The current crisis the price for not having a European federal union

News & Comment

The division of Europe between creditors and debtors should have never happened and in fact it would not have happened if the European interest, initially present in the draft of the Maastricht Treaty, had prevailed over the national interests, argues Joan Marc Simon.

Joan Marc Simon is board member of the WFM-IGP, committee member of the European Federalists and coordinator of the UNPA Campaign in Spain. Original article here

"In times of crisis there are always scapegoats. Lately the EU has become a scapegoat, especially in those countries suffering the most from the crisis. As a result public support for the European project has fallen to historically low levels and so far it doesn’t look like it is going to recover anytime soon.

To what extent is the European project to blame for the situation Europe finds itself today? The answer is complex because if on one hand the imperfect – and incomplete – architecture of the EU has amplified the effects of the crisis, on the other hand this is not the fault of the idea of European integration itself, but rather the consequence of years of bad national politics and even worst European governance.

Indeed the imperfect construction of the EU since the Maastricht Treaty is responsible for ill-equipping the EU institutions with the tools of economic policy necessary to complement the European monetary policy.

One of the consequences is the indebtedness of the European periphery – by allowing these countries to access cheap money – partly to consume goods produced by the same EU countries that now refuse to accept the harmonisation of debts.

The institutional structure of the EU is responsible for not having allowed a regular check of national budgets, bank accounts or destination of EU funding which in many countries ended up in unnecessary infrastructure in the best case, or directly in the pockets of some elites in the worst case.

This has been partially patched with the adoption of the six pack and two pack but the cost for the European citizens of the irresponsible behaviour of EU member states that blocked these measures during 20 years is today enormous.

Moreover, the incomplete political union has triggered what can be called the illusion of power at European level. That is the illusion that the EU could actually decide or do something coherent in favour of the common interest when it actually couldn’t. As a result the European citizens have been disillusioned over and over and have lost trust that much good can come from the EU.

Many blame figures like Barroso, Van Rompuy or Ashton for the performance of the European institutions they preside. However the truth is that these figures lack the power and the legitimacy to impose themselves upon the member states who by definition – and mandate – have to put the national interest before the European interests.

For instance, the European Commission is often referred to as the “executive” when the really important executive powers lie in the European Council, the less European of the European institutions.

As a consequence, the lack of political union has effectively meant that Germany and not the European Commission, together with some other northern countries, has been imposing policies beyond its democratic sphere, de facto undermining not only national but also European democratic foundations. In absence of European democracy, Europe is ruled by creditocracy.

The division of Europe between creditors and debtors should have never happened and in fact it would not have happened if the European interest, initially present in the draft of the Maastricht Treaty, had prevailed over the national interests.

The ruinous decision of having a common monetary policy without a European fiscal policy and a proper EU budget capable of providing the solidarity was agreed then and we have been paying the price for this decision ever since.

Paradoxically, countries such as France, which then claimed that Europe was not ready for a fiscal union, are suffering more from this decision than countries such as Germany that back then offered a common currency, a common budget and a common fiscal policy. We now see how fixing these mistakes comes at a much higher economic, social and political cost.

All in all, the EU is now paying the price for at least a decade of delay in the process of European integration. Indeed, most of patches and reforms on economic policy that have been decided since 2008 should have been in place since the signature of the Maastricht Treaty. How much suffering would they have spared us!

Sadly what prevented the necessary steps of integration of the last 20 years is an ever older endemic European problem, the same unanimity principle that crippled the League of Nations before the second world war has slowly but steadily handicapped the development of the EU over recent decades.

Of course the EU is not the League of Nations. However, it has kept the unanimity principle for the most important decisions, the decisions upon which depends the functioning of the EU, the decisions guilty for the suffering of many Europeans today and for the potential collapse of the EU.

It is not the European integration project but rather its incompleteness that is the cause of many problems of today’s EU. The costs of not-enough-Europe amount at least to several million of unemployed Europeans, many more millions of euros of public and private debt, and losing support for the project that has kept Europe at peace for 60 years.

The current crisis has proven once again – for those who still needed proof – that the sum of national interests doesn’t add up to the European interest and that if the EU is to survive it needs to become a political union with proper institutions well equipped to put Europe before national interests.

We are dealing with nothing new; old politics, old interests, old mistakes and old people deciding on the future of a continent anchored in its old traumas.

Nevertheless, the EU still represents the most revolutionary experiment in supranational governance and conflict prevention of the last 100 years. However, if it is to last 10 more years it urgently needs to catch up with 20 years of delay and put the European people and the European democracy at the core of the new old project – a place that prime ministers and heads of state have occupied, and misused, for too long."