Continental Divide

“Europe is either going to fall forward or fall back,” my friend Pierre, a French diplomat, told me when I was in Paris last month. “And it must fall forward.” By “fall forward,” he meant that European countries must agree to surrender to the European Union much of their control over economic issues, as they already have over currency, internal migration, and the like. And by “must” he meant that the crisis over the euro had brought the system to a supreme moment of decision in which Europeans had to choose between greater integration and collapse.

“But will Europeans agree to fall forward?” I asked.

“That’s the problem,” said Pierre with a rueful grin.

Yes, that’s the problem — or rather, the Gordian knot that Europe’s policy intellectuals and political leaders can neither cut nor unravel. The American sense of institutional dysfunction — a lobbyist-owned Congress, a minority able to block a majority in the Senate — seems modest by comparison. For an equivalent sense of crisis, you’d almost have to go back to the period in the 1780s when Americans recognized that the Articles of Confederation provided too weak a framework to keep the former colonies — at the time more like separate countries than provinces — bound together; the states ultimately accepted the need to surrender much of their sovereignty to an empowered central government.

In a recent essay, Mark Leonard, director of the European Council on Foreign Policy, wrote of “the necessity and impossibility of integration.” The “necessity” part of the equation is clear enough. A deep recession, along with an acute banking crisis, has left Europe’s weaker economies, including Greece, Ireland, Italy, and Portugal, with enormous debts relative to the size of their economies. The market has responded by refusing to buy the bonds those countries issue save at interest rates so high that first one of them, then another, has been threatened with bankruptcy. And the wealthier countries of the eurozone, fearing a contagion that could engulf them all, have agreed — in the most piecemeal and grudging manner possible — to raise sufficient capital to temporarily avert default, leaving publics in both debtor and creditor nations furious and resentful. A currency union of 17 nations, each with their own tax rates and public sector employment rates and labor market rules — and above all, their own wildly varying rates of productivity — cannot last. Either a mechanism has to be found to make them behave more like one another, or the 20-year-old experiment that is the euro, and perhaps even the half-century-old experiment that is the EU, will come to an end.

What would that mechanism to be? Most of the suggestions involve a so-called “two-speed Europe,” with an avant-garde accepting a much greater degree of mutual integration and a rearguard adhering more or less to the current system — in effect, falling forward and standing pat at the same time. The avant-garde would likely consist of the current euro states, while the others, like Britain, Denmark, and Poland, would constitute the rearguard. The “euro-core” countries could achieve their federated system by changes in EU treaty, by operating inside existing treaties, or by reaching a series of intergovernmental arrangements. One scheme envisions a kind of consolation-prize entity for the non-core countries, a free-trade zone that might even incorporate non-EU members like Turkey and Russia.

All such plans are fraught with difficulties. Britain, among others, would never accept second-class citizenship, and instead might leave the EU altogether. The weaker states in the euro-core might choose to revert to their own currency rather than undergo radical economic and political surgery. But the greatest problem is that ordinary European citizens, unlike Americans in 1787, are not prepared to surrender their sovereignty to a federal government. European leaders once imagined that this shift in loyalties was almost inevitable. In 1948, Winston Churchill said, “We hope to see a Europe where every man of every country will think of being European as belonging to their native land….” But that has not come to pass. The cautious, step-wise process of European integration hit a roadblock with the effort to adopt a European constitution in 2005, which both the French and the Dutch rejected in a referendum.

Further movement toward integration — which increasingly has meant building the capacity to hold laggard economies to account — has thus been carried out quietly, by bureaucrats in Brussels rather than openly, through democratic means. And EU membership now comes not only with delightful opportunities, like passport-free travel, but with onerous (if often unenforced) obligations, like budgetary discipline. This has led to the current crisis in legitimacy. “As the EU matured as a political project,” Mark Leonard writes, “its very success as a bureaucratic phenomenon fueled a populist backlash at a national level.” The eurozone crisis has only accelerated this process. The new, Brussels-approved prime ministers in Italy and Greece have broad public support. But what happens when they begin to implement the painful austerity measures required to stave off default and meet the terms of bailout agreements? Even if voters conclude that deep cuts in public spending, pensions and wages are a price worth paying in order to remain in the eurozone, their resentment of the system will only grow.

There are two ways to view this populist alienation from Brussels: as a matter of culture and as a matter of politics. The former European Commissioner Chris Patten has suggested that the nation-state is “the largest unit, perhaps, to which people will willingly accord emotional allegiance.” As David Brooks wrote in a recent New York Times column, West Germans were prepared to make major sacrifices to reunite with their eastern brethren, but Germans generally are not prepared to pay for the Greeks. Indeed, this popular antipathy has handcuffed German Chancellor Angela Merkel as she has tried to reach agreement with Europeans leaders on a solution to the euro crisis. The EU is thus a symptom of a larger crisis of liberalism, which once imagined that men would slough off their atavistic loyalties, whether to nation or to God, in the name of prosperity, efficiency, and rationality, with Greeks and Swedes alike becoming fresh-minted Europeans. The EU, Brooks writes, was only one of several ultimately failed post-World War II efforts — the United Nations was another — “to build governments that were transnational, passionless and safe.”

All that may well be so; but the EU has exacerbated this intrinsic cultural problem by consistently choosing technocracy over democracy. You cannot move from an Articles of Confederation world to a United States of Europe by bureaucratic stealth, or by quiet agreements between political leaders. Joschka Fischer, the former German foreign minister and a leading proponent of a two-speed Europe, has argued that further integration can only be pursued “in the bright light of democratic politics.” Fischer asserts that that European leaders must openly acknowledge that sovereignty is at issue here, and must respond to public concern by ensuring a strong role for national parliaments in any future settlement. Mark Leonard pointed out in a phone conversation that Europeans will only agree to the further surrender of sovereignty if the EU embraces issues that they, and not just their bankers, care about, such as immigration — and if financial prescriptions are seen to promote growth, and not just austerity, the great German preoccupation. Absent pro-growth policies, the whole project may become irrelevant in any case, since the most endangered economies will never pay off their debt through cuts alone.

The cultural problem may be insuperable. It is, if anything, compounded by technology: The overall direction of the world is towards disaggregation, homemade networks of the likeminded, suspicion of distant authority. Perhaps the EU will come to be seen, in retrospect, as a quintessential product of the second half of the twentieth century. And yet the EU has not only brought immense prosperity to Europe but has helped foster Europe’s collective identity as a place of peace, tolerance, and the good life. That’s why my friend, Pierre, and so many others, believe that Europe must fall forwards. But it will never do so without broad political legitimacy; and that will require a very different EU from the one which has existed until now.