Europe—the European Union—is today in a bad shape (as is the world). Jean-Claude Juncker, president of the European Commission, is the first to acknowledge the severity of Europe’s problem. He has for years been striking an increasingly apocalyptic tone: two years ago he thought Europe in 2013 was like Europe in 1913, in other words on the eve of a Great War driven by nationalist quarrels; today he claims that Europe lacks both Europe and union. There is in short a collective hopelessness, a lack of vision of how all the host of individual problems and crises that have built up cumulatively since 2008 could possibly be resolved.
In obvious ways, the crises originated outside the EU, so sometimes Europeans like to reassure themselves by saying that it’s not all their fault. The debt crisis that started with Greece in 2009–10 and then threatened Europe-wide contagion was a secondary consequence of the 2008 global financial crisis that unambiguously started in the US and reached its highpoint with the Lehmann Brothers collapse. The security threat following Russia’s annexation of Crimea and their launch of a de facto invasion of eastern Ukraine in 2014 had its origins in Kremlin policy and in a turn to a confrontational posture with the West that started with the Georgian War—also (perhaps not just coincidentally) in 2008. There is an environmental crisis—seen most obviously in CO2 emissions—exacerbated by the rapid industrialisation of so-called emerging markets. A debate about nuclear energy followed from the Japanese nuclear catastrophe in Fukushima. And there is a refugee crisis borne of civil war and state failure in Somalia, Eritrea, Libya, Iraq and Syria. The repercussions—or political fallout—produced a divided European response, and policy was formulated along quite divergent national lines.
The euro crisis can be read as a conflict both between alternative French and German visions of how economies should be managed and between Europe’s north and south. The Baltic states and Poland were desperately concerned by the Russian security threat, while southeastern European states were more worried about the idea of a rupture with Russia. France and Germany treat the energy issue, the CO2 debate and the lessons of Fukushima in different ways. Eastern Europe and the UK are treating the refugee crisis very differently from Germany or France.
It is easy for Europeans to blame someone else for their problems, but one of the main claims—or boasts—of Europe at the height of the continent’s self-confidence was that it would offer a framework of stability for the rest of the world. At the moment, the European model is looking sadly frayed, and that has bad implications for regional stability in other critical areas, including East Asia but also the Middle East.
In addition it is clear that there are many other divisive issues that are clearly homemade: the design flaws or structural defects of monetary union, the aging demographic profile of many parts of Europe, the weakness of growth. In general there is a problem of coordinating responses to these diverse challenges and building an effective community in which the substantial uncertainties and risks—economic, environmental, social, political—can be mutualised. At the same time, the mutualisation of risk cannot succeed if the benefits and burdens are distributed so as to create permanent gains or losses for parts of the Union.
Economist and political scientist Mancur Olson identified what he termed a logic of collective action, in which powerful sectoral groups frustrate attempts to find an overall collective solution that corresponds to a general or over-arching interest. His analysis offers a helpful way to understand Europe’s contemporary stasis. Obviously the complex political construction of a mechanism for integrating and coordinating the positions of 28 national governments lends itself to blockage by particular interests. In modern Europe, there is really no clear way of articulating and politically representing the general interest of Europeans.
Some contemporary issues that have been tearing Europe apart should not in principle be difficult to resolve if they are seen in aggregate terms. The eurozone as a whole has a lower public sector deficit (as a share of GDP) that the US or the UK or Japan: for 2015 the i m f estimates (April 2015 World Economic Outlook) are 2.3% for the eurozone, but 4.2% for the US, 4.8% for the UK and 6.2% for Italy. The net debt levels show a similar position, of greater European sustainability: 69.8% of GDP for the eurozone, but 80.4% for the US, 82.6% for the UK and 129.6% for Japan. Few outsiders argue that the US or the UK have an impossible fiscal position. Similarly the EU with a population of over 500 million should not have a problem integrating much larger numbers of refugees than the 160,000 that the European Commission hopes to spread throughout Europe. Energy coordination and the greater integration of energy markets would deal effectively with the security threat.
Similarly the EU with a population of over 500 million should not have a problem integrating much larger numbers of refugees than the 160,000 that the European Commission hopes to spread throughout Europe.
However, when these same issues are treated exclusively within the framework of national politics, they look insuperable. When the problem is framed nationally, no one can produce an answer. The clashes between national approaches generate conflicts that threaten to tear Europe apart.
After 2008, national politics have become more important for two reasons: as an emotional reaction to crises, and as a financial or fiscal reaction that then shapes the kind of response to the challenge that can be envisaged.
First, then, there is a new unease or uncertainty about the world as a whole, specifically about the consequences of globalisation. National politics are sometimes presented as a way of defending local populations against threats that come from outside. The state appears a defense mechanism in the age of globalisation.
Globalisation pulls people together over long distances. But the participants do not always like the results. They find the cultures of others too strange: there are different cuisines, different languages, different religions. Islam in particular looks strange to many modern Europeans, and its theocratic tendencies run counter to expectations of a secular or non-religious state. There is as a consequence a strongly national element to the populist parties that have arisen in the wake of the financial crisis and the euro crisis.
Globalisation inevitably exposes people to problems in faraway countries. They often respond by thinking of ways to be more self-sufficient. In the twentieth century, the most common form of the response was to demand trade protection, but that is now a more remote threat—because large numbers of consumers are used to the idea of cheap clothing and electronics.
But the story of bad reactions to globalisation is not just confined to trade policy responses. The most obvious human side of globalisation is the way it generates large flows of people. In some of the large emerging markets that are hitting the economic buffers, the political response is that a new or more intense authoritarianism could cure the problem of dysfunctional economics. There are also more wars. As a result many people in those countries are afraid. And people who are afraid are even more inclined to move.
The side of migration that today attracts the most headlines is the plight of refugees from areas of conflict—from Syria or Libya. But that flow is also accompanied by a surge of more economically motivated migration from the Balkans and West Africa. It is also harder to distinguish the motives, as the dramatic population flows are destabilising political structures in wide areas and making for greater conflict and persecution.
Then there is another surge that follows from the destabilisation of emerging markets. As Brazil, China or Russia—not to speak of the Middle East—become more unstable, the mobile and wealthier population wants to rescue as much of its assets as possible. The search for security in bad times—both economic and political security—drives a
surge in real estate prices in global safe havens such as New York or London or Geneva. That makes those cities look very glamorous and dynamic, but it also generates huge difficulties as the local population finds that they also are more expensive. Impossibly high real estate prices in the centers of these global cities mean longer and more difficult commutes, more crowding and a lower quality of life.
Secondly, there are more immediate financial reasons why a crisis makes people look more at the national political framework. Managing the aftermath of major financial crises, as opposed to trying to prevent them from developing, always involves the mobilisation of substantial fiscal resources. That task inevitably remained in the hands of national governments, since the EU had only a very small fiscal capacity of its own. So inevitably, when it comes to demands for state action, people focus on national states, and these are the wrong framework for dealing with many of today’s problems.
Focusing on the national unit and its fiscal capacity has had further consequences for the way in which people view Europe. Not all 28 member states are the same size; and in the course of the crisis, it has become clearer that many solutions are hammered out essentially between two countries, France and Germany; and even that Germany is substantially more powerful and effective than France. So a great deal of the crisis turned out to be a debate about the new German question: about the extent of German power, and whether or not modern Germany had the capacity or the willingness for leadership in Europe. Almost every sort of German leadership is deeply problematic, however. Thus the nationalist right in other European countries will even see Germany’s positive response to the refugee crisis as an egotistical attempt to exploit cheap labour opportunities following from increased migration. Marine Le Pen of France’s National Front party speaks of Germany creating a new empire based on slave labour.
There is in other words a need for a mechanism for seeing the big picture issue: for zooming out from the obsession with the national and onto the aggregate, to the big picture, to Europe considered as a whole. But how can Europeans get this larger picture, and how can they stop seeing the world primarily in terms of national interest, national advantage and national egotism?
That is where some more unconventional thinking is required, and it may be that the young are in a position to break out of established modes of thought.
The papers presented at the Allianz Summer Academy 2015 by the five different university teams all address different aspects of Europe’s contemporary malaise. Bocconi examines the roots of the economic crisis. Uppsala deals with the absence of a social element in the story of European integration. LMU-Munich asks how the challenge from radical populist parties—especially (but not exclusively) from the nationalist or hypernationalist right—may be defused. Budapest’s Central European University gives a striking example of how Europe—and especially national governments—are mishandling the issue of migration and refugees. New Jersey’s Princeton looks at how a gerontocratic Europe is marginalising and alienating its youth.
Some of the ideas presented here concern the institutional arrangements for making European politics: for instance, expanding the use of electronic voting as a way of shifting the way in which the opinion-forming process runs. Others involve increasing opportunities for Europeans—especially young Europeans—to move, so that they will see problems from different, unfamiliar and other perspectives.
The deep economic, social and political crisis has produced a vicious cycle that grips the imagination and confines the capacity to act. Each new element of the crisis prompts thinking that the member states should act as a defensive carapace; but each worsening of the crisis also demonstrates the ineffectiveness of individual member states in producing effective responses. So politics becomes increasingly radicalised and increasingly ineffective.
From the time of Jean Monnet the technocrats of European integration envisaged a process that was driven forward by crisis. Each new crisis would generate a new mechanism for resolving it, and greater integration, cooperation and coordination would simply follow through an automatic and inexorable mechanism. That vision failed to take into account the ways in which really severe crises generate mechanisms that intensify rather than diminish conflicts and clashes.
An alternative to the destructive capacity of crises can only emerge in a discussion that enlarges and widens the horizon. That cannot follow from institutional tweaking. It requires a new imaginative leap.
Professor Harold James
(Director, Program in Contemporary Politics and Society, Princeton University)