Van Rompuy’s chance

Quick, who’s Herman van Rompuy? Ah, I caught that pause as you struggled to remember that he’s the president of the European Council and sometimes mistakenly called the president of Europe for which he is nevertheless the closest embodiment for such a thing that Europe has.

A veteran of the endless negotiations of Belgium’s linguistic politics, he is little known and little regarded. Indeed, it is precisely because of his anti-notoriety and lack of charisma that he was chosen for his post by the top European national leaders like Angela Merkel and Nicolas Sarkozy who wanted nothing less in the European Council Presidency than a strong personality who could challenge their pretensions to leadership.

Nevertheless, as the European leaders meet today for an informal summit in Brussels to deal with the metastasizing cancer of the euro and the European financial structure, van Rompuy’s hour has struck. The dithering, small minded, self-regarding, narrowly nationalistic indecision of the heads of the major European states has given van Rompuy his chance actually to act like and perhaps become, at least in spirit, the real president of Europe.

Since the European crisis first broke upon the scene two years ago, the talk has been of financial firewalls, austerity, European Central Bank (ECB) lending limits, euro bonds or no euro bonds, of who will pay for what and of one nationality not paying for the sins of another. It’s all been what we in America would call "nickel and dime stuff", small potatoes that have little or nothing to do with the main point.

The European Union was never conceived of as primarily an economic project. From the start it has always been fundamentally a political project aimed at uniting Europe, smothering its insecurities and jealousies, and preventing for all time any more suicidal European civil wars. At the critical moments in the evolution of the EU, the primary considerations have always been political, social, and strategic, not economic. Think, for instance, of the moment of the fall of the Berlin Wall and the opening of the possibility of the reunification of Germany. Economically, the prospect was not all that attractive. The integration of the relatively poor East Germany into the West German and EU economies was going to be difficult and expensive under any circumstances. But to make it possible politically required that the integration be done on the basis of valuing the East German currency at par with the West German D Mark even though it clearly had no such real value. Did then West German Chancellor Helmut Kohl hesitate? Did he stop to ask whether other Europeans might balk at the higher interest rates they would have to pay as part of their contribution to German reunification? For that matter, did the other Europeans balk? Did Francois Mitterand hinder or help reunification? What did U.S. President George H.W. Bush do? They all supported the move, costs be damned.

Today, van Rompuy is in the perfect position to recall this history to those gathering in Brussels for what well may be the last chance to find a way to hold the great European project together.

In doing so, he must appeal particularly to German Chancellor Angela Merkel and her German colleagues. While the focus has been mostly on Greece over the past two years, the problem has been mostly in Germany. The Germans seem to have forgotten that the rest of Europe paid a high price to help facilitate German reunion. The Germans also seem to have forgotten that it is they who have been the big winners from the EU and the euro. The EU made Europe safe for Germany or perhaps we should say it made Germany safe for Europe. Either way, it has been a major boon for Germany. The euro has been a godsend for Germany. By dint of being entwined with the other economies of Europe, the euro is undervalued as a purely German currency. The Germans have been telling themselves how hard they work and how they stint and save and strive to be competitive. But they have been overlooking how easy it is to be competitive when you have an undervalued currency. The great German export machine and the accumulation of the chronic German trade surplus and the high rate of German employment and the high German standard of living all owe much to currency undervaluation and certainly to the ability to sell easily in the world’s largest integrated market — the EU.

Van Rompuy needs to remind the Germans that it is not the future of Greece that is now on the line. It’s the future of Germany, and of the rest of Europe. It has been blindingly obvious from the beginning of the crisis that the solution is more, not less, Europe. The founders of the euro knew that a single currency without a single finance and tax authority was not a long term proposition. They bet that the evolution would be toward centralization of those functions at the European level. The details are not important, but one way or another there must be a European bond, a central backer of the European banking system.

To paraphrase Benjamin Franklin’s famous remark at the signing of the American Declaration of Independence, "now the Europeans must hang together, for, if they do not, assuredly they will all hang separately."

That’s the phrase or something like it that van Rompuy must find and use it to seize the day for the European project.