Who would not remember Gorbatchev’s famous (mis)quote? „Dangers await only those who do not react to life”, the actual quote runs. And it seems to be happening again. EU leaders are stumbling from one EU summit to another in minuscule steps. The political elite failed to tell a bold European story, failed to engage in courageous steps and failed to be honest about what would be needed to save not only the euro, but also to make Europe a powerful player in the 21st century. We need a game-changing institutional European event, which more or less radically shifts the euro into fiscal federalism and the political system of the EU into a fully fletched European democracy. This is why we are confronted with two opposite dynamics: The very moment, the EU finally tries to develop a banking union by establishing a joint supervisory structure for its banking system to allow direct capitalization of banks – a step in the right direction - further processes of euro disintegration and fragmentation are happening quicker than expected and faster than the EU can react. Sometimes, good things can come too late…
Time is running out for Europe on at least two fronts: The renationalisation of the European banking system is fully under way, cross border lending between banks has nearly stopped, money transfers from Germany to other countries is curbed and some banks started calculating cross-border claims – an unthinkable procedure if the euro were to be considered permanent and irreversible. The irony of history might be that recent decisions that were supposed to reduce contingency effects in case of e.g. a Greek exit now make a euro break-up somehow feasible, though highly expensive. In addition, economic divergences between the North and the South are actually increasing, not decreasing.
The second disintegration is the one of public opinion. In Germany, but also beyond (the Finns are another example for a public turning hostile, let alone the British): Germans are fed up with the euro-crisis: 52% of Germans don’t like the idea of a United States of Europe and are against changing the Basic Law in order to save Europe, 74% of Germans disapprove of the idea of a common European state and only 33% agree with Schäuble’s idea of a directly elected EU president. 73% are against the introduction of eurobonds. Here, the irony is that in the very moment Germany embarks on a dynamic and open public debate about the potential constitutional consequences of any kind of debt mutualization in the eurozone, German public opinion on Europe turns sour. The visible expression of this are numerous complaints in Karlsruhe with respect to the most recent ESM decisions at the European Council, the refusal of the German President to sign the ESM ratification law as well as the recent letter of German economists against the Council conclusions.
In 1955 Konrad Adenauer was told by his advisor that some 70% of the German public would be against German rearmament, Adenauer’s response was simply: “And what do you do against this?”
Well, the German government - and not only Merkel (contrary to what President Gauck said) - actually does a lot these days to explain Europe, trying to turn around public opinion in a last-minute effort - and to prepare the public for what needs to come next: deep cuts to national sovereignty. This argument made its way even to the front page of the FAZ feuilleton. But public opinion follows its own logic. After two years of blame games (“lazy Greeks”) and victimization (“we pay for the rest of Europe”), it is increasingly hard to make a bold, and, above all, political and strategic case for Europe in Germany: We lost sight of the forest for the trees.
As politics seems to have lost leadership and guidance on the European question at large, the German dynamics seem to suggest that further steps of European integration are either blocked by Karlsruhe, the Constitutional Court, or voted down by the people – a choice between two evils.
Hence, with a muddling through strategy, overstretching either ECB to provide non-legitimate solutions or further ESM rescue steps scraping ever more at legal or constitutional red-lines, the euro is probably doomed to fail over time, because that is the best way to lose all remaining trust in Europe among citizens, in Germany and beyond. The tiny and mostly technical euro rescue steps must necessarily appear meaningless without a clear vision, without telling a compelling European story about what we are aiming for. Until now we have failed to present the European project in a way that is transparent and convincing for a large majority of European citizens. It seems too expensive and confusing to most people, something in which they don’t have a say anyway: But the real problem in the EU is not a democratic deficit, in the sense of increased input legitimacy, but rather a democratic disconnect.
What is missing in the EU is the political-cultural perception that the institutions of government are genuinely owned by the people, which they have historically constituted for the purpose of self government over time. Europeans may favor integration for all sorts of instrumental reasons, but they do not yet experience it as theirs. Without such demos-legitimacy, rather than some distant bureaucratic construct - Europe will always have a great deal of difficulty overcoming its democratic deficit, no matter how much input and output legitimacy otherwise exists.
Therefore, organizing a European “constituante” is perhaps not such a bad idea and could precisely offer this kind of governmental ownership and identity. Europe and the Euro, if at all, will be won in the offensive, not in the defensive. To be sure, a referendum is the worst option, as it means to surrender political responsibility to the street under the disguise of “real’ democracy and everybody knows that the no-vote is easier to organize than a yes to complex questions. But between a “no” from Karlsruhe and a “no” by referendum, I would still prefer the latter: democracy and Europe must come together; or democracy tops Europe.
I am still convinced that, at least in Germany, not only such a referendum could be won, because there is a very compelling story to tell for Germany in Europe, but that such a German step could radiate positively on public opinions in other EU countries. Therefore, the European question should become the key question for the German election campaign next years, the best way to find and to discuss the story of Europe. Hence, talking to German party officials recently and asking them whether they are thinking of putting Europe into the middle of the elections, the answer was rather evasive. Dangers await only those who do not react to life….
The other option of history is that continued muddling through and shying away from courageous discussions fuels further populism and may lead, as rumors start, e.g. to Arnold Schwarzenegger taking over Austria first - and then, why not, Europe? Be reminded that California in 2011, when Governor Schwarzenegger left, was 7th on a list of 10 states (topped by Greece and Ukraine) of countries most likely to default. For all of those who want sound fiscal policies, populism is not an option. It is time to get started with a compelling European story…
13th July 2012 at 05:07pm
Ulrike Guérot generally writes crisply and projects sound ideas about Europe and the place of Germany in it. This note follows the pattern. However, I would like to take exception to one statement in her note:
“… the German dynamics seem to suggest that further steps of European integration are either blocked by Karlsruhe, the Constitutional Court, or voted down by the people – a choice between two evils.”
European integration is not a given. It’s a choice made through a democratic process by all citizens. In a democratic Germany, protection of the constitution by the Karlsruhe Court counts as a pillar of post-war stability. Likewise, the “vote by the people” distinguishes the Rhine republic from its predecessors early in the previous century. Both – the constitutional order and democratic accountability – form the true acqui of post-war Germany. To say that they are “evil choices” flies in the face of conventional wisdom, to which surely Ulrike subscribes.
I consider this a slip of the tongue and not a true expression of Ulrike’s thinking.
Carrying the thought further, however, it’s becoming clearer that the Germans (and also other nations in Europe) distinguish between sustainability of the euro and sustainability of the EU. They consider the failure of the former as acceptable but would balk at damaging the acquis communautaires of the Union sans euro. I take it as a loud message from the governed to the governing: focus on preserving the single market in its narrow form if the EMU cannot be saved.
The EU will not advance morally or politically if it disregards the voice of its people or tramples upon constitutions. Dismantling of currency unions has happened hundreds of times in the history of money. Thousands of states and municipalities have gone belly up. Few of these instances unleashed wars and conflicts. Failure is a prerequisite of progress. It’s time for the EU and its taxpayers to take stock of the feasible and go for second-bests, if advisable.
1st May 2013 at 01:05am
Thank you for your detailed explanation. It was very helpful. +1 to you good sir.
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