Sat, May 28, 2011 - Page 9 News List

The European dream hangs in the balance

With the euro being tested to breaking point, the EU’s implicit social solidarity is in increasingly short supply

By Paul Mason  /  The Guardian, LONDON

Illustration: Tania

In the summer of 1914 the Austrian novelist Stefan Zweig was on holiday in Ostend with fellow writers and artists. One afternoon, noticing the sudden appearance of uniformed soldiers on the promenade, they buttonholed an officer: “Why all this stupid marching around?” It was Aug. 3: War was less than 24 hours away, but it seemed impossible.

Believing the era of peace, social liberalism and globalized trade could never end, the European elite walked blindly into its ending. Today the political elites of Europe stand in danger once again of destroying a dream. They have convinced themselves that the single currency and the EU are the same project, and that the collapse of either would be the end of the world they know. Therefore it cannot happen. This fallacy is about to be put to the test.

Greece hovers on the brink of a debt default; the cost of borrowing for Germany is shooting up; the cobblestones of Spanish towns echo to mass protests against austerity; a thousand people a week leave Ireland and across northern Europe rightwing parties drum their fingers in anticipation of one day, soon, obtaining if not power then the balance of it.

What is at stake this summer is more than just the future of the eurozone, for which there are predictable outcomes. It is the future of pan-European solidarity, which has been implicit in the project of the EU and, recently, in short supply.

In the strict sense “solidarity” is something which, in the EU, concerns mutual defense: in the Lisbon treaty it applies not just against military aggression or terrorist attack, but also in the case of “natural and man-made” disasters. However, the concept of solidarity between the peoples, states and classes of Europe is older than the document signed in Lisbon. It stretches back to June 16 1940, when — at the urging of Jean Monnet — the British war Cabinet offered the French people common citizenship, merged foreign, defense, financial and economic policies and federated parliaments.

Out of the allied victory, the Marshall Plan and — four decades later — the rapid incorporation of Eastern Europe grew not just the institutions of trans-European solidarity, but an implicit social deal.

Europe would be a social market economy: there would be a safety net for the poor and cross-border wealth redistribution through the Social Fund. Eastern Europe would adopt the market, but limit the amount of organized crime and corruption to levels commensurate with those in the West. The former dictatorships of Greece, Portugal and Spain would shower social benefits on their populations in return for a gigantic act of forgetting who had done what to whom. Northern Europe would pay for it all and — by way of quid pro quo — drench its blond chest hairs with sunscreen on the beaches of the Mediterranean.

It is this deal that is falling apart.

Since the Greek fiscal crisis erupted in January last year, the combined forces of the European Central Bank (ECB), Economic and Financial Affairs Council (ECOFIN) and the European Commission have proved incapable of designing a resilient anti-crisis strategy. Only under pressure from the US government and the IMF did they come up, in May last year, with the 700 billion euro Financial Stability Mechanism, but its effectiveness was immediately undermined: first by the stark numerical fact that it was not big enough; second by the nonexistence of a leadership able to use the 700 billion euros to pre-empt crisis.

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