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Europe in crisis: the TINA situation

europe in crisis the tina situation memoria largeQüestions CIDOB, núm. 14

Oleguer Sarsanedas interviews Elina Viilup, Research Fellow, CIDOB
The European Union is experiencing the worst crisis since its foundation --to the limit, in the case of some member countries. This is a crisis that came from outside the Union, basically as collateral damage from globalization (the emerging countries’ demand surge for financing, and the fall-out from the US financial mess), but it has unearthed some serious structural defects in the European construction. This is also a crisis that strengthens distrust in elected
bodies, favors fringe parties and the appeal of populist ideas, and encourages civil protests and extra-parliamentary channels of representation/participation.
Elina Viilup describes the present situation as confusing. Simultaneous, contradictory forces are at play: on the one hand, the power and the decisions in Europe have shifted towards the capitals of the big member countries (especially Berlin); on the other hand, steps are being taken (towards a fiscal union, for example) which seem to be leading unequivocally to a federalizing political union.
>Jean Monnet said that Europe is to be made out of crises. Do you think the present crisis is being useful in this sense?
>A Danish diplomat once told me that advancements in Europe are always made once the crises are solved –not before. The sense of achievement after getting over the Second World War and the crises of the 70s, for instance, was what made us move ahead. The Lisbon Treaty, on the other hand, is clearly a treaty agreed in a bad mood. So, perhaps we shall have to solve the crisis first.
>It is said that we are in a TINA* situation…
>In a way, yes. The EU has been designed to move from technical to political integration. Some members who have joined it later may not realize that the train is actually going somewhere, but it is –and there is this thing about trains: if you are on it, you get to where you were going... unless someone or something pulls the brakes. Historical experience, in fact, indicates that empires rise and fall and very complex structures disintegrate. Some say that the EU treaties are very strong –but so was the Roman Empire. Closer to us: Mikhail Gorbachov thought the structure of the Soviet Union was unbreakable and could be mended to work properly, but when he started tinkering with it, the whole machinery broke down. Even if the contexts are widely different, you can surely learn from the experience of others.
>Do you think we Europeans feel European? Is this not the original problem the EU faces –a popular base?
>It is definitely one of the big problems: Europeans do not feel they share a common European identity. We are paying the sins of the past: European construction has been a work of the elites from the onset. Today, euroscepticism is growing and trust in the European project –even in countries traditionally very much pro-Europe, like Spain-- is going down dramatically. Support for the EU is still strong in some countries like Germany and Poland, but the general trend is downwards.
>However, it is widely believed that we have a unique, social and cultural European model, that this model is now endangered, and that it is an open question whether or not we can save it...
> It is questionable whether the ‘European model’ is the Welfare State, as EU member states are very different. It has more to do with common values. Member states have committed through the EU treaties to share a set of values, not a social model. The Welfare State is now in danger in Western Europe not least due to our weak demographics, so that there seems to be no other option than to shrink it. Reform is inevitable unless we manage to increase dramatically our productivity. Indeed, there is always something positive about a crisis: we can now distinctly see our serious structural problems.
>Is the nation-state, now as ever, the main stumbling block in the way of the logical European evolution towards federalism?
>Yes: more and more so. Today, more and more decisions in Europe are taken by the EU member states --the
core ones, that is. The most influential and active European institution at present is the European Council (it has met some twenty times since the crisis started; in the past, the Heads of State and Government used to meet four times a year), which is where heads of state and government, representing national governments, meet. The European Commission and the European Parliament are being marginalized and decisions are made, increasingly, in Berlin.
>Of course.
>But the Germans are reluctant leaders. They have never wanted a leading role, they have always preferred to go along with the pack. Now the situation has changed: everybody depends on them. One of the effects of the crisis being a heightened lack of confidence between member states, the Germans want to make sure some hard rules are in place this time. At the time of the creation of the Euro, they wanted to advance towards political unity, but the French said no. Now, they want to make sure we all agree on the path, the pace and the methodology.
>And what do the French have to say?
>It is difficult to say what the French position is. Hollande is pro Europe, but his party is lukewarm, and he has to keep an eye on its left wing. No strong action has been coming from Hollande (the invisible man of Europe, as some already call him), and you can sense some disappointment in Brussels and in Berlin. The counterbalance everybody (including the Germans) hoped for after Merkozy is nowhere to be seen. The heart of the matter remains the same: the French do not want to transfer sovereignty –though they may have to now because of the ongoing integration through the back door, via the stability mechanisms.
>Is there not a problem of pace? We live in accelerating times, and decision-making in the EU is so slow… Hence, the technocratic lobby (promoted by EU institutions) is gathering strength. Are we in for less democracy?
>European integration has never in its history evolved at such a fast pace: just look at the record-track of decisions taken in the last year and a half. Regarding democracy: in the EU today, solutions are coming from the member states, and it is the elected leaders from member states who take the decisions.
>But our present leaders shy from telling voters what is happening and what is at stake, let alone what options and strategies are open to us…
>European leaders are bad at communicating, this is a fact. But the situation is very complex indeed, and even they do not seem to wholly understand it. The Germans, for instance, until very recently had no sense of urgency:
they thought there was ample time to set up the rules before tackling the crisis. Had they been more awake, the crisis probably would not have deepened so much. Also, leaders are prone to elite thinking: it is them, not the people, who have to solve things –so, they tend to leave to voters the part of the chorus. Elite thinking explains a phenomenon that is quite remarkable among high-level national and EU politicians and civil servants who live a separate reality: they do not feel the crisis. To them, crisis is an abstract thing to which you can apply ideological solutions.
>Right now, are we thinking of a two-speed or a three-speed Europe?
>The EU is already multi-speed: the twenty-seven, the Eurozone, Schengen. It is always difficult to fit realities into categories. Presumably, the core of this multi-speed Europe would be Germany, the Netherlands, and France? But the latter two are experiencing mounting economic difficulties at present, and the former has just been issued a warning by Moody’s credit-rating agency. Or take the case of Estonia, whose financial sector is controlled by Swedish banks (Sweden is not in the Eurozone), so that the proposed European banking union will necessarily have to take into account non-Eurozone countries too. What is certainly happening is that some member countries are slowly drifting away: the UK, of course, but also the Czech Republic. Perhaps different contractual relations can be entered into with these countries in the future. In any case, one thing is for sure: it is in Germany’s interest to have the South in, for a weaker Euro is good for exports.
>We focus on the economy and finance, but the real challenge is the erosion of the middle classes. Are we getting to a 1920s/1930s situation, do you think?
>I believe this is the main problem Europe faces at the moment: the erosion of the middle classes –which goes hand in hand with voter disillusion with government and elected officials. This is the ideal ecosystem for some scary options: populism, right-wing extremism. From Finland (one of the healthiest economies and most highly-educated societies in Europe) to Greece, parties which up to now were considered to be in the fringe are moving in. However, another important lesson from history is that you cannot apply the same logic to different contexts: this is not Weimar.
>Disparities between member states are likely to be lasting disparities. Does the EU have to adjust to the fact that Europe is, internally, much as any European country?
>Yes indeed. The Germans are set to change the culture of Europe, but this is a very, very difficult task. You just cannot turn Southerners into good Germans. You need to strike a compromise between different mentalities: this is precisely what the EU is all about, this is the cultural richness of the Union. However, having said this, the Greeks can certainly benefit from better, Protestant-inspired governance. So do the Spaniards and the Italians. To a Northern mentality, it is crucial to control how the taxpayers’ money is spent –and here is a perfect example of the cultural differences between North and South: the former say ‘taxpayers’ money’ (it belongs to someone and should
therefore be carefully managed), whereas the latter speak of ‘public money’ (which is often taken to mean nobody’s money).
>The EU is not fully a political union, and further developments are needed. Is it, really, a matter of finishing off the job?
>At the elite level, we are almost there. But we must see if the elites are capable of carrying their people through with them. Right now, here and there throughout Europe, people are protesting. For the first time, people are talking about Europe, they are looking at Europe and they do not like what they see. If leaders –as is happening in Italy and Spain-- fail to explain honestly and transparently to voters what is going on and what they are doing about it, and that the problems we are now facing loom larger than nation-states, people will protest. The forthcoming
elections in Italy (where Silvio Berlusconi has announced his comeback) and the Netherlands (where Geert Wilders, the leader of the Freedom Party, has identified all the European ills with “unelected eurocrats in Brussels and their little friends in Greece”) are to be watched very closely from this perspective. So is the stability of the Spanish
government.
Elina Viilup, Research Fellow, CIDOB