Cooperate or Fail! The Way out of the Euro Crisis

Ulrich Beck: The Euro Crisis

THE EURO is burning. Where are the European intellectuals clamoring to offer an enthusiastic defense of the unfinished project of the European Union and its historical achievements in its hour of need? Where are the intellectuals arguing against the EU critics’ national misunderstanding? This cadre has no members.

Yet the situation is rapidly coming to a head. The member governments of the European monetary union face a decision of principle: either to cooperate and jettison the self-delusions of national politics or to accept the failure of the European experiment. Either economic integration or disintegration! A strong and stable euro requires the political will to extend the policy of peace into the economic realm and to use the mechanisms of economic policy to master the impending crises.

What is blocking Europe? The neoliberal self-delusion: the assumption that the economic integration of Europe is sufficient. Not only is more extensive social and political integration superfluous, according to this conception; it is even harmful. Europe should be nothing more than a huge supermarket–though a supermarket with a halo. European neoliberalism ultimately claims to be the better socialism, because overcoming national and global poverty and creating a more just world is possible only by means of free markets.

That we are dealing here with a self-delusion of the European elites is shown by two contemporary developments. The first of these is neo-liberalization, and the second is neo-nationalization. The interdependence of these two is mostly ignored by these elites. When Viktor Orbán’s government denies freedom of the press in Hungary; when the Sarrazin controversy gives voice to “democratic racism” in Germany; when an anti-immigrant party shares power in the Netherlands; when Berlusconi, in spite of his escapades, continues to enjoy widespread popular support in Italy–all these are side effects of neoliberal policy. A process of modernization has been unleashed under the banner of “market integration,” obliterating borders and principles and challenging the national foundations of parliamentary democracy, the welfare state, and the class compromise. The result is widespread fear.

The euro crisis is homemade. The neoliberal project is dominated by “negative integration”: market barriers are being torn down even though neither European nor national policy has the necessary instruments to counteract the resulting financial risks. The Brussels version of Europeanization is a failure.

With the euro crisis, the national self-delusion that there could be a “return” to the nation-state idyll in the fully Europeanized societies and states of the EU is rapidly gaining ground. And it hasn’t captured only the duller, reactionary imaginations. Even highly educated and cultivated minds and sophisticated political theorists cling to this idyll. While Europe and its ex-nation-states are interweaving, commingling, and cross-fertilizing, so that there is not a single “Europe-free” corner left in Europe’s ex-national societies, nostalgia for nation-state sovereignty holds greater sway than ever. It is developing into a sentimental ghost, a rhetorical habit, a refuge for the fearful and the disoriented. But there is no way back to the nation-state; all the European actors are bound into a system of legally regulated dependencies, from which they could detach themselves only at extremely high cost. After half a century of Europeanization, individual states and societies are capable of acting only within the European synthesis.

There is still hope for Europe, but only if it finally manages to escape the false alternatives bedeviling European political common sense. The customary line of argument runs as follows: either a “United States of Europe,” in the sense of a federal super-state, develops, in which case there are ultimately no national member states; or the national member states remain the rulers of Europe, in which case there is no Europe. This way of thinking is governed by the principle that Europe’s gain is the nations’ loss. We are trapped in this false dichotomy.

What is actually meant by the goal of a “European economic government”? French President Nicolas Sarkozy supports it; German Chancellor Angela Merkel, at least until very recently, has opposed it. Would this be a “supernational” European government, a United States of Europe? Would it involve the coordination of national governments on the intergovernmental model? We should consider a co-national economic government that aims neither to be a European super-state nor merely to coordinate the economic policies of the nation-states, but which instead renegotiates the relations between Brussels-Europe and the member states in accordance with the model of “cosmopolitan Europe.” This model would be based on a “Declaration of Interdependence” (not independence!). Global problems give rise to new kinds of transnational commonalities. Interdependence is not a scourge of humankind but the precondition of its survival.

The most prominent historical example of successful cosmopolitan European policy is Willy Brandt’s and Egon Bahr’s “German Ostpolitik” during the Cold War. The political magic of their formula “change through rapprochement” gave the policy of détente majority appeal in conservative Germany. Among its presuppositions was the balance of terror, the “atomic stalemate” that gave rise to a “cosmopolitan community of risk” and made the wall of East-West opposition permeable to forms of “humane relief.” In the current euro crisis, the nuclear threat has been replaced by the financial crisis and the threat to humanity from climate change. The parallel solution, pointing a way out of the euro crisis, can be described this way: anyone who wants national stability and security (social, financial, and environmental) must practice European solidarity. What does that mean in concrete terms? Here are four proposals:

1. Eurobonds. The EU must decide to save states instead of banks. Jean-Claude Juncker recently proposed creating European bonds. That is a step in the right direction: national stability cannot be achieved without European solidarity, and European solidarity cannot be achieved without national stability. The partial Europeanization of national debt default risks makes both things possible, by basing financial sovereignty on a European stability and growth pact.

2. Extending macroeconomic cooperation. Given the dramatic extent of public debt, persisting in the current policy of forcing heavily indebted states to make drastic reductions in public spending–wage cuts, reductions in pensions, and so on–will fail to achieve the goal of debt reduction. But it will fan the flames of social unrest in Europe (vide Greece, Ireland, and Spain). To date there is no authority or power within the EU that could prompt individual member states to undertake concerted measures to counteract this dynamic of disintegration, which threatens to undo what the EU has accomplished so far.

3. A European budget. This would not be financed by contributions from national member states. A European budget would have to be financed through taxation. Such a miracle could be achieved by introducing in Europe what has been rejected at the global level, namely a tax on financial transactions. This could finally put an end to the absurd tax competition between individual European states, whose only beneficiaries are transnational corporations.

4. The Europe of workers. By pursuing these policies, European politics would acquire a “genuine added value”–the creation of a social Europe. The EU would cease to be the bureaucratic monster threatening to rob workers of the very basis of their economic existence. It would become a Europe that promises and delivers greater social security for workers plagued by existential anxieties.

The crisis called “Europe” is actually an opportunity for governments to re-establish the preeminence of politics in the age of globalization. Red-Green coalitions will be able to win elections in Europe once social-democratic and green parties declare that financial, social, and environmental stability is achievable only on the basis of European solidarity, and hence that European measures strengthen one’s own country by strengthening its partners.

Ulrich Beck is a sociologist at the University of Munich and the London School of Economics.