Why the EU will thrive on Greece’s troubles

Merkel says the Union is in trouble, but this is pure fearmongering designed to make people toe the line.

James Heartfield

Topics World

Without the euro there can be no European Union, warned German chancellor Angela Merkel, when it seemed as if the troubled Greek government might have to pull out of the single currency. Then her attempts to bar speculation against the euro scared off investors, causing it to fall further.

On top of the crisis in Greece’s public finances, the German chancellor’s unilateral actions have led observers to predict that some countries will have to withdraw from the single currency, and even that the union itself is in trouble.

But to think that the European Union will become weaker because of the crisis is to misunderstand what has driven it forward over the past quarter of a century. The European Union thrives on crises in the member states. It owes its existence to the failure of national polities, and it will accrue greater powers the more clearly the nation states fail to resolve the problem.

Already the European Union’s executive – the unelected European Commission – is drawing the lesson from Greece that it needs to take much greater control over the finances of individual states. On 12 May, economic and monetary affairs commissioner, Olli Rehn, said Brussels wanted to begin the earlier oversight from the start of 2011. The move would allow the commission and the European Parliament to ‘identify economic challenges for the EU and the euro zone’ at an earlier stage, Rehn told Die Welt.

Rehn’s assumption is that the Greek budget crisis shows that existing European oversight of spending targets is not enough. ‘Through the establishment of a “European Semester” for coordinating economic policy, member states will profit from an early agreement at a European level’, he said.

That the commission should be taking on greater powers seems surprising given the widespread rejection of further integration in 2005 – the last time that European governments asked their electorates whether they were going in the right direction. Back then, claiming the need to streamline union decision-making to cope with a greater number of member states, Europe’s political leaders tried to win support for a European constitution.

However, voter revolts in France and Holland scuppered the commission’s plans for its own, legally constituted independence, and then Ireland voted against the watered-down constitution that was presented as the Lisbon Treaty (having cast their votes ‘wrongly’, they were made to go back and do it again last year). French Socialist leader Segolène Royal was reported as saying ‘this referendum is bloody stupid’, adding: ‘We were bloody stupid enough to ask for one and Jacques Chirac was bloody stupid enough to call it.’ It seemed as if the European Union’s engine had stalled for good.

The elitist club of European policymakers and academics withdrew, commissioning studies into the mass psychology that led voters to reject them. In 2009, the German sociologist and union champion Ulrich Beck saw salvation for the European Union in the financial crisis: ‘I thought: my God, what an opportunity!… This economic crisis cries out to be transformed into the founding of a new Europe.’ Certainly, fears of economic uncertainty helped Irish voters to change their minds. If voters were not willing to embrace a positive case for Europe, maybe they could be terrified into giving up their rights to Brussels.

That the European Union is seeking to thrive on fear should not be so surprising. The great advance in European cooperation – the single currency: the euro – was brought about after one of the worst disruptions to economic cooperation. In the early 1990s, European nations had their own currencies: lira, franc, deutschmark, and so on. The agreement that the exchange rates should be kept stable broke down when governments fell out over how to deal with the economic recession. Japanese journalist Noriko Hama wrote a series of apocalyptic articles for the Mainichi Economist, published in a collection entitled Disintegrating Europe: The Twilight of the European Construction in 1996. But only three years later, eleven of the core European states had adopted the single currency – joined by five more, including Greece, soon after.

Crisis pushes the European Union closer, because it is in the end an institution of crisis management. The reason the modern European Union exists is to supplement the declining authority of member states. Greece joined the European Community in 1981 because its nationally based Keynesian Socialist programme was failing – and France pushed for ever-closer union in the 1980s for a similar reason. Germany needs the union because its national political institutions are ill-founded. Britain’s ruling elite has been more awkward in the past, resting more on national identification, but the collapse in respect for the political class has convinced them that they need the union quite as much as it needs them.

James Heartfield is a director of the development think-tank Visit his website here.

Previously on spiked

Sean Collins criticised Angela Merkel’s attack on short selling. He also discerned the next phase of the economic crisis in the travails of Greece, and slammed Obama’s decision to bash the bankers. Daniel Ben-Ami looked at what the Greek crisis has revealed about the Euro-elite. Guy Rundle reported from a troubled Greece. Mick Hume argued that the economic crisis has shattered the facade of European unity, and also asked what will happen to the UK economy when the state turns off the life support. Or read more at spiked issues Economy and Europe.

To enquire about republishing spiked’s content, a right to reply or to request a correction, please contact the managing editor, Viv Regan.

Topics World


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