The Union after the Euro-crisis and in Ukraine Crisis
On NewYear’s Eve 2011, a sober but moving ceremony took place in the Estonia theatre in Tallinn. Prime-minister Ansip withdrew his country’s first euros from an ATM outside the building, walked back inside and delivered a fine speech to the nation. “First and foremost,” he started, “what the euro means to us is security. The euro is our security that Estonia is really part of Europe.”
Those were the days when American commentators were predicting the euro’s precise end date, speculators were betting billions on a Greek exit, and euro governments were struggling summit after summit to prevent “financial contagion.”Even its friends joked that Estonia had bought “the last ticket to the Titanic.”
Three years on, it seems the small Baltic country was smarter than many Anglo-Saxon pundits. Not only has the eurozone survived the crisis, but due to a grave conflict with Russia, the rest of Europe, too, is learning fast to appreciate the political value of membership. Meanwhile, Latvia adopted the euro too, Lithuania is next in line and Poland could accelerate its bid. For these countries, euro membership is not just a matter of economics, but also of politics— even security.
A crisis is a moment of truth. When the ground under your feet is shaking, when an opponent suddenly knocks on the door, you discover what inner strength you possess. An individual or political body can learn more about themselves in such single moments than weeks or years when time is just going by.
Two such moments of brutal clarification hit the countries of Europe in a short time. The euro crisis mercilessly tested the resolve of leaders and peoples to save the single currency. The geopolitical standoff around Ukraine forces a joint response to a show of force. Both these vital tests bring uncomfortable truths, but also empowering clarifications. In both cases, it is about the Return of Politics.
Four principles in particular can be seen with new clarity. First: the European Union is about politics, not just the economy. Second: it works through power, not only with values and rules. Third: it has become a daily reality for all, not just a ”project” for a few. Fourth: the Union is a club of states and peoples, and bound to remain so.
To grasp their full significance, we must resist the media temptation to simply move the spotlights onto the next drama. As twitter conversations move seamlessly from banking policy priorities and Greek coalition puzzles to Kremlin-watching and Maidan-support, one risks overlooking the powerful insights the euro saga holds for the Union’s upcoming challenges.
Both in the euro crisis and now in Ukraine questions of sacrifice and solidarity come to the fore. Are we ready to help others to protect monetary stability and unity? Are we ready to inflict pain on Russia, and face some in return, to stand up for European interests and values? These tough questions are perhaps the surest sign the Union is moving into new political territory.
Unsurprisingly, Euro-skeptics watch the contours of a more political Europe with suspicion and are ready to exploit people’s fears for it in the upcoming European elections. Marine Le Pen of the Front National and Nigel Farage of British UKIP, both cheering when the euro was in danger, are today fully aligned with the Kremlin over Crimea.
More intriguingly, the euro-federalist camp has its reserves too. The Return of Politics challenges some illusions and shakes the self-image of the Brussels orthodoxy. Was the European Community not supposed to be the avant-garde of global peace, the forerunner of the End of History or at least the supersession of the nationstate? Was “Europe” not the promise of an End to politics-as-we-knew it? Hence perhaps the lukewarm welcome in federalist circles to its Return.
Let us look in more detail at these four political fundamentals.
1. Invisible Political Glue
The European Union was from the start a political project. But with the economic dress it chose—a market, a currency—this raison d’etre disappeared from sight. In emergency situations, the underlying politics reappears. See today’s debate on sanctions against Russia, where security interests trump commercial interests. But in the euro crisis too—although fought out in the financial language of banks, deficits, loans and “spreads”—political arguments outplayed economic ones.
The economic costs and risks of a eurozone break-up naturally played a role; all wanted to avoid bank runs or a Great Depression. But mid-2012, once German and French banks had reduced their exposure to Greek debt, it was felt in some circles that a Grexit was financially manageable. What tilted the balance, also in Berlin, The Hague or Helsinki, were political arguments. These were related to such things as possible instability on the Balkans, Europe’s image in the world, the Franco-German relationship, even the survival of the European Union.
Here lies the euro storm’s most important political lesson. Whatever the divisions and hesitations on the way, the invisible political glue that held the Union was much stronger than anybody had foreseen. It is worth keeping this in mind before panicking over future challenges.
2. Beyond Rules and Words
There is a limit to rule-based policies. That European states gave themselves rules to pacify interstate relations is historically the Union’s greatest asset. But on fixed rules alone you cannot base joint action when you are faced with unforeseen circumstances.
With Ukraine, Europe’s enlargement and neighborhood policy is reaching its limits— geographically and conceptually. Europe wants to be a force of normative attraction for its neighbors and at the same time to deny that it thereby projects power. This self-denial becomes untenable.
In the negotiations about stronger ties, the EU side asked Ukraine to choose between signing the Association Agreement with Europe or joining the Customs Union with Russia. This was a truly existential geopolitical choice—as it turned out, a matter of war and peace!—so it was rather light to justify it with bureaucratic rules (in this case, of the WTO)… Events will push European countries to acknowledge that, like it or not, they are, jointly, a power-player.
Just as values and standards alone cannot constitute a foreign policy, rules alone cannot constitute economic policy. In the Greek emergency, member countries learned the hard way that a monetary union cannot survive a shock by relying purely on rules for debt and deficit. It required not only better rule enforcement, but also better crisis management. (The argument in certain German and Dutch circles that if only the Maastricht debt rules had been respected, all would have been fine, is pure theory: it comes down to saying that as long as nobody plays with fire, you do not need a fire brigade.)
3. Daily Experience and Domestic Politics
The most crucial political discovery of recent years is the degree of interdependence of our countries. Since 2010, people experienced what it really means to share a currency. They now know that what happens with debts in Italy, housing bubbles in Ireland or banks in Cyprus can have a direct impact on their jobs, their pensions, their savings in Germany, Portugal or Estonia (and vice versa!). We are economically interlinked, but also politically. In recent years, national elections in the Greece, the Netherlands, Italy or Germany have been intently followed across the rest of Europe, and so will the 2015 UK elections and the Scottish referendum—not out of exotic curiosity but as the tremors and rumbles of a now common political space.
This experience is radically new. As recently as twenty years ago, “Europe” mattered to just a few groups: big business, farmers, the first “Erasmus” students… Today, through the currency and free movement, it is a daily experience for all citizens. It is normal that it should take time to digest this discovery. It also explains that Europe is no longer an uncontested ideal, but a matter of political judgment.
As a result, Europe entered national politics. More than ever, European politics is domestic politics.
During the euro crisis, national political leaders and parliaments played a central role. It could not have been otherwise. The central EU institutions did not dispose of enough financial firepower and competencies, nor the legitimacy to change the rules on which they are built. Nevertheless, authoritative European voices such as Jürgen Habermas or Jacques Delors deplored the implication of national leaders in the crisis management as a “renationalization of European politics,” even comparing it to the 1930s. They misread the situation. What we are seeing, instead, is a“Europeanization of national politics.” This can strengthen the common adventure.
4. The Nature of the Beast—Call it a Union
During the debt crisis, many American and some European critics claimed the euro countries stood before the fateful choice to “Unite or die,” either to jump to a federal eurozone or to collapse. A moment of truth, they said. Indeed. But had they better grasped the Union’s nature, they could have foreseen right away that European politics is and remains a matter of in between. Eighteen states with one currency: perhaps unpractical, but a political fact of life. The euro is here to stay (as the markets have finally understood), and so are the member states.
This latter clarification is crucial for people’s trust in the joint enterprise. For too long the history of integration has been portrayed as a slow erosion of the nation-states by a new centre, the Union as a half-baked provisional entity on the way to a perfect federal future. This view is historically wrong and politically irresponsible. A political Europe cannot be built against the states, only with the states.
In the debate, it is hard to get this view across. The sterile opposition between a good “Community method”and bad “intergovernmentalism,”between true Europe and national politics, still holds sway. Angela Merkel tried to break the conceptual deadlock when in 2010 she proposed the term “Union method” to express the new political reality. But she hit some nerves in Brussels and within her own party and retreated from this semantic stand. A pity. If the Union is to retain the support of its citizens and member-peoples, it is urgent to fight the public suspicion of a Brussels plot, while making clear we do have a shared destiny.
Europe’s political life would be helped by a proper self-understanding. The Union is not a “normal” international organization (Look at France during its referendum on the constitutional treaty in 2005, or the United Kingdom today: would any country ever have such a passionate public debate about its membership of the World Health Organization or even NATO?). Nor is it a US-style federation or becoming one.
Some enlightened minds keep hoping for the “United States of Europe.” At every occasion, they shout their disappointment that this is not happening, thereby eroding further the trust in the Union’s necessarily imperfect achievements. The better is the enemy of the good.
A European public will not arise by asking people to step out of their German, Polish, British or Maltese cloths, but only by repeating time and again that it is precisely—and also as Germans, Maltese etc.—that they are European.
The great French historian Jacques Le Goff once pointed out that the idea of a common European space gained ground at the same time as the kingdoms of France, Spain and England developed, in the fifteenth century. Le Goff: “Europe was born as a federation of kingdoms.” Today we are shaping the continuation of this long, rich history of the peoples and states on our continent.
The Return of Politics is not a ghost of the past, nor a temporary anomaly, but the only realistic way to preserve Europe’s unity and liberty for the future.
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