There is no shortage of analysis of European integration, but nothing on its disintegration, Princeton University’s Jan-Werner Mueller recently observed. “Yet what has been unfolding in the past 15 months or so should make even the most ardent pro-European think about an orderly mechanism for making member states exit,” he contends, citing the euro crisis and Hungary’s backsliding from liberal democracy to a soft form of authoritarianism, or “Lukashenko lite“. Europe’s malaise is more political than economic, writes Walter Laqueur. It is generating tensions within and between states with potentially disturbing implications, but it may take a more profound crisis to force the continent’s leaders to embrace fundamental reform.
What next? After a marathon meeting in Brussels, Greece, the banks and the euro have all been saved – certainly up to the end of the year. Dow Jones, NASDAQ and all the other stock exchange indices went up in response.
But what about 2012? The basic problems persist; the banks have accepted a haircut of 50% in Greece—but why not in Portugal, Ireland, not to mention some of the bigger European economies? Europe, as everyone knows by now, faces a debt crisis but it is not at all certain whether this is the real problem, for the American debt ratio is larger than the European, and the Japanese is even larger. The real crisis is political—the fact that it was a fatal mistake to introduce a common currency in Europe without a political framework leaving vital decisions to national governments. Unless such radical reforms are carried out, crises are bound to recur.
But there is no desire at all in the major European countries to proceed towards a United States of Europe. And even if there were such readiness, this would involve protracted constitutional changes in all European countries which cannot be expected in the near future.
There are two alternatives. One is to give up the common currency, but a return to the mark, the franc and other national currencies would not just be a most complicated process, it would be exceedingly costly and dangerous. The European economies are very closely integrated by now and no one knows how to perform radical surgery—or what the consequences would be.
The other alternative is the one performed in Brussels, a bit of reform mixed with business as usual. Keeping the euro, but subjecting it to some more control.
However, these half measures will not work except perhaps in the short run. Many years ago, Belgian Prime Minister Leo Tindemans compared Europe to a half-finished building, predicting that such an edifice would not last: exposed to the force of the elements it would eventually be damaged and ruined.
The dangers facing Europe are predominantly political and they will lead to further polarization—within and between countries. Governments are becoming more and more unpopular because they are carrying out policies which no one likes – austerity, spending cuts, enforced saving. At the same time, tensions are increase between Northern Europe’s donor nations and Southern Europe’s aid recipients.
What could be a way out of this mess? Some have suggested two Europes instead of one – separating the relatively prosperous northern league from the acutely troubled southern division. But nobody knows how this would function: Should France belong to the south? It was even suggested at the annual Lindau meeting of some twenty-plus Nobel prize winner that Germany should belong to the south, which they claim from a purely economic sense would make more sense. But unfortunately what may make economic sense, could be politically absurd.
Another suggestion refers to the Hanseatic League, a north European organization, extending from Scotland to Novgorod, which survived from the 13th to the 17th century. It mainly engaged in trade, functioning as a customs union of sorts, but also had its own legal system, although no common foreign policy or army. (It is still used for the purpose of car registration—HH stands for Hansa Hamburg.) However, organizations which functioned reasonable well in the late middle ages are not a necessarily a good model for the contemporary world.
I have long believed, following Jean Monnet, that a new impetus towards European unity may come only as the result of a crisis—crises being the great federators in history. Neither individuals nor groups decide to cooperate closely unless faced with a clear and present danger.
Now the crisis has arrived but apparently it has not been sufficiently traumatic to have this effect. Perhaps more than one crisis is needed or an even greater emergency.
Walter Laqueur’s latest book, After The Fall: The End of the European Dream and the Decline of a Continent, the sequel to Last Days of Europe, will be published in January 2012.