Why the impossible is also necessary
Looming behind the euro crisis is a larger and more fundamental challenge: the near-collapse of the EU’s political system. The rise of anti-EU populism across Europe has prevented the continent’s politicians from grasping the political challenges.
Technocratic institutional fixes have only provoked more populism. European leaders are now unable to solve the euro crisis because they can only force inadequate solutions through loopholes in the Lisbon Treaty.
In ‘Four scenarios for the reinvention of Europe’, ECFR’s director Mark Leonard offers a new framework for understanding Europe's efficiency and legitimacy crises, and examines the political and legal obstacles to a solution in different member states, the new cultural divisions in Europe, and the rise of new populist forces (including a discussion of the new German and British questions). He sets out different scenarios for solving the euro crisis without exacerbating the chronic crisis of declining European power.
- Asymetric integration would continue finding incremental solutions without treaty changes. This is the easiest solution but risks failing to solve the crisis, exacerbating the resistance of Europe’s citizens, and shifting from a rules-based EU to a power-based EU.
- A smaller Eurozone, dropping the Greeks and maybe others, would be more sustainable and less painful, but could unleash a tsunami of panic that could result in the unravelling of the euro, a deep recession and a loss of EU influence in the world.
- Political union through treaty change would be the most complete and durable, but carry the risk of spectacular failure, for instance through rejection by referendums or parliaments, leading to the disintegration of the EU itself.
- Federalism without the federalists, based around deeper integration in the Eurozone outside the scope of existing EU treaties and insitutions. But this would risk a gulf opening within Europe and the global marginalisation of the core EU17.
The author argues that the EU has lost legitimacy because its leaders cannot act. But the reason they cannot act is in turn because the EU has so little legitimacy. He examines the three traditional channels for strengthening democratic participation and legitimacy – electing EU officials, referendums and national opt-outs – and concludes that each route could make Europe harder to govern.
“The best hope of regaining European credibility, and stemming the tide of disintegration, may be to develop political rather than institutional responses to the anti-European arguments of the populists. The real challenge will be to solve the acute euro crisis without at the same time exacerbating the chronic crisis of declining European power.” Mark Leonard
The research for ‘Four scenarios for the reinvention of Europe’ is based on interviews with senior officials and political figures in 19 EU member states. The paper is the first official publication in ECFR’s major new project on reinvention.
ECFR's blog is running a series of responses to this paper from prominent thinkers and academics:
– 'we still live in an era in which the nationalist project is more seductive than any project of integration among nations'
- 'For democracy to survive and retrieve in Europe, responsiveness and accountability of rulers should be moving from the state level to the EU level, where so many crucial decisions are already being made'
- Harold James: 'The more Europe suffers, the more its people will see that a reform agenda that is just an exercise in incrementalism is also nothing more than an exercise in futility'.
- Richard Rosecrance: 'In certain respects if Greece or Spain did not exist, they would have to be invented. Their participation in the euro keeps the value of the currency down from $1.80 to $1.20 or $1.30 or so, thereby ensuring the success of German exports to the rest of the world.'
- Brigid Laffan: 'as the Union intrudes more and more into domestic budgetary and public finance choices, can party politics in Europe adapt to a very different governance regime?'
- Charles S. Maier: 'The British can imagine that their banks will suffice, the Germans their autos, but such comparative advantage can dissipate quickly. I’d as soon wager on Greek beaches.'
- Georg Sørensen: 'a substantial part of the present euro crisis has less to do with European cooperation and more to do with member states that are fragile, ineffective, have serious corruption problems...'
- Chris J. Bickerton - 'Populism, after all, is politics without policies; technocracy is policy without politics.'
- Carlos Gaspar - 'In an enlarged “Euroland”, Germany’s pre-eminence could be balanced by a Catholic coalition led by France, Italy and Poland.'
- Dimitri A. Sotiropoulos – 'we still live in an era in which the nationalist project is more seductive than any project of integration among nations'
- Pawel Swieboda'no-one dares to ask the question if the euro is still a political project, as its founders tended to believe, or if it is today about nothing else than damage control'.
- Claus Offe - 'Europe is not just needed as a defensive mechanism to prevent the weak being overpowered by the strong, who first administer an austerity cure without then providing the requisite support for recovery.'
- Mario Teló - 'what is abusively decried by populist voices as a “German Europe” might in fact look a lot like the broadly endorsed “EU2020 strategy”. Input legitimacy may complement output legitimacy.'
- Josep M. Colomer - 'For democracy to survive and retrieve in Europe, responsiveness and accountability of rulers should be moving from the state level to the EU level, where so many crucial decisions are already being made'
- Marco de Andreis - 'a critical mass has been already assembled to make of Europe’s integration a possibility rather than an impossibility. And to at least consider the United States of Europe a fifth scenario for the reinvention of Europe.'
- Miguel Maduro - 'the creation of European politics must go hand in hand with a change in the character of politics. For that, changes in policies may be even more important than changes in institutions.'
- Narcís Serra - 'If we wish to favour economic growth in European countries we must address income redistribution. This must not be done through fiscal measures alone but also by dealing with the heart of the productive structure itself.'
- Brendan Simms: - 'In 2020, President Radek Sikorski of the Democratic Union could long back at a turbulent, but successful first term in office...'