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The year 2011 was dominated by discussions at every given level regarding the systemic crisis of the euro, in any of its manifestations, either that be the depression in Greece, the bailout programmes in Portugal and Ireland, the increasing stress on Italy and Spain and ultimately the borrowing and lending capacities of the core Eurozone economies, with France being threatened by a credit rating downgrade that would reverberate on all funds and programmes that are largely based on its excellent credit rating. As far as the economic side of the crisis is concerned, two are the areas where the negative dynamics evolve: (i) sovereign debt crisis that is most evident in the periphery, yet the European core is also affected, (ii) banking sector crisis as massive capital gaps prevent the healthy functioning of the system, consequently retarding growth. These two are interconnected as the debt of sovereigns is mostly held by private European banks, who themselves were bailed out by those states in the first place when the shock waves coming from Wall Street first hit Europe. Had the crisis been all about this self-fulfilling cycle between stressed sovereigns and hardly-pressed banks, the crisis could have been solved (temporarily) with greater ease. An overarching political issue is what makes the situation in Europe so complex and so hard to solve. It is the manner in which European integration was realized over the decades and the diversity of political cultures across Europe, that do not allow for flexible, systematic and consistent responses to the mounting pressures on the Euro architecture. Three are the dimensions to this political crisis of the EU: cultural, political, structural.
Europe is characterized by rich cultural diversity. What we tend to call as the “European civilization” is in truth only a fraction of what civilization in Europe is all about. There are commonalities between all European cultures such as the Ancient Greek civilization that later on heavily influenced (among others) Renaissance, Enlightenment and Romanticism movements. Or Roman Law that has become a standard in the structuring of state for centuries now. Democracy, in its modern form, is also part of the commonalities Europeans share and many other issues related to literature, music, languages and anything else that exists in human societies. All these have provided a fertile common ground to set up and progress a closer economic and political union, the European Union. Yet despite all the commonalities that Europeans share, they are characterized by vast differences in political culture, in social stratification, economic development and so on. These have been brought to the surface because of the crisis and have been magnified ever since. We have seen for instance the adoption of completely groundless stereotypes against the people of the European periphery -those “lazy PIIGS”. We have witnessed equally preposterous manifestations of nearly-racist stereotypes by Southern European people, who try to relate certain Northern countries to memories of the past. Extremes always exist, yet in times of crises, minorities in terms of percentages gain a disproportionately loud voice in political debate, effectively dictating the talk of bigger parties in the political spectrum. Governors and the main opposition in many countries even thought they may never adopt such extreme views, are confined within a stricter framework as centrifugal forces are increasing within their own parties. In short what is normally considered as a politically acceptable frame, shrinks considerably, reducing the number of feasible options on the table.
The political dimension of this issue has to do with the political systems in different countries. Many governments in Europe are made up of coalitions between at least two parties. From the outset this is not a stable system in times were alternatives are scarce, since conflicts of interest between the different parties naturally emerge, eventually making the available options even more rigid. In addition negotiations become time consuming. Had this been the whole picture, one could suggest that the extraordinary conditions we are dealing with, would force politicians to act faster and with a more compromising spirit, thus reducing the required time. However, in Europe the rigidity in decision making is not only confined to the national level of party politics. It is also much more apparent at the supranational level were 27 states, each of whom participates at the EU on various levels and spheres, meet with each other to reach agreements on highly controversial issues. Additionally the institutional structure of the EU, which is unfortunately characterized by bureaucracy and cumbersome decision-making processes only compounds the problem, again making flexibility in policy decisions a luxury.
The structural side of the matter, has to do with the way European integration took place all these decades. At the beginning the goal was crystal clear between the six founding nations of the European Economic Community, yet as time passed, as countries started to integrate and as new members were added in, the goals seemed to change and the layers of reality, the points of perspective, multiplied. The EEC was transformed from an economic community, into the EU, an entity that had the long-term ambition of becoming a political entity, were issues of high politics such as foregin policy and security would be fully integrated. To proceed with the materialization of that objective, the architects of the EU thought it prudent to opt for using further economic integration to achieve their political ends. Thus came the euro. A project whose purpose was to enhance economic activity between its members by establishing a single currency that would substitute not just the national currencies, but mostly the national monetary policies, that were transfered to the supranational institution of the European Central Bank. Clinging on to the gradualism of their predecessors, whereby incomplete projects were completed as time progressed, the creators of the Euro (and the EU) thought it unnecessary to produce a solid institutional framework to proceed, instead agreeing on a flawed architecture that was not institutionally prepared to function neither as a single currency area, nor as the first stage of a political union.The gaps in the architecture of Maastricht (the Treaty that founded the EU and the birth certificate of the Euro) were seen as minor issues in the grand scheme, as no one from the ruling elite, ever believed that something could go wrong in the process, just like the builders of the Titanic, never thought their ship could sink from crashing onto an iceberg. Alas an iceberg in the form of an unprecedented economic crisis was in Europe’s way and the eventual crash was at full speed.
All these three issues can lead to the following useful conclusions or at least to some suggestions for further thought, to those who still care about politics and daily life in Europe.
First to bring diverse nations under a single umbrella one needs to identify the common ground. Those who initiated the European integration process thought that was found primarily in common economic interest. In our modern era, this is not a strong bond nonetheless since countries in a globalized system can easily find perfectly aligned economic interests even if they come from totally different continents and/or cultural backgrounds. Europeans need to identify and project their common cultural characteristics, by enhancing European citizenship, by increasing democracy and transparency, by exploiting the new media and technology to make Europeans interact and participate together.
Second party politics need to be weakened and this can only be done by diversifying power from the state level to the municipal/local level. This implies less power to the central government, less intervention by detached-from-locality bureaucrats, more power to the individual citizen both in terms of economic activity and political choices and his/her ability to better check those who are in power. Power must not move upwards, but all the way downwards to the lowest possible level and this must be done in practice, not in theory under derisory legalistic terms such as “subsidiarity” (yes in Europe we also know how to present something as good when it actually isn’t)
Third and final point, is that integration should not be a goal in itself. It should be seen as the end result of Europeans working and acting together, exchanging views, sharing experiences and constructing new worlds. Integration can only be successful in the long run if it is left to a grassroots movement, not a centralized, paternalistic mega-plan, whose ambitions do not correspond to the situation in the real world. Europe was and is not yet prepared for a political union. There can be no fiscal union without a common electorate. There can be no common electorate without democratic institutions at an EU level. A common European identity will never be produced out of the lengthy treaties that are filled with a terminology that few comprehend. A European people if it will ever exist will not come out of the stratagems of a collective of politicians making decisions under stressful conditions (the rigidities of the crisis). To move on to the future the EU needs to revise the approach it has towards its people and towards it future. In the long run all that will matter to Europe is how the political issue will be addressed and defined. Not how the economic issues will be dealt with.