The sudden spike in oil prices and the sudden drop that followed provoked a downward spiral of the euro. (Some 90 percent of Europe's soaring oil imports come from the Middle East.) The euro planners hoped it would become the equal of the dollar and create a basis for a firm all-Europe state. Instead the euro is fizzling and the hopes for a strong European Union are fading as well. Franz Schurmann, emeritus professor at UC Berkeley, started predicting the decline of the Euro in his Prediction #16 of June 8, 1999 in Jinn Magazine.

"When oil prices recently started soaring, the euro started tumbling. And when oil prices suddenly turned downward, the euro still continued to fall. Why, what is the connection?

The answers can be found in the chaotic protests over gasoline prices that have now spread over much of Europe. These angry protests show that the so-called Europeans have lost whatever faith they still had in the European Union (EU). And the focus on gasoline shows that while Europe gets over 90 percent of its oil from the Middle East, its power and influence in that region is very close to zero.

From the time of Caesar's conquests the Europeans never have been durably unified. They weren't unified under the Roman Empire because the Germans refused to join. Charlemagne unified them in 800, but only 14 years later his Europe fell apart. Charles V unified Europe for 35 years in the 1500s, Napoleon for 10 in the early 1800s, and Hitler for five in the early 1940s .

The current protesters send a curt message to their political elite: "You've botched it again. "If this is the beginning of the end of the latest attempt to unify Europe, it will have lasted less than 50 years.

Members of the European Central Bank (ECB) commonly explain that the euro's fall is due to the "super-performance" of the American economy. Years ago, when the euro was in the planning stage, the French and Germans had visions of a common currency that equaled the dollar. Now it has even sunk vis-a-vis the mighty Japanese yen.

Observers who look at the larger picture believe the real reason is that a "political Europe hardly exists." A strong currency requires a strong state, an un-wobbling pivot on which all other institutions can confidently move. But there is no overarching state in the EU. Instead there is a fragmented European state and two Europes.

The state consists of a bureaucracy in Brussels, a parliament in Strasbourg and the ECB in Frankfurt. One of the Europes is the 11 countries of the "Euro-group" -- those now participating in the euro experiment. The other Europe is the 15 countries that form the EU and elect delegates to the European Parliament.

At the conference in Luxembourg that set the stage for putting the euro into circulation, both the British and the French were unwilling to surrender power to a European superstate. Since that time it has been clear the EU would never have a strong state.

Hard currencies are only hard because people trust them. The Deutschmark is the most trusted of European currencies, and the hope was that the mark would be the rising tide that lifts all EU currencies. Instead the sick euro has dragged down the mark, and maybe Europe as well.

Unified or not, Europe's fate is tied to the Middle East. Most of the 250 million old-stock West Europeans never had it so good. Income and benefits are high. Almost everyone has a car. Health care is comprehensive and education inexpensive. And most enjoy lengthy vacations spent in a lot of traveling. All these advantages, directly or indirectly, come from oil.

Europeans have long paid nearly four times what Americans pay for a gallon of gasoline. In Britain, some 76 percent of the pump price goes for taxes. Comparable ratios exist throughout the EU. When oil prices spiked upwards the national governments refused to cut taxes. How could they without inflicting dire pain on the same people protesting the soaring oil prices?

When oil prices were low during much of the '90s it was the oil exporters who got meager returns. Consumers in Europe reveled because pump prices were low, and governments reveled because more gasoline bought meant higher tax revenues. And more benefits meant votes for the governments in power that accomplished these miracles.

In this millennium year OPEC (especially Saudi Arabia and Iran--they now work closely together) has regained much of its lost power. The big losers are the Europeans. At this point the "Europeans" have much more to worry about than Europe or the euro.