Economic problems constitutes only a part of the eurozone’s troubles. The euro crisis is, above all, a reflection of deep-seated weaknesses in European institutions and the fabric of European society.
MADRID – While the world anxiously awaits the climax of the eurozone drama, its leaders’ behavior resembles the political equivalent of what physicists call “Brownian motion,” with officials bouncing randomly from one crucial bilateral consultation and vital European summit to the next. The impact of make-or-break declarations that are supposed to solve the monetary union’s problems dissipates almost as soon as they are issued.
Meanwhile, a plethora of diagnoses and prescriptions are competing for attention – and in their gloominess. But their overwhelming focus on the economics of the euro crisis is itself part of the problem because the crisis is, above all, a reflection of deep-seated weaknesses in European institutions and the fabric of European society. Otherwise, what began as a marginal debt crisis, aggravated by political indecisiveness in Greece and in the European Union as a whole, would not have grown into an existential watershed moment for the European project.
Europe is plagued by three distinct problems. First, it remains incapable of adjusting to the realities of a world whose center of gravity has irrevocably shifted eastward to the Pacific, pulling with it the attention of the United States. Second, more than ever, Europeans are looking inward, as a sense of entitlement meets pervasive skepticism – a combination that permeates to the highest echelons of the Union and EU national governments.
Meanwhile, at a time when the EU’s basic law, the Treaty of Lisbon, needs to be reformed, the entire Union is paralyzed by the navel-gazing attitude of a Germany beset by 90-year-old memories of the doomed Weimar Republic. Therein lies the problem: the decision-making process that has underwritten much of the EU’s construction, while highly effective during the Cold War, when the Union’s institutional and legal foundations were laid, has remained largely intact, leaving Europe unable to address its current challenges.
Founded on the stability of the Cold War era’s bipolar international order, the EU had the luxury of time as it deliberated on each successive building block of its growing edifice. No sooner would a new block be set in place than agents of further integration would infiltrate the existing structure and establish the bridgeheads from which the EU would evolve further.
Indeed, some of the Union’s major undertakings – European Monetary Union being a fitting example – were contemplated for years before seeing the light of day. The EMU, implemented in 1999 with the launch of the euro, bore the DNA of the Delors Committee, which laid out the fundamentals of the common currency in 1988. Critics have been quick to dismiss the incomplete nature of the euro’s original structure, which remains unchanged to this day. But these critics forget that the greatest miscalculation was the assumption of stability while on the verge of a systemic transformation impregnated with volatility.
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They still do. That is why, in facing its gravest test so far, Europe seems oblivious: its leaders project confusion and indecision; its citizens exude a mixture of complacency, indifference, and self-doubt; and its institutions are locked in turf battles and remain hindered by laborious procedures and protocol.
It is also part of the reason why markets are besieging the eurozone so incessantly. What investors sense is not weak economic fundamentals, but Europe’s weak political fundamentals – the absence of a governance structure with real power and the will to use that power to resolve problems. If Europe is to adjust to the requirements of the new “Pacific world,” it does not need fine-tuning; it needs a new design.
The EU is a political structure based on the rule of law. As such, it cannot afford to disregard the vital tasks of updating its procedural components. On a deeper level, Europeans need to replace their melodramatic, and entirely groundless, self-doubt with the pride and determination befitting their example of democracy and prosperity. And, most immediately, Germany must stop singing solo and start playing its part in the European choir.
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MADRID – While the world anxiously awaits the climax of the eurozone drama, its leaders’ behavior resembles the political equivalent of what physicists call “Brownian motion,” with officials bouncing randomly from one crucial bilateral consultation and vital European summit to the next. The impact of make-or-break declarations that are supposed to solve the monetary union’s problems dissipates almost as soon as they are issued.
Meanwhile, a plethora of diagnoses and prescriptions are competing for attention – and in their gloominess. But their overwhelming focus on the economics of the euro crisis is itself part of the problem because the crisis is, above all, a reflection of deep-seated weaknesses in European institutions and the fabric of European society. Otherwise, what began as a marginal debt crisis, aggravated by political indecisiveness in Greece and in the European Union as a whole, would not have grown into an existential watershed moment for the European project.
Europe is plagued by three distinct problems. First, it remains incapable of adjusting to the realities of a world whose center of gravity has irrevocably shifted eastward to the Pacific, pulling with it the attention of the United States. Second, more than ever, Europeans are looking inward, as a sense of entitlement meets pervasive skepticism – a combination that permeates to the highest echelons of the Union and EU national governments.
Meanwhile, at a time when the EU’s basic law, the Treaty of Lisbon, needs to be reformed, the entire Union is paralyzed by the navel-gazing attitude of a Germany beset by 90-year-old memories of the doomed Weimar Republic. Therein lies the problem: the decision-making process that has underwritten much of the EU’s construction, while highly effective during the Cold War, when the Union’s institutional and legal foundations were laid, has remained largely intact, leaving Europe unable to address its current challenges.
Founded on the stability of the Cold War era’s bipolar international order, the EU had the luxury of time as it deliberated on each successive building block of its growing edifice. No sooner would a new block be set in place than agents of further integration would infiltrate the existing structure and establish the bridgeheads from which the EU would evolve further.
Indeed, some of the Union’s major undertakings – European Monetary Union being a fitting example – were contemplated for years before seeing the light of day. The EMU, implemented in 1999 with the launch of the euro, bore the DNA of the Delors Committee, which laid out the fundamentals of the common currency in 1988. Critics have been quick to dismiss the incomplete nature of the euro’s original structure, which remains unchanged to this day. But these critics forget that the greatest miscalculation was the assumption of stability while on the verge of a systemic transformation impregnated with volatility.
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Europe’s current crisis is rooted in loss. Untethered from the mooring of Cold War-era bipolarity, Europe was swept off its feet and cast adrift in the currents of a globalized world, unable to find either its place or direction. Most critically, Europe’s old instincts and modus operandi persisted long after the new contours of global affairs had taken shape.
They still do. That is why, in facing its gravest test so far, Europe seems oblivious: its leaders project confusion and indecision; its citizens exude a mixture of complacency, indifference, and self-doubt; and its institutions are locked in turf battles and remain hindered by laborious procedures and protocol.
It is also part of the reason why markets are besieging the eurozone so incessantly. What investors sense is not weak economic fundamentals, but Europe’s weak political fundamentals – the absence of a governance structure with real power and the will to use that power to resolve problems. If Europe is to adjust to the requirements of the new “Pacific world,” it does not need fine-tuning; it needs a new design.
The EU is a political structure based on the rule of law. As such, it cannot afford to disregard the vital tasks of updating its procedural components. On a deeper level, Europeans need to replace their melodramatic, and entirely groundless, self-doubt with the pride and determination befitting their example of democracy and prosperity. And, most immediately, Germany must stop singing solo and start playing its part in the European choir.
Read more from our "Europe's Nobel Project" Focal Point.