People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them.", Jean Monnet
In the last post, the discussion centered on Russia’s
threat to the European Union’s future. However, the significance of that threat
is amplified by the Union’s weakness. What was meant to be the corollary of
Europe’s integration has become its most divisive issue and has shattered the
political scene in many of the Union’s members. I am talking about the Euro.
The tension between politics and European integration
is not new. In fact, it was embedded in the EU’s DNA right from the beginning.
The founding fathers of the Union, Jean Monnet and Adenauer among others had
seen what the advent of mass politics through the introduction of universal
suffrage had done to Europe in the first half of the 20th century. Like
the founding fathers of the US two centuries earlier, their concern was how to
control the savage passions of the masses and, in the European case, avoid further conflict in Europe.
Their response was to make the European integration a totally technocratic
process. The technocrats would create function and need and the politics would
suffer pressure to adapt and accommodate. Because in the beginning, we were talking
about issues that touched peripherally on voters and furthermore the economies
were growing, that process went on seamlessly. The first real test came with
the introduction of the single market 1992 and Thatcher was the first to
understand that the political sphere kept being presented with ”faits accomplis”.
She was the first to rebel but not the last. Following Delors exit, the Heads
of State placed the lackluster Santer in its place and in 1995, the powers of
the European executive branch were greatly diminished through the treaty of
Nice. The great powers wanted to gain firm control of the European process. Or,
shall we say of the European bicycle. Because that was the comparison that was
made. If you stop pedaling, you fell. The single market to work demanded free
movement of people. And, for all to work, it was necessary the single currency.
You have just to keep pedaling.
In 1991, I got an interview with the then
Portuguese central bank governor. At that time, the issue of central bank independence
was a hot topic in Portuguese politics, so I remembered asking him if he felt he
had sufficient independence to conduct the monetary policy. He smiled and
pointed at the fax machine. His autonomy lasted 15 minutes before he received
the fax from Frankfurt with the German interest rate decision. So, we get back
to that eternal European question: Germany. Too big for Europe, too small for the world. Here the technocrats joined hands with the politicians in finding
the single currency the cure all medicine. For the former, it was the corollary
of all efforts in the direction of the European integration. For the latter, it
was the quid pro quo to accept the German reunification. It was a momentous
decision, particularly because it was done without any voter legitimacy. And
worst of all, the selling pitch was done differently to different audiences. In
Germany, as a risk free endeavor and a final price to erase the country’s sins
and be considered as good Europeans. In the South, as the end of a journey. A
rich money in a poor’s people pocket and a painless nirvana. Now, the designers
of the single currency were totally conscious of the tension between the
existence of the Euro and the absence of any European governance mechanism. But,
perversely, that was what the acceleration of the European integration through
the Euro was meant to achieve. To force the political scene to adapt (if this sounds
Marxist it is because it is based in the same reasoning. You have to create political facts). With the Euro, the
pressure for a political integration would amplify. It would also put the
anti-integrationist camp led by the UK on the sidelines. So all the tensions we
see today are in part fruit of design. To oblige the politicians to renounce
their sovereignty in order to save the Euro. Finally accepting the need for a
political union. Everything is perfect except that in a democracy sidelining
the voters cannot be done forever. Because the whole plan might unravel if the
politicians are replaced by others bent in changing the status quo. That is
what we are facing now.
Is this the vision Europe wants?
To understand, how perverse the politics of the
Euro have become, you just have to look at the recent negotiations with Syriza’s
Greece. Logically, any relaxation of the Greece’s conditions would favor the
other southern countries that also underwent an adjustment program, namely
Portugal and Spain so you would expect these countries to support it. A North
against South battle. In fact, no. The biggest opposition to any relaxing of
the Greece’s conditions come precisely from Portugal and Spain. Because any
increased flexibility towards Greece would mean the discrediting of five long
years of harsh medicine. If only they had stood up to the Germans as Syriza has
done and the medicine would have been much more palatable. Of course, this is
an illusion. Voters in France, Italy, Portugal, Spain and Greece are being sold
the reverse hoax of the 90’s. In the 90’s, it was that once the Euro was
introduced, prosperity was around the corner. And for 15 years, fuelled by debt
at German risk levels this was true. Now is that the exit from the currency is
a painless decision. Because, it is not that the defenders of the Euro have
lost the battle of the present. The need for reforms in many of the countries
named was evident. It is that they are losing the fight for the future. What
the establishment parties are proposing to voters is just a very long slog of
austerity. No wonder that parties like Podemos, FN and others are thriving in
this environment.
To be fair the shattering of the European
political center cannot be attributed solely to the Euro. Like the tea party in
the US, it is anti-elite rebellion fuelled by the incapacity of western social
democracy of keeping buying social peace, the social fragmentation brought by
technology and globalization and the perceived corruption and disconnect of the
political system. But like the gold standard in the 1920’s, what the Euro is
doing in Continental Europe is aggravating all these trends by putting the
political system in an economic policy straitjacket. We are paying in full the
price of having embarked in a project that was poorly explained to voters in
particularly in the only country that really surrendered sovereignty when the
Euro was created. Germany. To save Europe, truth needs to be restored. No more
hoaxes and illusions. And the battle of the future needs to be won because it
cannot be abandoned to the distorted and dangerous vision of Marine Le Pen and
others.
