Saturday, May 22, 2010

The death and birth of Europe

In a recent column, Gideon Rachman trembled at the prospect -- he did not really indicate how likely a prospect -- of "the death of the European dream":*

It is natural that international attention should focus first on the economics of the crisis in Europe. But there are also broader, if less immediately obvious, political consequences. It is easy to mock the pretensions of the authorities in Brussels. But the fact is that the EU does – or perhaps did – stand for something important on the world stage.

What Europe represents is not so much raw power as the power of an idea – a European dream. For internationalists everywhere, for believers in much deeper co-operation between nations, for those pushing for the establishment of an international legal order, the EU is a beacon of hope.

If the European experiment begins to unravel – after more than 60 years of painstaking advances – then the ideas that Europe represents will also suffer severe damage. Rival ideas – the primacy of power over law, the enduring supremacy of the nation state, authoritarianism – may gain ground instead.

It should be noted that the "European dream" that Rachman semi-eulogizes is not real political union -- a United States of Europe. Rather, he admires the model of increased cooperation among nation-states, a kind of multilateralism-on-one-continent or U.N. of the future. He fears that the current crisis is devaluing the demonstration effect of the model. Beyond that modest correction in intellectual markets is a darker fear, expressed in a prior column (March 2, 2009):
But it is precisely the threat to the EU that has focused my mind. Plans for a political union in Europe were always crazy. But the four freedoms already established by the EU – free movement of goods, people, services and capital – are huge and tangible achievements. It would be terrible to see them rolled back...

If Europe starts rolling back the four freedoms, the implications will stretch well beyond economics. Protectionism and nationalism are close cousins. The principles of consultation, co-operation and open borders within the EU have helped to repress the old, nationalist demons.
It would be fair to ask Rachman, though, just where he sees the end point -- or sweet spot -- of the quasi-union he admires, given the weaknesses of the existing form of monetary union exposed by the current crisis.  In a way I did ask, in the Comment section:

Gideon, should the dream be discredited by a design flaw in the common currency? Many - probably including you - have highlighted the danger of a common currency without a common tax base. Can this crisis not be treated as a reform opportunity rather than as an existential threat? Or is the leadership simply lacking?
The hope expressed there was based on an implicit syllogism: European governments finally ponied up; they will not let the Eurozone crack up; continued union entails tighter political union, i.e. some power of taxation and more control over national governments' fiscal policy.


That assumption could of course be wrong; an alternate scenario is less union, not more, without a total breakup.   But to give it full voice, today comes, in The New York Times, Handelsblatt editor Gabor Steingart -- proclaiming that the current crisis is not a united Europe's death rattle, but rather its birth pangs:

Arguing that "Europe’s movement toward unification has always been the product of crises" -- the world wars, the threat of communism, the reuinification of Germany --, Stengart suggests that the current bailout is the first act of a de facto continental government:
Yet historians will likely look back to May 9 as a turning point. That is when, in a conference room in Brussels, European leaders announced a blanket guarantee of 750 million euros (about $1 trillion) for the countries on the euro zone’s southern flank. Even the European Central Bank, which until then had been regarded as an independent body, silently stepped in to bail out the troubled states. Though they would never admit it, the men and women who sat in Brussels formed the first European economic cabinet, making policy on the fly, just as in a regular state...

at this critical moment, Europe decided that monetary unity was not enough, that it was worth breaking the rules to bring its members closer together as a political unit. From now on, the domestic budgets of northern and southern Europe will be connected, a fact resulting not from a long-term plan but, once again, from crisis.
Steingart adds an obligatory caveat, acknowledging that the idea of fuller political union in Europe has never commanded popular support:

Having forced itself into an era of continental policymaking, Europe must now play catch-up with its democratic system. Millions of Europeans already feel alienated by Brussels; if the achievements of this crisis are to survive, European leaders must figure out how to make sure the people are heard in the political process. Europe as a decision-making body is a fact; now it has to become more democratic.
That's one of those bell-the-cat propositions: how to make it more democratic when the demos don't want it? Steingart is in effect arguing that since events forced the hands first of European governments, public opinion will have to follow suit.

As a footnote, a comment (by "Nora") in response to Rachman's column brought to mind an analogy I'm sure has been made before -- between the EU parliament as currently constructed and the Articles of Confederation in the United States prior to the ratification of the Constitution:
After WW2 Europe had established the “Common Market” and the people of those countries were happy because they saw the benefits. The political elite after the post-war generation however went as far as dreaming up a United States of Europe and started with establishing a common currency, promising a € as strong as the Deutsch Mark used to be. But anybody knows that a European super state requires besides a common currency also a common foreign policy a common budgetary and fiscal policy, etc. etc. It would also be necessary to have a common language if Europeans would really like to compete with the US, China, India, Brazil and so on. France and Britain should have to give up their seats at the UN Security Council for one that represents all of Europe. Of course nothing of this sort is happening or even wanted by the people of Europe because nobody wants to surrender power to a not even democratically elected sort of Government in Brussels. 
The confederation lacked taxing authority and the states were left to handle their own war debts. A superficial analogy, I know. But perhaps worth exploring.

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