By Jeffrey Michels
The future of the European Union will be bleak if it continues to be led from the bottom-line up. As the continent struggles economically, financial leaders in Europe have taken the reins of its project for unity, dependent on tremendous political will and historical foresight. But too often they are rejecting politics, pushing historically errant economies into the euro-zone with such force that they may instead be sent over the edge.
There have been warnings of this disheartening development, most notably from Pope Francis. “To our dismay,” he warned the European Parliament, “we see technical and economic questions determining the political debate, to the detriment of genuine concern for human beings.” But the day has long since past when the pope held sway over such matters in Europe.
Germany, Europe’s largest economy, emerged relatively intact from the global financial crisis as the de facto leader in European economic affairs. With smaller but similarly stable countries (the Netherlands, Denmark, etc.), it clenched the purse strings that the European governments left on the brink by the collapse badly needed opened. Under Germany’s ardent belief that balanced budgets were the key to averting collapse and avoiding future crises, bailout deals were agreed upon between international financial institutions - the “troika,” composed of the European Central Bank, the European Commission and the International Monetary Fund (IMF) - and the beleaguered governments. These deals opened substantial lines of credit in exchange for strict reform regimens that would slash welfare programs, no matter how precious to their societies.
A more secular warning against the zealousness of this approach has since come in the form of Syriza’s “surprise” victory in Greek elections – and it too has gone unheeded. This party, railing against the EU and its deal with Greece, apparently won because of the country’s financial irresponsibility, and not as a result of this deal that has led to a shrunken economy, deplorable conditions among the working class (while a corrupt elite remained unscathed) and crippling debt from the bailout’s loans.
That should have been a wake-up call.
The IMF, brought in by Germany to be Greece’s strictest creditor, has declared that it does not get involved with politics. But the success of the reform that it seeks – and the goals of European unity – depend so strongly on politics that this is a nonsensical position to take. The situation in Greece called for delicacy, as the announcement of austerity measures brought immediate protest from its people. But Greece’s creditors pushed for reforms in exchange for a financial rescue that looked increasingly like ruin, forcing its governing centrist party askew of an increasingly radicalized constituency. And up pops a party that stands against the tainted bailout deal and its dealer.
Given another chance - as Syriza revealed itself willing to work with Europe to salvage the country’s reform program, economy and future in the EU - European leaders have pushed Greece into another deal that could poison the well of Greek politics even further. Seeking compromise to the brink of default, the Greek government finally had to budge a lot – keeping the vast majority of the original bailout deal in place – in exchange for a little – the ability to propose changes to the specifics of certain measures. There is already dissent clamoring within Syriza, decrying the compromise as a betrayal. And if the economy does not turn around within the next political cycle (a strong possibility), this more devoutly Eurosceptic stance will likely be backed by Greece’s many impoverished citizens, only hardened in their disaffection.
The IMF’s director, Christine Lagard, stated that she hopes “that all the effort and all the sacrifices that were made in the last five years were not made in vain.” This thinly veiled threat dangerously lacks self-reflection.
What is frightening is that similar processes are at work elsewhere in Europe, especially in other countries that are struggling with the relentless drive of austerity. In Ireland, hailed as “the good performer” for its progress on reforms, citizens are growing agitated, especially with the recently announced end to the subsidization of its water, traditionally free in Ireland. Again, lack of political tact is threatening the future prospects for reform. The case is even grimmer in Spain, where such a bailout deal was made with a notoriously corrupt government. Citizens there are increasingly fed up with both, and Podemos, founded just last year as another populist party opposed to the EU and austerity, is now the country’s second largest party.
Then there is Ukraine – its population desperate for a sound government and the financial assistance necessary to prop this up free of Russian influence – which will not receive the latter (thus endangering the former). And there are the many restive populations like that in Scotland, who in large part sought to break away from the UK due to due to its single-minded focus on financial return.
Separatism, nationalism, “Grexit:” the lexicon of Europe, after decades of hard-fought progress towards unity, is slanting towards division. This needs to change, and the leaders of the Europe need to exhibit the foresight and strength necessary to do so. Helping its weakest economies back on their feet has to be seen as so much more than an investment in the financial sense.
If Greece today had East Germany’s economy from 1991, it is doubtful that the tremendous effort and sacrifice would have been made to build it up to the standards of the West. It was done, in the case of German reunification, thanks to belief in the strong ties that both sides shared, unable to be obscured by a city-spanning cement wall. That such bonds hardly exist yet across Europe can be seen either as a cause to abandon the project or to double down on the efforts.
It was never supposed to be simple. Robert Schuman, in what was to essentially become the declaration of the European Union, presaged that "Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity."
Given the peace and hope that this union has brought the continent and world since the end of World War II, it is worth the compromise and sacrifice necessary to look far beyond the bottom-line.