The eurozone: ‘this machine from hell’

There was a rather silly documentary hidden away on BBC4 on night last week all about the crisis facing Europe. Called The Great European Disaster Movie and set in a not too-distant future after the collapse of the EU, it featured an archaeologist (played by Angus Deayton) on a flight to Berlin beset by a menacing storm, explaining to a little girl what the European Union had been. These unconvincing sequences were intercut with case studies of individuals in 2015, in different member states, affected by the present crisis.

Podemos demo filling the Puerta del Sol. Madrid, January 31, 2015

In his latest column for the Guardian, Timothy Garton Ash argues from a similar position, but in a much more reasoned manner. His fears for the future of the EU are worth paying attention to because, as he wrote in a column at the start of the Greek crisis back in 2011, ‘for all my adult life, I have been what in England is called a pro-European or Europhile’. My own experience has been similar; as I wrote here in 2012:

Through the 1990s and into the new century, I taught European Studies, and in that heady decade between the fall of the Berlin Wall and the launch of the euro, I accompanied young students on educational trips to Brussels and beyond, visiting the European Parliament and other EU institutions, absorbing the lessons of the past at the First World war sites of northern France and Belgium, and encountering the signs of Europe’s 20th century nightmare in other places.  With those ghosts at our shoulders, it felt intoxicating to be able to cross frontiers unchecked, sailing past boarded-up border posts, carrying bright new euro notes and coins that could be spent anywhere.

But, I continued three years ago, today there are no illusions:  ‘Across Europe, the EU has been transformed in the minds of voters everywhere into an undemocratic regime of bureaucrats imposing spartanism on the less fortunate in the name of the rich and the powerful.’ But, should we hold on to the original dream of an ‘ever-closer union’ – or, let it die with the neo-liberal ‘machine from hell’ that is the eurozone (as characterised by a senior German official, quoted by Garton-Ash)?

In today’s article, Timothy Garton-Ash begins by quoting Angela Merkel: ‘If the euro fails, Europe fails’. His analysis is more cautious:

There is a much higher chance that it will grind along like a badly designed Kazakh tractor, producing slower growth, fewer jobs and more human suffering than the same countries would have experienced without monetary union. However, the misery will be unevenly distributed between debtor and creditor countries, struggling south and still prospering north.

Garton-Ash is surely correct when he writes:

The structural problem here is that the monetary area is European but the democratic politics are still national. It is not that there is nothing that could be done, if the politics allowed it.

It’s obvious that Timothy Garton-Ash is no fan of the eurozone, thinking its hasty establishment in the 1990s was a mistake. The eurozone could be saved, he suggests, in a way that didn’t grind the faces of the Greeks, Spaniards or Irish by agreeing the kind of fiscal transfers from richer states to poorer ones that you have inside a proper federal union such as the United States. But, ‘in creating a monetary union without a fiscal or political one, Europeans put the cart before the horse – and now the horse is not ready to get in front of the cart’.

Syriza leader Alexis Tsipras celebrating victory in the Greek general election

‘We don’t change policies depending on elections.’

The problem lies with what, for years now, has been termed in the text books the ‘democratic deficit’.  The EU is, in Garton-Ash’s words, ‘a paternalistic, top-down’ version of European integration – now challenged by the Syriza victory in Greece, and the likely triumph of Podemos in Spain’s election later this year. Garton-Ash highlights the attitude problem among the technocrats and politicians imbued with neo-liberal ideology who run the EU today with an alarming quote:

Given the choice between democracy and a paternalistic, top-down, Euro-Leninist version of European integration, I will choose democracy every time. The Finnish vice president of the European commission, Jyrki Katainen, responded to Syriza’s election victory by saying, ‘We don’t change policies depending on elections.’ Oh yes you bloody well do. It’s called democracy and it’s Europe’s greatest political invention. The trouble is that the structural problems of the eurozone require a transnational European democratic solidarity of fellow citizens which does not exist between different nationalities in the eurozone, and is not in prospect any time soon.

This is exactly the problem I identified the last time there was a Greek crisis, in February 2012:

Imagine that this is us: scrutineers from the European Union move permanently into our government departments; international financial institutions insist that our constitution is rewritten to make servicing our government debt the priority; those institutions stump up a fund to bail out our public debt, but pay the money into an escrow account, releasing  funds only under the supervision of the International Monetary Fund, the European Union and the European Central Bank, and on condition that key public services are privatised, wages and pensions slashed and conditions of service torn up.

This is what Greeks are waking up to this morning, now that the eurozone finance ministers have agreed the rescue deal for their country’s debt bailout.  It means that Greece is now ‘independent in name only’, colonised and policed by the richer members of the eurozone.

So here we are, the can kicked another three years down the road. How much longer can this go on?  Quite a while, suggests Garton-Ash:

And so we will struggle on, torn between national politics and European policies, while the monetary union that was meant to unite Europe pulls it apart. But the torture will be slow. In the countries that are suffering most from this “machine from hell”, as one senior German official has described the eurozone, there is still a passionate determination to stay “in Europe”.

It’s a powerful article, albeit that it ends rather limply:

What then? My heart does not like what my head is telling me. But it is still up to us, and there is still time to reverse the trend. Can Europe’s 89ers – the generation born around and after 1989 – generate the political imagination and will that our current politics are failing to produce?

Not that I blame him: to be pro-European today is to cling on desperately to a dream. A decade or more ago, there seemed to be a strong case for arguing that the supranational structures of the EU were the only way that national or local populations could retain sovereignty over their territorial affairs and interests, under pressure from the forces of globalization (large multi-national firms, outsourcing of labour, mass migration, ecological disaster, climate change and so on).  That case is still valid today as nation-states increasingly fail to protect their citizens from the depredations of globalisation – more so in the current global recession.  National governments are failing to effectively regulate financial systems, protect the environment, or narrow the widening gap between the rich and the poor, the strong and the weak.

But now, in response to the impact of austerity policies, citizens are shifting towards the view that the only way that their interests can be protected is to bring decision-making back home (see: Scotland, Catalonia, the French Front National, UKIP). It’s a seductive banner, but can we retreat into our own little enclaves and still be able to tackle the problems created by the global muscle of powerful banks and multinationals?

See also

• Greek crisis: the challenge to European integration (here, Feb 2010)
• We are all Greek now (here, Feb 2012)
• The dream is over: what kind of Europe is this? (here, Feb 2012)
• Those gloating at the eurozone’s plight should be careful what they wish for: Timothy Garton Ash (Guardian, 2011)
• Europe is being torn apart – but the torture will be slow: Timothy Garton Ash (Guardian, March, 2015)