The Guest Blog

By Andy Langenkamp

Owing to the twin political and economic crises, differences within Europe have widened yet in some ways, trends are converging. To start with the latter, this is not a positive development: northern euro countries are no longer immune to the crisis. Even growth in Germany has been minimal.

It is imperative that the EU becomes stronger and takes concrete steps towards a banking, fiscal, economic, and political union. However, in reality most member states are moving in the opposite direction. They want to limit the powers of Brussels and gain more autonomy. Significantly, in recent years the decision-making process regarding the crisis has shifted from the European Commission – the supranational body governing the EU – to the European Council, consisting of the national leaders.

Friction also exists between the need for rapid intervention (as the crisis can, potentially, spiral out of control at any moment) and numerous rules, laws, and procedures that are in the way of decisive action. The cases before the German Constitutional Court are a prime example.

Equally controversial is that the interests of global capitalism/the international financial markets and national politics are diverging. In a crisis, markets demand a different approach than the electorate and national (opposition) parties. Politicians are often caught between a rock and a hard place if they want to placate both markets and voters. For now, they are going down a road that makes many voters profoundly unhappy. Meanwhile, what drives the global markets is the loose monetary policy around the world; not enthusiasm about Europe’s political-economic trajectory.

All these tensions lead to schisms:

1) Between euro countries and the other EU states. Several non-euro countries within the EU have indicated they do not like the fact that small groups of Eurozone members are taking decisions that impact on the rest. One fear is that the sphere of interest of these “cliques” will gradually extend to other areas.

2) Between debtor and creditor countries. So far, this has largely been a North-South divide.

3) Between countries that are happy to take the lead in “two-speed Europe” and states that fear being left behind and marginalized.

4) Between Germany and other countries; the abyss between Berlin and the rest of Europe is increasing. Surveys indicate that the Germans are seen as the most arrogant and least compassionate Europeans (albeit extremely reliable). Presently, Germany is – partly against its will – the undisputed European leader. Yet it is clear that France, in particular, is becoming very nervous about the growing power chasm between Germany and its fellow Europeans.

Indisputably, the Eurozone has lately calmed down. This could well change before the year is out. Crumbling confidence in the EU will make it very difficult to justify a transfer of power to Brussels. Meanwhile, Brussels can only inspire confidence if it persists with the European integration project.

Plummeting faith in the national politicians and democracies is eroding Europe from the inside and thwarts a successful tackling of the crisis. Signs of this are political instability in Italy, while few voters trust the Letta government, which has barely taken office. Not to mention the corruption and abuse of power scandals, anti-democratic tendencies and government crises in Romania, Hungary, Bulgaria, Slovenia, and so on.

Another development that threatens to tear Europe apart is the anti-European course of the UK. The British were never big fans of the EU but their antipathy seems in process of becoming endemic. On top of this, a misguided strategy in the domestic EU debate has weakened the Prime Minister. Unless he is very careful, Cameron could go the way of his predecessors Margaret Thatcher and John Major, who were tripped up by inter-party quarrels about Europe. Of course it won’t do Europe any good if Britain becomes rudderless.

Finally, Germany’s increasingly isolated position is ominous. A virtually unbridgeable gap seems to have opened between Paris and Berlin. Not so long ago, little could happen without the approval (and material support) of the solid Paris-Berlin axis. Recently, France has mooted a number of proposals that were meant to tie Germany to a full-fledged union. However, Germany is clearly is not sold at all on further integration. The latter will take long and will probably require a lot of political capital. In short, Europe continues to struggle with Germany. As before, Germany seems to be outgrowing the continent.

A continent that will keep struggling with a political, economic, and social crisis as long as countries, and the EU as a whole, have to make do with – in the words of Ulrich Beck – pusillanimous politics instead of Great Politics.

Andy Langenkamp is political analyst at ECR Research and Interest & Currency Consultants. He is a former journalist who has written for the Financial Times, the Guardian, Real Clear Politics, Politico. He regularly blogs on financial and economic affairs on the Huffington Post.

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