Too many commentators focus on covering the current European financial problems. Although the deadlocked financial situation of the EU cannot be disregarded one should also pay attention to the political/ideological vacuum of the European Union.
The crisis of Europe is a crisis of values. In the last few years there has been no equivalent of the idealism that cemented the European project back in the 1950s. I am on the side of those who believe that ideas do matter and that the EU cannot simply be run by competent technocrats (no matter how efficient they may be). Technocrats may offer a brain to the EU project (although this is debatable!) but they cannot offer a soul. And it is the soul that is currently lacking in the European project.
A soul searching exercise is thus necessary, but who can carry it out? As former German Councillor Helmut Schmidt claims, Europe lacks leadership. He is more than right. Merkel behaves more like a small Town Mayor whose narrow-mindedness cannot escape the borders of her little constituency rather than a leader of a united Europe. In other member states things are not rosy either: in France, Sarkozy has been weakened by his internal policies and tries to gain political momentum by exercising the populist trick of Roma expulsions; in Italy, Berlusconi does not offer a leadership model (for many good reasons).
A crisis of ideology is also evident in the EU. The uncritical acceptance of a deregulated free-market vision within the EU circles has damaged the economy of the Eurozone and is no longer viable. The EU became a political space where a conservative free-market mentality has gradually taken over without any major thinking and debate. This kind of “acquis” has silently been imposed in every EU policy area by the large majorities of the EU establishment. The “Celtic tiger” economy was fervently promoted by this establishment as an example that all Southern European economies had to follow. Now that Ireland is bankrupt, who will take the blame?
The European Parliament, which was supposed to be the representation instrument of EU citizens, has become the hub of big industry lobbies. In addition, the ideological poverty of social democracy, along with the weakness of any other left-wing force to provide answers to the ongoing EU problems, has deprived the European public of a viable alternative political solution.
The weakness of promoting Europe as an alternative to the nation state has brought a re-nationalisation of mentalities. Populism reigns in every part of Europe paving the way for extreme right wing parties to flourish. There is a great public unease, from egalitarian Sweden all the way down to the metropolitan capital of Catalonia. This unease gives birth to alarming new political movements propagating a discourse of national purity.
The EU problems are also an outcome of the lack of competent mechanisms and strong policies. Although much was expected from the implementation of the Lisbon Treaty, it seems that a strong form of European economic governance is still lacking. Many economists suggested that the Euro should have been the last thing to happen after the successful establishment of a real functioning common EU market. Nevertheless, it is now too late to say what should have been done better in the past. The adoption of the Euro was the first major move toward a common market and European leaders have the responsibility to protect it. Brave decisions need to be taken now. European leaders must surpass the frontiers of their member states in order to promote solutions that will fit a “European” rather than a narrowly defined national interest. It is unlikely that they will be brave enough to do it though.
If European leaders would like to regain some of their lost credibility they must start speaking the language of truth. Rather than explaining the real issues to their publics, politicians tend to demonise certain countries (the so-called PIIGs) in order to justify errors and cover-ups of the past. Loans that will give great returns to the lenders are presented as big favours to the smaller indebted EU countries. Very few EU officials will say that the Euro benefits the stronger EU economies more than anyone else. I will explain it myself: with the adoption of the Euro, devaluation among the Southern countries became impossible. As a result, German products got a comparative advantage over those of the financially weak EU countries who could not devalue their currencies in order to boost their exports. Although Germany is experiencing growth, allowing it to build surpluses, the weaker European economies may end up in a continuous circle of recession by implementing vicious social cuts. The face of dishonesty: EU demands austerity in labour and welfare issues but makes no demand for cuts to arms spending either in Greece or in Portugal which buy many of their weapons from the bigger EU countries.
The semantic poverty of the term “Europe” nowadays is indeed frightening. Under the current crisis, the term “Europe” may end up being an empty shell. Worse than that, as Leigh Phillips mentions in his series of EU Observer articles, the EU may become synonymous with brutal austerity in the minds of its citizens, which gradually may threaten its very own existence.
Pro-Europeanists agonise over the future of the European Union. What can inspire citizens and politicians to continue with the European project? Can there be a new beginning? And if so, how can this happen?
#1 by Maresz on December 19, 2010 - 9:11 pm
OK, so if arms purchases are the problem, why dont they stop without being demanded to do so? dont tell me Greece really needs to fear Turkey to the tune of 4% of GDP? some caution is warrented, but not this…
And if they are unable to compete by simply devaluing (which is anyway unfair to the majority of low and middle class people who dont have foreign (value keeping) assets) then why didnt they try being competitive the traditional way – innovation and industriousness? As a young man who cannot expect much by way of pensions due to sheer demography, raising the retiriment age above 60 doesnt sound like vicious social cuts…. especially when people live beyond 80.
The fact of the matter is this: the euro opens up competition, and in a competition you have to, er, compete to get the goodies. I accept that several factors beyond Ireland’s and Greece’s control pushed them to irresponsibility (mostly cheap money) but it was the irish who screwed up their regulatory environment (allowing a major property bubble to grow to TBTF proportions without the means to actually stop it from failing) and the greeks who screwed up their overall economy (allowing people to earn a nice living without contributing all that much in return.)
In the meanwhile you had the germans accepting pay freezes for long years and the northern europeans investing in information society infrstructure and innovation, not in bricks and mortar infrasrtucture and property.
Still, I agree with your main point that leadership is lacking and because we are all in the same boat, we badly need it.
So how about this: some “burden sharing” is inevitable, so “I will stand in for you but you have to change and i will keep a tab on you”. Would the periphery accept that? WOuld the center want to offer that?
But please stop the “poor periphery the victim of the strong guys” line… Theory of comarative advantage, anyone?
#2 by Javier on December 20, 2010 - 12:11 am
The problem with the EU is that it is made for fat cats only…No matter if you are a Spanish or a German you just have to stick to low wages which is unfair…’burden sharing’ means that the rich have to pay too!
#3 by Freeborn John on December 20, 2010 - 2:11 pm
The EU is not yet broken politically; but is must and will be. It is broken intellectually; not one of its supporters can sustain a coherent argument for it anymore that does not degenerate into borderline Ur-fascism. It is broken economically with the eurozone being the slowest growing region in the developed world since it’s inception. It is broken (by design) democratically and has shed it’s legitimacy. But unfortunatly the zombie project remains in existence politically until Lisbon is repealed.
The decisive task of the Age is to break the EU so hard that supranationalism never rears it’s ugly head in this world again. EU federalists must sought out wherever they nest, relentlessly confronted with the paucity of their arguments, and exposed for the intellectually, economic and political bankrupts they are. the bankruptcy of their arguments, again and again and again until the last federalist is broken.
The future is a global free trade area offering far greater economies of scale than the limited EU market, and a world of democratic nations states that co-operate with one another using the classic and democracy-compatible intergovermental method as used in the rest of the world that is outperforming the supranational eurozone hidebound by the poor quality regulatory detritus that is the unfortunate by-product of Brussels institutional self-aggrandisement. Once the Worldwide Free Trade Area is established the EU institutions became superflous. But they must not be allowed to ‘rot on the vine’. The EU institutions are too damaging to our democracies and their regulatory detritus too damaging to our economies for them to be allowed a slow death. All must be swept away to make room for a Worldwide Free Trade Area designed never to be corrupted with the federalist ambitions to replace our democratic governments.
#4 by David Aldworth on December 20, 2010 - 7:12 pm
Maresz is right, improving competitveness is the answer, so is good governance. Bad governance by the Irish meant that there was no effective regulation of the banks and poor building investment were made, Greece, bad governance means that taxes are not collected, money is spent on things that are not needed, corruption means that money is wasted on contracts. Italy, same issue with taxes and what about all the EU money that goes staright into the hands of the Mafia? Slovenia has been in the Eurozone for practically three years and still seems to be doing quite well. So can we please stop peddling the canard that being able to devalue is a good thing. It is snare and delusion to belive that devuaing the currency is a good thing. If it were, the UK’s econmy would be well ahead of Germany’s.
#5 by Freeborn John on December 20, 2010 - 8:46 pm
David (4): Strange how so many EU supporters live in a world of out of date cliches that bare no resemblance to today’s realities…
UK GDP/person (PPP) $35200
Germany GDP/person (PPP) $34100
Source: CIA World Factbook 2009
#6 by Max on December 20, 2010 - 10:50 pm
All must be swept away to make room for a Worldwide Free Trade Area designed to
That sounds like replacing one evil by another one..
A truly sovereign nation must be free to decide against free trade, after all.
#7 by Maresz on December 20, 2010 - 10:55 pm
John, my problem with your approach is in your last sentence.. “never to be corrupted”….
teh thing is, what you see as corruption, I see as inevitable when group sof people with differetn cultural, economic and social traditions try to weave together a single market in a relatively short while, without external coersion. man is such an animal, you see…
cooperation requires compromises, and compromises can be ugly. and the ugly compriomise is still better than naked coersion…
now dont take me wrong, i think it is useful from time to time to highlight certain ideals and compare what we have achieved… but what you are doing seems to be something else – you are not highlighting ideals, but grasping for naive and unrealistic visions, mirages….
(Or tell me how you would have the US and China not have you (I am assuming here you are from the UK, but it could be any EU MS) for breakfast if you were trying to negotaite your “brave new world” of an “uncorrupted” global free trade area with them…. lol)
#8 by Freeborn John on December 21, 2010 - 12:53 am
Maresz (7): Your knowledge of the ‘difficulty’ of negotiating free trade between the UK and US is as good as David’s (4) on the relative strength of the German & British economies. The UK has an open invitation from the US and could conclude a Free Trade Agreement in a matter of weeks.
http://www.telegraph.co.uk/news/worldnews/europe/1346773/We-back-Britain-joining-Nafta-says-US-senator.html
#9 by Freeborn John on December 21, 2010 - 1:44 pm
Max (6): A global free trade area to replace the EU would not be replacing one evil by another if the successor organisation is designed with no supranational characteristics. i.e. no law-making powers or institutions akin to the EU parliament, no Commision with its obscene monopoly of legislative initiative and no ‘politicians in red robes’ at the ECJ able to reinterpret what the supreme law of the land is without any ability to correct their self-serving rulings.
The lesson from the EU debacle is that nothing more can be tolerated of an international organisation than a simple secretariat to organise very occasional meetings between governments and a court of arbitration to settle disputes. Give them an inch more and they will take a mile. So the global successor organisation must be designed with a failsafe democracy lock so that they never can take even that first inch.
#10 by Maresz on December 21, 2010 - 5:29 pm
john, i cannot tell whether your comment is sad or ridicolous… probably both…. or you’re just joking…
the guy (who gave this “open invitation” 10 years ago) is not in the senate since 8 years ago…. they talk of Bush as “prospective republican presidential candiate” in the article… back then at the final moments of pax americana, the world was still before the full dot com crash, 9/11, rise of china, latest global financial crisis… did you really mean that seriously? and do you really seriously believe your last sentence?…. wow
(oh and please dont jump to conclusions about my knowledge of international trade without knowing too much about me and when you 1. seem to misinterpret what David wrote 2. use funny, naive “statistical” comparison to disprove a poitn he never seems to have made…)
#11 by french derek on December 21, 2010 - 7:12 pm
Hi, FBJ. First, tell me where, ever, there has been “free” trade between countries. You quote NAFTA: but who really calls the tune there? The US hand out farming and industrial subsidies whilst taking action against others who do anything similar. This is the same US who proclaim “free trade”.
Second, please explain what you mean by “supranationalism”. Individual nation states entered the EU (as it now is) freely and are, still, charged with its overall direction. (Though I agree with Dr Magaras on the EU’s lack of leadership). If you want to break EU “supranationalism” my view is that we will see in its place a rise of petty right-wing nationalism. It was to get away from petty nationalism that the EU was created.
I believe that the EU expanded too quickly, without any strategic view of where this should lead. Where it has led is to a state where too many leaders hold to their national agenda, rather than a genuinely EU one. My view from France is that any politician with a genuine EU-wide vision has been – and will be- prevented from getting anywhere near EU power. The national leaders don’t want that – for evidence, ask why Barroso was reappointed.
#12 by Freeborn John on December 22, 2010 - 12:48 pm
Maresz (10): The symbolic motion in the US Senate to invite the UK to join Nafta was some time ago, but there is not a shadow of doubt that the USA and UK could rapidly conclude a Free Trade Agreement at any time under any administration in London or Washington. The only obsticle is UK membership of the EU which prevents the UK agreeing trade agreements, this currently being an exclusive power of Brussels.
The USA has concluded multiple FTAs with countries from Mexico to the Middle East to Australia. You claim this to be impossible but that is based on a mercantilist mentality known since Adam Smith to be intellectually bankrupincAince free trade is a mutual win-win for all parties irrespective of size, it is clearly in the interests of the USA, China and all countries to progress towards a global free trade area. The only uniquely European advantage would be that in rendering the EU common market obsolete, the opportunity then also exists to address the problem of the political powers that have been usurped by the supranational institutions in Brussels and restore these political powers to their true owners; the nations of Europe and the representative institutions of the nation-state.
French Derek: Democracy is the answer to the aggressive nationalisms of the past, and the EU is the greatest danger to democracy that exists in Europe today. Democracy requires liberal nationalism because representative government requires that there be a people to represent and the EU does bit have one. Europe is a geographical term only. There are no shared values by countries on the European continent which are not also Western values shared by many non-European countries. Therefore there is no genuine EU interest, only an institutional self-interest of beurocrats in increasing their own power and perks at the expense of the voters which weakens democracy towards vanishing point. The EU is steadily recreating the undemocratic political environment that was the root-cause of past wars, but this time on a Continental scale.
Just as WW2 would have been less serious had Hitler only been leader of Bavaria, future conflicts would be far worse if EU integration modelled on the formation of the German state is allowed to lead to EU defence and foreign policies that no voter has any hope of influencing. Sustainable peace therefore depends on liberal nationalism and the destruction of the undemocratic supranationalist EU.
#13 by Jeffrey Siger on December 25, 2010 - 3:37 pm
Vasili,
First things first. Kala Kristouyenna (it being December 25th I’m sure no translation will be necessary for other readers to whom I extend the same wish:)).
I was blown away by your piece. Terrific job and grasp of the issues, at least in my mind.
As you may know, I spent the summer working on my fourth book (the one that will come out in January 2012, not PREY ON PATMOS, An Aegean Prophecy which will be released next week). I spent a year talking with ambassadorial level folk and simple citizens of the E.U. looking for the best way to explain through a fast paced mystery what I saw as perhaps the most significant problem confronting all of the E.U. and not just our beloved Greece.
I found an answer that brought together all the elements I needed. When I read your piece what I wondered was how you somehow got your hands on my manuscript:) Three sentences in particular gave me chills for they spell out what I, too, believe portends the fate of the E.U.
“This unease gives birth to alarming new political movements propagating a discourse of national purity…Brave decisions need to be taken now. European leaders must surpass the frontiers of their member states in order to promote solutions that will fit a “European” rather than a narrowly defined national interest.”
Your words should be carved in stone at the very heart of Brussels.
Let us hope in this season of good will toward all, that hearts will open and events will change. Some might say that even though I was once a Wall Street lawyer, to say think that I must still believe in Santa Claus. But that’s another subject for another time.
Great work, Vasili. Xronia Pola!
Jeff
#14 by Greek taxpayer on December 25, 2010 - 5:00 pm
Vasilis writes “If European leaders would like to regain some of their lost credibility they must start speaking the language of truth.” Then he peddles the biggest misrepresentation and distortion there is – that “rich” (i.e. economically efficient) European countries are somehow responsible for the current crisis because they will get high returns from countries like Greece or Ireland, to which they are currently lending hundreds of billions or euros. This distortion in fact covers up the real reason why we are in the mess we are in today. The truth, Vasilis, is that Greece at any rate is in the current situation it is in because of decades of waste, mismanagement and the ignorant notion that the EU will just keep pumping millions and millions into the country so we can carry on doing whatever we want. The other truth is that if there is to be a genuine fiscal union in the eurozone, as Vasilis seems to be proposing, then Greece would never have been allowed into the eurozone in the first place. Greece’s budgets would never have been permitted to be as wasteful as they are. The public sector would be slashed and civil servants only employed because of their abilities not because of their political connections. The unions would not be permitted to control (and destroy) as much of the country’s productive resources. The economy would have to be completely restructured. The employment laws be totally transformed and rubbish such as “collective bargaining” be dumped. All the regulations that strangle business activity be dumped. If there was to be a true fiscal union and a truly united Europe to emerge, Greece would have to abandon its garbage practices and mentality that have destroyed all economic creativity in the country. Greece would have to properly fulfil conditions and make the necessary changes. It is Greece’s refusal to have done so that is dragging Europe down today, not Ms Merkel.
If people are honestly interested in understanding why Greece is in the mess it is today, just read the writings of Greek “intellectuals” such as Vasilis. When such minds are meant to be the brightest the country produces, no wonder the country almost collapsed until the “rich” EU countries came along to bail it out. Vasilis points to the adoption of the euro as the cause of Greece’s problems because the country could not then devalue its currency. You know what? Greece didn’t have to join the euro and everyone else today wishes that Greece hadn’t. But the country was so desperate to join, it lied then about its true financial situation, just as it lied about its true deficit over the past few years.
#15 by Enno on December 25, 2010 - 7:59 pm
I also enjoyed the piece which really confronts the issues that the EU has to deal with. I am also a pro-European myself and I think that the EU should change in a radical manner.
#16 by Marcel on December 26, 2010 - 5:48 pm
I didn’t know the EU was a free market. In fact, it is nothing of the kind, it is a customs union designed to shield French farmers from competition from ‘abroad’.
Vasilis is the umpteenth elitist whose only solution he’ll ever contemplate is ‘more EU’. Never mind what the people want, screw the people, the elitists must push their Orwellian utopia at any price. And how dare the Germans say they will not sign a blank cheque for Brussels (read: Paris) to profit from.
I am pro-European too, and thus rabidly anti-EU. I see the EU as the ‘heir’ to the Congress of Vienna and want nothing to do with it. The sooner it and the Euro are disbanded, the better it is for Europe. We the dutch are sick of seeing our money disappear to other countries. No more.
The EU has given rise to an alarming political elitist movement propagating the destruction of parliamentary democracy and its replacement by mutually appointed elitist rule via Brussels.
Listen up mr elitist, we the peoples in majority do not want your political union, or monetary union. Because centralization is NOT a good thing, just check history. The 20th century is riddled with bodies because political systems refused to stick to within their own borders. Nazi Germany crossed its borders, the Soviets did, and the EU also.
And the blame of the ‘rise of nationalism’ I can squarely place at the feet of the EU which for decades has arrogantly refused to listen and has made it very clear that NO MATTER HOW WE THE PEOPLE VOTE it will continue to integrate integrate etc… against our wishes.
EU: the people say no, the elites say yes. Those elites must be replaced or hounded out of office.
I’ll take referendums on that, and the EU elites wont. Guess why.
#17 by Alan on December 31, 2010 - 6:59 am
No, the EU is no free market. It says it right in the Treaty of Lisbon that it’s a “social market economy”. That bespeaks the German origin of the EU, and German control, which was once covert but is now becoming ever more overt.
The EU’s government is the same kind of mockery of parliamentary democracy that was organized in the Soviet Union and continues in other communist countries (especially the People’s Republic of China). Appointed politicians both write the laws and pass them (European Commission is equivalent to the Politburo; no separation of powers exist); elected politicians act as rubber stamp (European Parliament is equivalent to Supreme Soviet/National People’s Congress). Rights are granted at the discretion of such a government and can be taken away at the government’s whim (reading the text of the Charter of Fundamental Rights will bear this out); also, decrees out of Brussels have destroyed freedom (the European Arrest Warrant, trials in absence have destroyed habeas corpus; the Working Time Directive is a re-working of the Soviet “guarantee” of a 41-hour work-week; “hate-crime” legislation creates laws that regulate thought rather than action; and if this isn’t enough, the Stockholm Programme lays the framework for a EU-wide surveillance state).
The EU, if it has equivalence to the Council of Vienna, is therefore linked to the old notion of the Holy Roman Empire (First Reich) even more, since that latter body resulted in the Second Reich. Otto von Habsburg certainly mentioned in 1991 that the “heritage of the Holy Roman Empire” is endemic to the EU. The elites, however, are counting upon the apathy of the people, and perhaps even more upon Hermann Goering’s assessment of how “the people” react to a crisis…(and speaking of today’s financial crisis, Romano Prodi mentioned back in 2002 that such a crisis was welcome in Brussels since it would lead to more centralization of power).
#18 by Cityclicker on January 2, 2011 - 3:28 am
The truth is that there are some distinct troubled countries in europe. There is the competently managed economies which is the majority of the 27 nation states of the eu.
there is Greece which has been appallingly mismanaged for the last 60 years, particularly after 1975. Where the government was not running any sort of prudent policy by having a low state debt like Slovakia for example.
And finally there are the optimistic anglo-saxons and wannabes (Ireland, Spain, UK). All of these had reckless private lending and real estate booms that were unsustainable.
Greece cannot blame Merkel for its horrible mismanagement of the greek economy that led to massive interest payments absorbing a big chunk of taxes, and now the bankruptcy that is coming.
Merkel is not queen of europe and she has to balance the interests of the german taxpayer and the future of europe.
As i am greek myself i can see that none of these points is accepted in greece and the establishment seeks to pretend that they have not wasted funds, local and european in their corruption.
Corruption and debt accumulation has consequences, bankruptcy and perhaps being kicked out of europe is one of them…