The leader in this week’s Economist advocates a form of financial federalism as a sort of Plan B to combat the economic crisis. Europe has moved far from the “deepening vs widening” debates of the mid-nineties. After Maastricht the questions being asked were mainly with regard to the various geometries that the next step of integration would take and how far would states go in relinquishing sovereignty to a higher order. Then came the euro.
The launching of the single currency was meant to be a grand step in the wider project of integration. A european construct that had been built on the foundations of economic incentives and integration could not but rejoice in having its own single currency. One interesting remark in the Economist appreciation of the causes behind the euro crisis was with regard to this very moment of crystallisation – when Europe got its own coin.
In fact the euro came around a good sixty years into the roller-coaster ride that was gradual european unification. For most of that sixty years Europe had been built on the safe assumption that the project was one very good way to avoid the return to the bad habits of internecine warfare that had plagued the old continent from time immemorial. More importantly the constitutive demos of this project could be sold a series of integrative steps without having too much of a say in it.
The post-war generation did not need reminding that having the Germans and French sitting at a table discussing mutual improvement was much much more preferable than Blitzkrieg and the travails of la resistance. Up until the early nineties this meant an institutional construct that had glaringly obvious deficiencies in its democratic structures. The symbiosis between Council, Commission and Parliament together with the occasional wink from the court in Luxembourg delivered results – top among which was the huge relief that this was an ever growing club of nations NOT GOING TO WAR WITH EACH OTHER.
By the time the euro was launched the face of the demos had changed radically. Old threats and bogeys had either been long forgotten or been dropped along the way. 1989 and the disappearance of the big menace behind the Iron Curtain were also factors that distanced the link between the benefits of mutual cooperation on the one hand and the benefits of cooperation on the other.
The euro was born on the brink of world economic meltdown. A post 9/11 US was also reeling from its failed financial bets and the European crisis followed suit in the second half of the first decade of the 21st century. Europe’s baby was not exactly a crowd pleaser. The demos could only associate the euro with trouble – trouble of the worst kind that takes money out of pockets, destroys jobs and voraciously devours any dreams of prosperity,
The challenge of the European union and its leaders is to continue to sell the project for its benefits beyond the facile association with euro tinged misery. From Greece to France to Malta whether the demos will be able to relatch to a promise and a new european dream will depend on how the plan for the future is revealed and sold.
More importantly it depends on whether there is a plan that involves the kind of cooperation and integration that made the first half-century of European union such an outstanding success…. in spite of the feelings of doom that are all-pervading right now.