As the crisis in the euro zone and the European Union deepens, it is only natural that attention focuses on its complex economic details. And yet it is becoming increasingly clear that the failure is essentially political. The EU's political infrastructure is shaky. It is not about to disintegrate, but it is clear that its members will have to devote the next few years to the job of thoroughly putting their house in order.
It turns out that the Euro-skeptics were right, at least in some of their arguments. Clearly the situation in Greece is the immediate cause of the present economic crisis. The fact is that the previous government in Athens faked economic data when it sought acceptance to the euro zone; the generous pensions available in Greece and a culture of tax evasion also contributed to the crisis. But the fact that Spain and Portugal are considered next in line for a similar crisis raises a broader question: What do these three countries have in common?
The simplistic answer heard recently, especially in German circles, verges on the racist: These are Mediterranean countries, with distinct political and social traditions, whose residents do not scrupulously obey the rule of law and whose governments are corrupt. Even if this is true, these explanations provide only part of the answer. In order to delve into the more fundamental causes, one must look into the circumstances under which Greece, Spain and Portugal were admitted into what was then called the common market. For Greece, this took place in 1981; for Spain and Portugal, in 1986.
It seems that by now people have almost forgotten that for years, all three of these countries were ruled by dictatorships. Greece was led by nationalist colonels, while Spain and Portugal had been under semi-fascist dictatorships for decades. These tyrannical regimes collapsed in each of these countries, and in the 1980s they went through processes of democratic transition. In all of them, communist parties were the leading and most determined groups opposing the dictatorships, so these parties became significant players, if not the strongest ones, in the new democratic political arena. And since that was the period in which the Cold War peaked, this fact was perceived in Western European capitals, as well as in the United States, as posing a threat.
Fears that a communist party would rise to leadership in a Western European country paved the way for the acceptance of Greece, Spain and Portugal to the European Common Market, even though these countries' political institutions were not sufficiently consolidated and stable and their economies did not yet meet the common market's customary criteria.
Aware of their economic underdevelopment, the common market decided to channel huge sums of money to those countries. The goal was to encourage growth and prevent a situation in which unemployment and other economic problems would send the embittered masses in those countries into the arms of the communist parties (or back to semi-fascist elements ). And so welfare state systems were established there.
Yes to prosperity, no to growth
The outcome was impressive economic prosperity. Anyone who visited Greece, Spain and Portugal in the 1980s and '90s could not help noticing the speedy development of their respective infrastructures. Prices were still relatively low in these countries, something that attracted millions of tourists from northern Europe, especially to Greece and Spain. Hundreds of thousands of people in England and Germany discovered they could buy holiday homes and spend the rest of their lives on Mediterranean's beaches at prices that were significantly lower than in their own countries.
Over the years, however, the standard of living in Greece, Spain and Portugal began to approach that of the other Western European countries. Their citizens became used to a developed welfare network. And the money for all that did not come from economic growth in those countries, but rather from generous grants that flowed in from Brussels, and easy-term loans provided by European banks, with the encouragement of the European Market's leadership. This indeed helped strengthen the democratic framework in those countries, but the economic prosperity was deceptive to a large extent, since it was based on transfer payments and not on local growth. The results were quite impressive in the short term, but problematic in the long run: The tourism and construction industries indeed blossomed, but industrial development lagged far behind them.
The introduction of the euro as a common currency in 2002 led prices in Greece, Spain and Portugal to become equal to those in other West European countries. This not only hurt the exports of these three countries, but also made them much less attractive to mass tourism; it spoiled the dreams of a comfortable retirement harbored by middle- and working-class people in England and Germany.
These three countries were spared a slide back to communism and a return to authoritarian rule, but their citizens became used to a standard of living that was not backed up by internal economic achievements. The political move succeeded but at a heavy economic price that is now becoming apparent.
Indeed, it is not "Mediterranean characteristics" that are responsible for Greece, Spain and Portugal's faltering economies, but pan-European decisions. It is easy to criticize the "southerners" for their ways of life, but during the days of dictatorial regimes, the citizens of these three countries suffered shortages. Abundance was the bait that Europe offered them in order to guarantee democracy.No European demos
If Greece, Spain and Portugal's entry to the common market was the outcome of political considerations, while the expected economic cost was ignored, then the process of European integration - from the common market to the European Economic Community and finally to the EU - occurred to a large extent while the need to secure a strong political foundation in the European people's consciousness was largely ignored. Such a foundation was necessary since these processes entail drastic limitations on national sovereignty.
The process of unification was, as such, very impressive. One cannot avoid lauding the leaders of France and Germany who managed, after 150 years of warfare, to lead their people to reconciliation. The words "no more war" have been transformed from a slogan to a European reality (although, obviously, not all of it was due to lofty motives; fear of Soviet expansion made the leaders realize they shared a common enemy that was far more threatening to them all than they were to each other ).
The problem is that all the stages of European integration were led mainly by the countries' leaders and by the European bureaucracy that emerged in Brussels, without democratic supervision. Ways of life and behavioral patterns were legislated from above without their being subjected, first, to parliamentary oversight in the various countries. This, by the way, is also the main reason for the deep British Euro-skepticism. The British parliamentary tradition spans hundreds of years and is dear and close to citizens' hearts. Which is something one cannot say about France, for example, let alone Germany or Italy.
One of the results was that significant hurdles emerged whenever proposals for new stages of integration were put to democratic tests, in countries whose constitutions or laws required approval in referenda. For instance, the Maastricht Treaty (1993 ) was ratified only following two referenda in Denmark and after it won a mere 51 percent of the votes in a referendum in France. The proposed all-European constitution of 2004 was rejected in referenda in Holland and France and the Lisbon Treaty (2009 ) hit many snags before it was approved.
The European Parliament's authority was expanded following the Lisbon Treaty, but it is still an amorphous entity with weak links to its constituents. An all-European consciousness did not develop alongside the development of the union's institutions. There is still no European demos.
The absence of a sense of citizenship was expressed on two levels during the past year. One issue concerns the formation of coherent executive institutions. The Lisbon Treaty sought to create effective and more executive mechanisms for the union's institutions: a permanent elected chairman in place of the presidency that rotates every six months, and a foreign minister who would speak for Europe. But at the end of 2009, when the time came to elect the people who would hold those offices, the various countries got cold feet - mainly because of domestic pressures. The two people eventually elected to these posts are anonymous and colorless figures, who clearly cannot fulfill the high positions entrusted to them. All this happened even though there were impressive personalities on the European horizon such as Tony Blair, Javier Solana and Carl Bildt, who could have successfully filled these positions.
The readiness, in principle, to yield sovereignty did not overcome a tradition that has lasted for hundreds of years. What happened in fact shows that in the final analysis, each country more or less kept its own traditional foreign policy that has evolved from its needs, its interests and its historical values.
Even the way the EU countries reacted to the Greek economic crisis highlights the absence of a European demos. That became apparent as one of the limbs of the euro zone (or the EU ) became weak. The other limbs do not sense responsibility or solidarity with it (if one can use concepts drawn from traditional nationalist discourse ).
There is no doubt that if one of the states of Germany were to face a similar crisis, the citizens of the other states would not dare express criticism about it the way they did about the Greeks. On the contrary: German citizens showed remarkable willingness to bear a heavy burden and demonstrated deep solidarity when it came to helping to their brethren in East Germany after the Berlin Wall fell. The huge sums West Germany invested in the east aroused some hesitant criticism here and there but the national solidarity prevailed.
Europe finally set out to help Athens, but only after it became clear that an insolvent Greece could lead to the collapse of several German banks that hold Greek promissory notes (and there is still considerable doubt whether this generous package, which in fact just postponed the debt repayment, can indeed solve the financial troubles. ) The Greek, Spanish and Portuguese governments passed, under EU pressure, several laws that drastically cut their citizens' standard of living - an act of weaning them from dependence on charity that Western countries extended them for political reasons.
It remains to be seen whether these cutbacks will create political and economic instability in countries whose democracy is still new. Today there is no danger of communism or a return to fascism, but it is difficult to foretell how things will develop, especially since no one is guaranteeing that the economic crisis threatening all of Europe is already under control.
Talk of dissolution of the euro zone or of several countries leaving it, which seemed totally hallucinatory only several months ago, is now heard repeatedly and can no longer be totally ignored. The union's political integration is severely faltering. Rome was not built in a day. It is already clear now that many, many more days will be needed to build a unified Europe.
Prof. Shlomo Avineri is a professor of political science at the Hebrew University of Jerusalem and a former director of the university's Institute for European Studies.
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