Long-Term Questions for Short-Term European Strategy

By Joseph Wood

The financial crisis in Europe has merged with contemporary communications capability to produce an extraordinary quantity of commentary on the future of the euro and, by extension, the future of Europe. Most of the commentary focuses on what means will best prevent the worst economic consequences of the crisis, what measures would best inhibit the spread of the "contagion" from one potentially bankrupt nation to others, and whether the euro itself is even viable.

A few commentators have looked ahead to institutional reforms that might ensure the success of the common currency. Two presumptions seem to be common to most such analysis: that the euro currency project is critical to the progress of the European Union and the broader "European project" as a whole, and that such progress has generally come as a result of crises like the current one, so today's crisis is another opportunity. But there is fundamental discord over whether Europe's next steps should, like in many instances before, continue to strengthen European institutions at the expense of member states or whether the era of such centralization has ended.

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The institutional inadequacy of current arrangements to deal with the crisis seems clear. Some proposals for change seem to favor a form of "procedural democracy" with an emphasis on policy outcomes over democratic accountability. Dutch Prime Minister Mark Rutte, for example, has proposed the establishment of a new EU commissioner with extraordinary powers to approve the tax policies and budgets of fiscally troubled states whose profligacy threatens the euro. Such proposals suggest that some European policymakers see the future in deepening the EU's democratic deficit in order to reduce its fiscal deficit.

But surely that is the wrong trade-off. The broad history of the EU is one of increasingly centralized power in Brussels. That history has thus far served the original aim of Robert Schuman, Konrad Adenauer, and Alcide de Gasperi to integrate German economic power into a peaceful European order. But it has come at a price - a top-down integration that seemed intended to far surpass Schuman's vision of an EU that would "safeguard the diversities and aspirations of each nation while coordinating them in the same manner as the regions are coordinated within the unity of the nation." Now, though, there is little popular appetite for deepened integration or centralization; the underlying trends, in fact, point in the opposite direction, toward a desire for "renationalization" of power.

And with Germany seemingly positioned to decide both fiscal and monetary policy for the continent, checked mainly by France, even the original objective of containing German economic power is now in doubt. Combined with both east-west and north-south tensions within the EU today, the current crisis - one where Berlin and Paris comprise the center rather than Brussels - demands a return to the most fundamental questions for Europe.

The present moment calls for institutional reform. Reacting to such calls while keeping an eye on the next election and resisting short-term calculations to consider long-term goals are daunting tasks for elected leaders. Commentators and thinkers who really want to contribute to a meaningful debate on European institutional reforms might offer thoughtful answers to several basic questions:

• What are the fundamental purposes of the European project? Peace and prosperity seem obvious. Democratic accountability seems essential if inconvenient. How does the preponderant role of Germany and France affect these purposes?

• Is it time to think again about removing competencies from Brussels in favor of a Europe of nations, something closer to Schuman's original vision? Does the European project require further centralization of power? What is the best application of the principle of subsidiarity, by which the EU claims it intends to deal with policy issues at the lowest effective level?

• Or is it time instead for a great leap forward to a United States of Europe, federalizing debt and simultaneously introducing political structures that ensure democratic accountability and preserve subsidiarity?

• Similarly, after the disastrous wars of past, what is the place of a constructive nationalism in Europe? Efforts to foster a grand European identity have failed and, together with the transfers of sovereignty and power to a distant and abstract European center, have alienated European publics. How does one balance legitimate national identity with the kind of coordination that the EU's founders expected?

• And, from the western shore of the Atlantic, what kind of Europe should the United States want?

Most fundamentally, Europe must decide how to balance its economic aspirations with political institutions that ensure that states serve their people, rather than the reverse. The alternatives of China, Vladimir Putin's Russia, or Turkey, with economic liberalization tied to limits on political liberty, are available as models. But Europeans on the whole see little attraction in the anti-democratic path. Europe should use its grand heritage of political thought to devise better, enduring solutions to the current crisis. Let the real thinking begin.

Joseph Wood is a Senior Fellow at the German Marshall Fund.

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