make the unsustainable into the sustainable without bringing down the whole edifice. It is something that can, and should happen, in Europe. But it requires governments to recognise the fragility of the euro zone’s current policy construction, and for them to do a lot more to improve it.

© Bloomberg