Day after day the financial markets have punished Europe for chronic indecision and cried out for a big bazooka to end the uncertainty. Economists have warned against rigid austerity measures that would make recovery impossible, and pictured a global depression in case of a euro break-up. Reports of riots, protests and the rise of fascist parties in many European countries have sought to remind us of the dangers we face if the situation is not resolved.
Overwhelmed by the ruthless pace of the stream of news on the impending financial and political collapse, I felt utterly powerless. So I petitioned the European Parliament. As I did so, I was fully aware that my pathetic petition (for eurobonds and growth, of all things!) would be left at the bottom of the pile. The effect of the policies pursued by ‘Merkozy’ will have an impact on my family and me, not to mention every other citizen of Europe. Yet, the media have presented the battle of the euro as a matter of ‘national sovereignty’, where Germany has her way, France cosies up to her not to be downgraded, Britain watches from outside and the rest submit to mighty Germany. This picture misses three aspects: the politics, the economy and democracy. It also exaggerates the very thing that is creating the problem: national sovereignty.
Under the banner of national sovereignty, Merkel and Sarkozy have been pursuing their own private interests (re-election) and a politics that dictates fiscal rigidity at the expense of growth. Merkel has been waging a financial warfare against the Eurozone ‘peripheral countries’ as a show of strength that plays well with her electorate, and to get countries into line. She refused to bail out the rather modest Greek debt to ensure that reforms are put in place. She let banks and traders shed Italian bonds, which resulted in the toppling of its government. Merkel’s ideological attachment to fiscal probity has drained the markets of confidence and liquidity. It has left Italy, notwithstanding its primary surplus, as a most illustrious victim. Merkel’s policies are far from neutral and are not what economists prescribe. They are also shrouded by the pernicious ‘tale’ of fiscally virtuous and industrious northern Europeans and profligate and indolent southerners.
This rampant petty nationalism that has been tearing Europe asunder plays on the fallacious notion that the success of the rich is imputed to virtue and hard-work, whilst the ruin of the poor is due to their laziness. This is not to absolve southern states of the mismanagement of their finances, their populism and their systems of patronage. However, culture and society do not drive the economy and, above all, are far from static.
This economic notion of ‘the strong is right’ is often supported by the misinterpretation of Weber’s Protestant Ethics and the Spirit of Capitalism. Accordingly, prudent Protestants of northern Europe are better at business than Catholic southerners. Weber would shudder at such a claim. Put very simply, he saw an ‘affinity’ between Calvinist ethics and capitalist ethos. Capitalism requires ‘rational work’ (accumulating instead of spending) to create capital. Protestants, believing in (predestined) salvation, are moved by a ‘salvation anxiety’ to work in a systematic fashion. The ensuing economic success becomes a sign of salvation. The misappropriation of Weber which paints a Europe of virtuous north and sinful south obscures the political colour of Merkel’s action. She might have popular support for not giving money to southern states, but she is not protecting the interests of her own citizens. A euro break-up would be more disastrous for Germany than southern Europe.
The ‘tale’ also obscures the fact that a capitalist economy functions through uneven development, where those with capital and leverage exploit their position to advance over others. Inequalities might be inevitable, but the point of a fiscal and political union should be to rectify structural imbalances so that the ‘weak’ have more opportunities to compete. The lack of competitiveness of Italy and Spain, for example, is partly the result of excessive German surplus and the not-so-fair competition where original goods are effectively plagiarised. Merkel might distrust the financial markets, but they have done more to push for a Union than the successive dead-end deals to save the euro. Even the threat of downgrading France and Germany was yet another call for concerted action. In front of a globalised economy, Europe needs to unite to remain competitive, but also to transform our institutions and politics to build a fairer Europe.
Europe has applied a social model of capitalism that seeks to wed fairness with prosperity. It is far from perfect, but should not be the victim of narrow-minded politics. As long as we hold tight onto the myth of ‘national sovereignty’, our rights, like my petition, will be at the bottom of the pile. Sovereignty should be of the people of Europe. European institutions are in their infancy and cannot, as they stand, protect the interests of European citizens. But it is nation states that have emasculated European institutions. What is often branded as the ‘national interest’ is nothing but a justification for the pursuit of internal politics. Cameron’s concern with his own party’s ‘Westphalian’ world-view has pushed him to wield the veto and resulted in Britain not taking any of the decisions but suffering all the consequences. Merkel’s ‘nein, nein, nein’ has asserted old-fashioned national sovereignty over and above the rights and interests of all European citizens, Germans included.
The narrow game of politics precludes a democratic Europe. If nationalism wins over, we are condemned to political and economic chaos. The economic solutions to rescue of the Eurozone are not lacking: what is missing is the vision for a fair and prosperous Europe. The crisis is an opportunity to build a more equal and prosperous Europe. The odds are against us, but we have a moral imperative to protect our rights and freedoms. We cannot wait for the institutions to be reformed, or for politicians to be statesmen. Ddemocracy is not something you wait for to be served on a plate, when institutions are reformed, when politicians are better, it's something each one of us has to fight foremocracy is not something that is served on a plate, but something each one of us has to fight for.
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