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July 22nd 2015 print

João Carlos Espada

Divide and Concur in the Euro Zone

Officially, the rhetoric of the euro's champions remains unchanged: the common currency is forging a new Continent by fostering its "ever-closer union". As Greece's endless travails and the reaction to them demonstrate, that quest for amity exists more as notion than fact

euro fracturedPerhaps time has come to question the dogma of an “ever-closer” European Union. Everything and its contrary has already been said about Greece and all the peculiarities that have surrounded the last minute agreement reached in Brussels. But the most striking — indeed, irritating — feature of this pseudo-debate is the growing radicalisation of the verbal confrontation between those who present themselves as “defenders of Greece” and their critics. I regret having to displease the two rival tribes: in my view, this confrontation is basically irrational.

A reasonable attitude in politics will always be based on reflection upon facts. And what the facts have mainly shown, throughout these painful episodes focusing on Greece, is that the euro has increased dramatically the divisions and acrimony among its member states, contrary to what was desired and promised. This acrimony is now taking root in each country, with the consequence being the resuscitating the language of class and national warfare.

The reasonable questions which emerge from these facts is simple: Why is the euro zone witnessing such an unprecedented rise of internal tensions? Why is the project of a single currency, which was supposed to foster convergence and supranational integration, creating results which are the exact opposite of what was intended?

A conjectural explanation may be that the project of a single currency has had very different meanings among the countries that have subscribed to it. For the northern countries, especially Germany, it means mainly fiscal discipline. For others, especially Greece, but certainly not only Greece, it means mainly “solidarity”. Translated, that means, basically, automatic transfers from richer to poorer countries, including the mutualisation of sovereign debts.

We have hitherto witnessed the revolt of the Greek electorate against the euro as a manifestation of fiscal discipline. But it is worth asking, what would be the reaction of the German electorate if the Greek understanding came to be applied? If and when a fiscal union came to be implemented, with automatic transfers, would not Germany experience the rise of extremism, most likely representing the opposite of Syrisa in Greece? Indeed, there-emergence of the extreme right in Germany, even though still limited, can now be observed.

This mismatch between the concerns of Germany (and, more generally, of the northern countries) on the one hand, and the expectation of several Southern nations on the other, should produce an important and intriguing warning to open-minded Europeanists. Perhaps this warning means that the European Union does not possess a national identity — comparable, for example, to that of the United States of America. In Federalist Papers II, John Jay observed in 1787 several features of the American union which are clearly absent in the European experience:

[A] people descended from the same ancestors, speaking the same language, professing the same religion, attached to the same principles of government, very similar in their manners and customs, and who, by their joint counsels, arms and efforts, fighting side by side throughout a long and bloody war, have nobly established their general liberty and independence. As a nation we have made peace and war; as a nation we have vanquished our common enemies; as a nation we have formed alliances, and made treaties, and entered into various compacts and conventions with foreign states.”

Jay’s words and insight must be recalled when we try to define with an open mind the present circumstances of Europe and the euro zone. When it was launched, the euro was supposed to promote economic convergence among the member-states, as well as a greater political union and mutual understanding. The facts are that economic divergence is greater today and the language of national rivalry has returned to political discourse.

A reasonable attitude before these facts seems to recommend prudence and distance from the growing conflict among rival factions. Perhaps these factions are victims of the circumstances that they themselves have created and that they do not dare to question: a dogmatic understanding of the European project, which identifies it with an “ever-closer union”.

For those who defend the original European project of a peaceful and democratic re-encounter of the European national families, perhaps the time has come to question the dogma of that “an ever-closer union”.

João Carlos Espada is the director and founder (1996) of the Institute for Political Studies at the Catholic University of Portugal, where he is University professor of Political Studies

Comments [3]

  1. Jody says:

    John Jay’s 1787 comments are ironic indeed. Ever heard of the American Civil War?

  2. gardner.peter.d says:

    The Greek debacle – it is now unquestionably a vassal state of a German dominated EU – has indeed opened the eyes of many to the irreconcilable differences among its member states. Enoch Powell explained it most succinctly with one word: the EU has no demos. It is a bureaucratic political construct. It does not in its institutions represent the will of the people. It is a supra-national government that by definition and purpose is the antithesis of parliamentary democracy. No national parliament is sovereign. EU laws have primacy over national laws, national treaties must give precedence to EU treaties, the EU is not required to ensure consistency with prior national treaties. The EU Parliament has no power to initiate legislation. That power is reserved to the EU Commission, not one of whose members is elected. The European Court of Justice exists to ensure member states comply with EU law and to further the interests of the EU, specifically towards ‘EVER CLOSER UNION’. The ECJ’s case law overrides the will of elected national parliaments. 60% of UK legislation passing through (most of it not debated) the UK Parliament is mandated – not offered but mandated – by the EU. The foreign, security and defence polices of all member states is coordinated by Federika Mogherini who heads the EU External Action Service, not one of whose members is elected. It is charged with the territorial expansion of the EU. Taxpayers money is spent on campaigns in countries to the east, eg., Ukraine, Kazakhstan, to promote membership of the EU highlighting the vast sums available for the governments of those countries to invest in public works and encouraging them to adopt EU laws and bureaucratic processes and institutions in readiness for membership. For the people of those countries the EU promises freedom and democracy. It is a Faustian bargain. In return for these riches and the target countries must sign away their soul, their sovereignty to the foreigners in Brussels.

    Even Britain, the second or third largest contributor to the EU, has a mere 8.2% of votes on the peak EU body, the EU Council. It has no veto. A majority vote decides almost everything. Out of 28 member states 9 are net contributors, 19 get more out than they put in.

    Oh yes, there is a common market amongst all this. When Britain joined in 1972, the Heath government lied to parliament and the public saying that this was all there was, no loss of sovereignty, knowing full well, as cabinet papers prove, sovereignty would be lost. Britain cannot even control fishing in its national waters.

    The new political divide, at least in Britain with a referendum on its membership of the EU due by 2017, I think is between those who value sovereign parliamentary democracy and those who either don’t care or see advantage in antidemocratic unaccountable corporatist supra national government.

    I think it is wrong to see this in terms of left vs right. Sure the EU regards patriotism as a sign of national socialism and finds democratic expression of national will as welcome as a foul fart. But there is no way any part of the conventional political spectrum except for true fascists and true communists can argue that EU supra-national government is a better way to govern than sovereign parliamentary democracy. Indeed it is striking that even the most ardent EU-philes ever attempt to do so. But that is what they promote and defend.

  3. gardner.peter.d says:

    I forgot to list among the sins of the EU the fact that no member state is permitted to negotiate a trade deal with any non-member. Australia has concluded trade treaties with China and India. Even Iceland has a trade deal with China. UK is not permitted to do so.