‘Eurozone on the brink’ screams the latest headline. And indeed, as the Eurozone (EZ) lurches from one crisis to the next, the whole structure seems increasingly imperilled by its lack of political cohesion. British Tories may wring their hands in glee, but the demise of the euro cannot but lead to the unravelling of the whole integration project, with disastrous consequences for a unified approach to jobs, growth and the environment.
Let the same British euro-sceptics reflect on two simple facts: first, there is little respect in Europe for the imperious and arrogant British—the image of Nigel Farage’s antics in the European Parliament are not easily effaced.2 Secondly, as much as Britain may criticise the euro’s construction, our own economy is not exactly thriving. Not only is Britain stagnating, but its social infrastructure is crumbling while its wealth and income inequalities are the largest in the region.
But back to Europe—which uniquely for Brits means ‘continental’ Europe. The single most worrisome manifestation of the EZ’s predicament is the near-total marginalisation of the Commission and the Parliament in the context of the crisis. Instead, it is the national politicians—Merkel, Sakozy et al.—who have made all the running. What could be more indicative of a ‘democratic deficit’ than the fact that Europe’s elected MEPs have become invisible!
There is a paradox here. Europe cannot go back to what it was before the crisis, nor can it tread water. But neither can a large EZ economy run by squabbling small-minded politicians from 17 countries thrive. Even George Osborne admits that full fiscal integration is the way forward—‘un gouvernement économique européen’ to use the jargon.
Such a form of governance would need far more powerful political institutions including quite possibly a directly elected President. Equally, the legitimacy of a far more centralised EZ would depend on its delivering—nay, on being seen to deliver—secure jobs, higher incomes and common social services. Take pensions: although a strengthened EZ cannot take over the entire pension system given current productivity differentials, it could deliver a basic citizen’s pension, a payment which would guarantee a subsistence minimum for all its retired citizens financed by an FTT (Robin Hood tax).
The principle is clear: if the EZ is to prosper politically, it must deliver tangible benefits. The young French and Dutch voters who voted against the Constitutional Treaty in 2005 were not generally anti-European; they merely wanted a more social Europe.
Whatever the free-market fundamentalists may say, greater social cohesion/social justice lies at the very heart of the European project. To deliver a genuinely social Europe, a new social contract is needed. Democratic governance is not about national politicians fighting for their narrow interests by drawing red lines, still less about 17 national Parliaments agreeing to each line of some new regulation. It is about a genuinely European political debate over our common interests. Only when this lesson becomes clear to all can we overcome the sort of gridlock we see today.