John Menadue. Is the European Project finished?

Jul 7, 2015

Perhaps the Greek crisis will force a fundamental rethink and Europe will find the way to rekindle again the idealism and hope that gave rise to the European Project in the aftermath of WWII.

By any means ‘Europe’ has been a remarkable success in social development, human rights, economic growth, the mobility of people and capital – but most importantly of all, a seventy year period of peace. After centuries of war, mainly religious wars, followed by WW1, Hitler, the Holocaust and Stalin, Europe has been at peace.

The founders of the European Project spoke with great idealism of ever-closer union in Europe.

But the signs are not good today. This is highlighted particularly by the political and moral gap between the ‘hard-working’ Germans, the ‘lay-about’ Greeks, with France looking more insipid every day. The early success of Europe depended on France to balance the power, strength and even threat of Germany.

Germany’s reputation and its development in almost every way have been remarkable since WWII. That success has been in part due to its own efforts, but also through the generosity of the US and others in forgiving Germany its sins and its debt. The allies learnt from Versailles after WWI that punishing a defeated Germany only produced more tragedy.

Unfortunately today Germany shows all the signs of bullying Greece for its mistakes and repeating the mistakes of Versailles.

In an interview a few days ago with German newspaper Die Zeit, Thomas Picketty called for a major conference on European debt and emphasized that Germany in particular should not withhold help from Greece. Picketty said

‘My book (Capital in the 21st Century) recounts the history of income and wealth, including that of nations. What struck me while I was writing is that Germany is really the single best example of a country that, throughout its history, has never repaid its external debt. Neither after the first nor the Second World War. However, it has frequently made other nations pay up such as after the Franco-Prussian war of 1870 when it demanded massive reparations from France and indeed received them. The French state suffered for decades under this debt.’

In the current fevered atmosphere the signs are not good with the European Union, the European Central Bank and the IMF, together with Germany, bullying Greece to comply with their austerity program.

The European Project has been littered in recent years by serious mistakes and problems

  • The Euro is a major problem. It is very difficult to envisage how a monetary union can work effectively without a fiscal union. The result has been that Germany and Northern European countries have benefitted from a weak Euro at the expense of Greece and other Southern European countries.
  • There is widespread unemployment particularly in Southern Europe which has been foisted on the Greeks, Spanish and others in the name of budgetary reform and austerity. The message has been clear both explicitly and implicitly to the Greeks – change your policies or we will destroy your government.
  • In the last few days the European Central Bank has cut off Greek access to additional funds and helped precipitate the panic in Greece. The Greek Central Bank has worked in league with the European Central Bank.
  • It wasn’t just irresponsible borrowing by the Greeks that caused the problems. Ther was irresponsible lending by the banks and companies such as Goldman Sacks that helped Greek debt-managers manipulate the debt figures. The financial sector must be contained.
  • Political extremism on both the Left and the Right is today flourishing in Europe. It is no surprise.
  • Quite contrary to what Presidents Regan and Gorbachev agreed, NATO has extended itself eastwards to the Ukraine and the border with Russia with inevitable dangerous consequences. Have Europe and NATO forgotten WWII and the tragedy and losses on the Eastern Front?
  • The ‘Little Englanders’ in the UK are now reasserting themselves with David Cameron proposing a referendum in 2017 on possible UK exit from the European Union and with the UK Independence Party polling 12% at the last general election.
  • Hungary is planning to build a fence along its border with Serbia.

The fraying of Europe is obvious. It shows not only in political but also has a moral dimension. The Italian Prime Minister, Matteo Renzi, recently commented on Europe’s failure to properly address the difficulties of thousands of refugees coming to Europe. He said ‘If this is your idea of Europe, keep it to yourself … You do not deserve to call yourself Europe. Either we have solidarity or we are wasting our time.

The Germans seem to have ignored the advice of former German Chancellor, Helmut Schmidt, three years ago when he said ‘If we Germans allow ourselves to be seduced into claiming a political leading role in Europe or at least playing first among equals, based on our economic strength, an increasing majority of our neighbours will effectively resist this. The concern of the periphery about an all too powerful European centre would soon come racing back. The possible consequences of such development would be crippling.’ That crippling is occurring today and Angela Merkel doesn’t seem to understand.

Can we dare hope to see again the moral and political leadership that we saw from people like Helmut Kohl, Helmut Schmidt , Francois Mitterrand and many more. None of them had forgotten the horrors of WWII and set about with idealism and hope to build a new Europe. The current generation of leaders has never known the travail that these earlier leaders experienced.

This is about much more than Greece and its debts and austerity. But hopefully this crisis will force European leaders to show the courage and foresight that its forbears showed decades ago. The European Project is in trouble, but it is worth renewing. Will the bankers and small-minded get out of the way? With no vision from their leaders, the people of Europe are suffering.

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