Saturday, December 17, 2011

Musings on the Euro Crisis

Bench with Buoy, December 17

I've liked to snigger at the USA's apparent inability to govern itself out of a wet paper bag, in contrast to our competently-run social democracies on this side of the pond. The ongoing crisis of the euro has made it clear that I really don't have all that much to snigger about. This is a monetary crisis. It's about money. Money is not wealth. It's a representation of wealth. That means that there are technical solutions to it, whether it's about splitting up the euro into more reasonably functional currency areas, or coming up with a program to keep it together until the eurozone's economies converge enough to be one.

Yet we're clearly not able to come up with those solutions. We keep kicking the can down the road and hoping it'll go away.

I love the European idea. The EU and its predecessors have managed to bring an unprecedented period of stability, peace, and prosperity to what is historically probably the most war-ridden region in the world. Even now, we have countries queuing to join. It is a unique experiment in political history; a voluntary empire with no emperor and no single hegemonic people, family, religion, or political ideology. It's hardly surprising that it's not an easy thing to maintain, since we're in uncharted territory all of the time. I would really hate to see it go.

The EU can only function if it's democratically legitimate. Until now, this has been achieved—to the extent that it has been achieved—by making it a system of treaties between sovereign states, which are—in principle and, to a pretty large extent in practice, considering—democratically governed. The problem is that the EU has grown too big for this model. With 27 member states, the requirement for unanimity in all EU-wide decisions makes it practically impossible to govern. Yet there are situations that simply cannot be resolved without making decisions at the union-wide level.

This currency crisis, for example.

My big worry with the way it is being approached is that we've been drifting towards instituting precisely these centralized decision-making mechanisms without creating any mechanisms to ensure their democratic accountability. We know exactly what happens in this kind of situation. Corporate government. People with money will simply buy the levers of political power, and we will have governance of the banks, by the banks, and for the banks. That's great if you happen to be a banker. For the rest of us, not so much.

The whole point of democratic government is to provide a counterweight to unchecked economic and political power. It may not be a great way of picking honest and competent leaders, but it is the best way we have come up with to kick out incompetent and dishonest ones. I love Europe, but I love democracy more. We absolutely have to find some way of making it work without turning it into yet another permutation of corporatism. I don't really care all that much about how we do it. I'm willing to do my bit to pay for it.

Whatever we do, we must not sacrifice the European Union, which works, on the altar of the euro, which doesn't.


  1. First we need kick the UK out of the EU. They have been lurking in the sidelines, always wanting a slice of the cake, never committing and most importantly, blocking any further integration.

    They will be welcome to join later, but if most of the people in the UK want out of the EU, then by all means they should get out. Ridden by a nationalistic wave, hopefully they will learn the hard way that their empire is long gone and they need to EU to have a say in the world.

  2. I understood the UK only joined the EU to keep Germany down, Russia out, America in, and the rest squabbling among each other. They certainly haven't been playing a particularly constructive role. I think the main problem is that there are way too big differences about what the EU is even supposed to be, and there's even less overlap with UK ideas about it. For many Brits, the Continent is still "them."

    Personally, I don't see any huge problem with a multi-tier EU, as long as membership in any tier is open to any country that meets the (reasonable) entry criteria. UK and Turkey could be the outer tier, with a tightly-integrated nucleus—around Germany and France, maybe—as the inmost one. Governance could be a beast though.

  3. The EU suffers from a severe democratic deficit. Born as an trade treaty, it has grown into something else. The main issue is that EU parliament, which is elected, does not call the shots, but everything is still done as a bunch of treaties.

    The bottom lin is, either the EU becomes the USE or we have to substantially rethink how the EU works. The present halfway house is as bad as it might be.