Published in Business Spectator (Melbourne), 23 February 2012
http://www.businessspectator.com.au/bs.nsf/Article/eurozone-debt-crisis-euro-greece-germany-ECB-EU-pd20120222-RQ4FA?OpenDocument
The current crisis of Europe has no lack of material tragedies and personal hardship. The periphery economies are in a sharp tailspin, driving thousands of companies out of business. An entire generation of young and educated people in southern Europe cannot find jobs. And for those lucky to remain employed, life is becoming unaffordable because of falling wages and rising prices.
Beyond these visible effects, the fiscal and monetary crisis is causing severe collateral damage to the philosophical constitution of Europe. This is jeopardising the political and economic recovery.
It was always naïve to overlook the reality of national interests and political power plays in EU policymaking. But European politicians at least supplemented realpolitik with more ambitious and idealistic goals. Democracy, freedom of movement, free trade, the rule of law, international understanding, economic stability, and sound money – such were the values European politicians wished to associate with their grand European project.
But now, all these values – the EU superstructure, to use a Marxian term – have been damaged in the current crisis. Worse than that, the crisis has revealed decades of solemn declarations on “European values” to be mere lip service. When push comes to shove, charity still begins at home.
None of this will surprise lifelong EU sceptics, who have always insisted that a demos, a people, is necessary for democracy to work. In fact, it requires all the elements that constitute a liberal democracy in a nation-state: a public opinion expressed and developed by a free press; a shared sense of purpose and values; a joint awareness of a common history; and a collective understanding and acceptance of the law.
Demos means more than just a random group of people living in a defined territory. It refers to a community that gathers behind these fundamentals of a free public order.
In Europe, such a demos had never developed out of the continent’s multiplicity of demoi. As a result, what is left of European democracy is just the krátos, the power. But power which is not based on shared values is inherently dangerous. “Justice being taken away, then, what are kingdoms but great robberies?” St Augustine asked in the fifth century. His question applies directly to the current state of the European Union.
The economic crisis, a combination of transgressions against EU treaty law and violations of basic democratic principles, has steadily eroded the legal and political foundations of the European Union, and threatens Europe’s future as a place of peaceful and mutually beneficial cooperation. Tensions building up between so-called “EU partners” can no longer be overlooked.
Until this crisis, Europe was functioning on the back of a firm framework of commitments of mutual non-interference in domestic affairs. There were safeguards against fiscal recklessness in other countries via the non-bailout clause in the Stability and Growth Pact. Plus, Europe maintained the fiction that the European Union was a community of equals peacefully working together for a common good.
What we are seeing now is the precise opposite. Non-interference has given way to direct cross-border involvement. In its rather harmless form, it shows in German Chancellor Angela Merkel openly campaigning for the re-election of French President Nicolas Sarkozy, violating all international etiquette and practice. In its more sinister form, non-interference has been replaced by removing elected governments in Italy and Greece and replacing them with internationally appointed caretakers.
European treaty law is no longer sacred, either. The rule of law has been substituted by a “whatever it takes” attitude. Thus, national governments can provide direct financial assistance to other national governments despite the non-bailout clause. The European Central Bank can covertly cover fiscal deficits to help over-indebted governments by direct bond buying or channelling funds through the banks. And in a procedure of dubious legality, institutions such as the European Court of Justice, which belong to the whole European Union, are being used by only a subset of member states.
Worse than these violations of the spirit, if not always the letter, of the laws is the disappearance of the greatest achievement of the European Union. At its heart, the European project was about opening up borders between nations to let people, capital, goods and services flow freely. Where once there were customs officials, turnpikes, and visa and work permits, the European Union had created a common market and a joint EU citizenship. There may not have been much of a European democracy, but there certainly was the promise of a European market.
With growing tensions between EU members these achievements may soon be lost. In the Netherlands, right-wing politician Geert Wilders recently started a website on which Dutch citizens can register their anger about Eastern Europeans living in the Netherlands or “stealing” Dutch jobs. Greeks are burning German flags in the streets as a response to disparaging remarks by German Finance Minister Wolfgang Schäuble. In France, Sarkozy is openly using nationalistic slogans for his re-election campaign.
These incidents are slowly corroding the once celebrated idea of an open Europe. The European project of krátos without a demos has been discredited in the eyes of many Europeans. Their revolt against this political failure at the European level leads straight to the spread of new nationalism and radicalism.
One need not be the European Union’s greatest fan to be worried by these developments. Yes, Brussels has all too often been a largely undemocratic, elite-driven, technocratic and bureaucratic monster. True, the experiment of a common currency for the continent has failed spectacularly.
But make no mistake: As the old European Union crumbles under the current crisis and its own contradictions, there is no guarantee that what will follow will be any better.
Europeans may one day wake up in an environment of revived national rivalries, new political extremism and a continent without the open borders they once took for granted. This could be a tragedy even worse than the economic turmoil the continent is experiencing at the moment.
