Where is the crisis leading Europe?:

Article updated 2 January 2012


The intensification of the debt crisis challenges the EU as never before, particularly the Eurozone. In order to take ride of this, there is a strong call for common “governance” in the EU, strengthening the economic chapter of the Economic and Monetary Union. In this framework, the budget of the EU for 2012 and the Multiannual Financial Framework 2014-2020 have being discussed under a strong pressure by the markets and the division between some Member States, asking for a similar level of financing as in the current financial period. On 19th November, after 19 days of conciliation, the Council and the Parliament agreed the Budget for 2012, in order to be submitted to the Council and the Parliament for formal approval.


According to Jean-Luc Sauron, author of “Is Europe still a good idea?”, the only chance for the EU is a “Schengen area for the Euro”, involving a very advanced approximation in the monetary, budgetary and financial spheres. He speaks about a core group of probably five states (Germany, France and the Benelux) that would constitute a federal state in the EU. Over the long term, this embryo would take in other states, giving rise to a federal EU. There is a historical responsibility to face federalism. Otherwise, the EU is on the way to implosion. Another problem is that most European leaders are locked into the logic of national Election. From the EU institutional point of view, Sauron considers that the Commission cannot be given political power, and the Council is an aberration of the existing European construction. Only the Euro-enthusiast group in the European Parliament is capable to understand the need to start something that it is not an end in itself but a solution to survive these hard times. The only way to combine democracy and efficiency is to set up a federal system in which the national states handle national problems and defend their positions within a federal state that it is in charge of the collectivity, a European government accountable only to the European Parliament.


In any case, the Euro is resisting this long crisis of sovereign debts despite politicians’ and economist’ fears. We have been several times on the brink of ruin in 2011, with great alarms, great expectations and, finally, great disappointments. What it does not seem to resist is the Union, at least how we knew it since the accession of the UK. The Financial Times has pointed out that the EU is not a union of stability and growth, but of instability and stagnation instead. 2011 has shown the Union (and its members) up in front of the international community. At the time of defining a common foreign policy, the Arab spring in Tunis showed France up, ready to send equipments to the dictator’s riot police, and the war in Lybia did it with Germany, clearly discordant with France, the UK and the US.


Lluis Bassets, deputy director of El País is of the opinion (El País, 31st December) that, as serious as this monetary and foreign policy divergences, are those “eroding the four freedoms of the 1986’s Single Act (movement of persons, goods, capitals and services): Schengen was restricted after the revolutions in Northern Africa, Denmark re-established border controls (fortunately the new government has cancelled this measure), Germany banned Spanish vegetables without proper justification. Any excuse seems to be appropriate to feed xenophobia and populism to the detriment not only of the single market, but also of European values”.


A paradigmatic case of anti-European drift comes from Hungary, follows Bassets, “where the party Fidesz uses its overwhelming majority to subject the rule of law to an untenable contortion, which is already considered as a coup d’état in slow motion. In fact, Hungary would not be eligible in the current moment to join the Union under the following three Copenhagen criteria: alignment with the acquis, human rights and market economy. On the other hand, Geo-economy is back, and European most powerful countries are more interested in their relationship with China and Russia, avoiding their EU commitments. Furthermore, several governments have fallen like skittles at bowling. In some cases after elections, usually early like in Spain. In other cases, after political crises, like in Greece and Italy. The Union itself, with more meetings than ever, is under a big question mark, with measures that are very difficult to explain to citizens, and with brand-new posts whose functionality and performance are very doubtful. What citizens do understand is about cuts in services, the reduction of the Welfare State. This is the victory of economy over politics, of financiers over elected politicians. We face an enormous European mutation, with a redistribution of powers within the EU, between institutions, between the States and within the institutions and the States. The Commission’s right of initiative seems to have been liquidated and the leadership lies in the hands of the States (the Summits).The Central European Bank is also changing, doing things that never did before, like buying national bonds or lending money to banks. The Euro also changes: a former triumphant and stable currency for ten years is now a symbol of instability and crisis. And changes will last: joining the single currency will be harder and candidates will think twice before asking for it. At the end, one can see a complex and painful system to take decisions and correct mistakes amongst the 17 members of the Euro-zone. Let’s wait and see if all of them approve the fiscal union, and let’s see if this works well! However, there seems to be a clear consensus on the shortcoming of the European economic governance: there is no demos behind, a European people able to debate and validate these decisions. The traditional democratic deficit of European institutions is now concentrated in the Euro and the correlate of the fiscal union, a taxation union that necessarily refers to the motto in the origin of the American Revolution: ‘no taxes without representation’. The EU does not stand up as we have known it, even if the Euro does. Will we (the Europeans) be able to stand up?”, concludes Bassets.


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