Defanged by division: why the anti-euros can’t win
Published in Business Spectator (Melbourne), 4 April 2013
If there is any surprising aspect of the euro crisis left after more than three years of agony, it is the lack of a pan-European anti-euro movement. Seen from the distant South Pacific this looks odd. It is evident that the euro does not work. It is even clearer that the policies to save it are a complete and utter failure.
So why are the Europeans still putting up with a perma-crisis instead of sending their political leadership into collective early retirement?
In Australia, governments and prime ministers have been exchanged for lesser reasons than ruining the economy of a whole continent and driving entire generations into unemployment. In Europe, on the other hand, some governments may have lost national elections as a consequence of the euro crisis. But the general policy prescription of bailouts combined with austerity was never allowed to change. Why not?
A large part of the answer is that there is no commonly agreed analysis of Europe’s problems. In all eurozone countries, opinion polls suggest there is widespread unease about the euro and the European Union’s crisis management. What differs, however, are the reasons for the Europeans’ unhappiness.
In those countries underwriting the policies to save the euro, the primary concern is paying for the mistakes of others. The Finns, Dutch, Austrians and Germans obviously don’t want to pay for Russian oligarchs and their deposits in Cyprus, Greek early retirees, or Italian tax-evaders. These are, of course, simplified and stereotypical exaggerations but it’s the gist of popular opposition against the euro in core euro countries.
The mood in the crisis plagued euro periphery is different, of course. To those opposing the euro in Greece, Cyprus or Italy, the euro and its policies are unwanted diktats from Brussels, Frankfurt and Berlin – policies designed to compel economic reforms that would have never been undertaken on their own.
And watched from across the British channel, at least by those inclined to read tabloid newspapers, the euro is just the way in which Germany belatedly won the war. What Hitler’s panzers did not achieve, modern-day Germans manage by virtue of their economic strength: to become the rulers of Europe.
Opposition to the European Union’s euro policies is not only fragmented across the continent. The national anti-euro narratives are not even compatible.
There is no way in which, say, a German concerned about inflation, competitiveness and his own tax burden would join forces with a Greek anti-austerity protester. Both may be convinced that the Euro is the root of all evil – but for entirely different reasons. To the German, the euro would be responsible for Greek profligacy before the crisis; to the Greek it would be blamed for German imposed austerity during the crisis. Anti-euro campaigners in the rich core of the EU want the exact opposite of what anti-euro campaigners call for in the European periphery.
In most European countries, there are now eurosceptical movements. But their political philosophies could not be more different.
Thus the United Kingdom Independence Party, the ‘Alternative für Deutschland’, and Austria’s ‘Team Stronach’ could all broadly be characterised as anti-EU and economically liberal – though they certainly differ on many questions of substance and style. Meanwhile, Beppe Grillo’s Five Star Movement in Italy or the Coalition of the Radical Left (Syriza) under their leader Alexis Tsipras in Greece find the reasons for their anti-euro stance in the rejection of EU mandated policies of economic reform and budget cuts.
The European Union has always suffered from its inability to unite the continent behind its common causes. Ironically, its critics are facing the exact same difficulty. They are too diverse in outlook and opinion to effectively challenge the received EU orthodoxy.
Political opposition to the euro has been made even more difficult by being labelled extreme or reactionary in some countries. In Germany, for example, being in favour of ever closer European integration was long seen as a prerequisite of political respectability. No political party wishing to remain electable would have dared to deviate from this post-war democratic consensus.
The newly founded ‘Alternative für Deutschland’, led by a distinguished economics professor from Hamburg, has had to defend itself against allegations of political extremism from the start. And yet, if there is anything that is extreme about the party, it is its willingness to play by the rules of European democracy.
Germany’s new eurosceptical party describes itself as pro-European and even pro-EU despite its insistence that the introduction of the euro was a mistake that ought to be corrected. However, as far as the Alternative is concerned, the end of the eurozone should come about as the result of renegotiations among the members of the eurozone.
As the party explains it on its website, there should be “an orderly dissolution of the eurozone”. Which probably means something akin to a structured end to complete chaos, or anarchy overcome by mutual agreement.
The Alternative’s views are hardly radical because they still try to find some new kind of consensus between eurozone countries. It is all somehow reminiscent of Lenin’s famous dictum that German revolutionaries would not storm a railway station without first buying a platform ticket.
If some German commentators are concerned about the perceived extremism of the Alternative it says more about the country’s consensus obsessed culture than about the new party’s political platform.
But as long as Europe’s different anti-euro movements are hopelessly fragmented, the chances are close to zero that there will be any meaningful opposition to the EU’s policies towards the euro, let alone to monetary union itself.
The euro will eventually fail because of all its inherent contradictions and design-flaws. But political opposition will not have contributed much to its downfall.