Eurozone crisis: the US has to ride to the rescue once again
Meanwhile, the politicians of Europe seem determined to make themselves irrelevant.
So, once again, the United States has intervened to save Europe from itself. And there we were thinking that the old 20th-century pattern had been eradicated. The Federal Reserve Bank made floods of cheap dollars available last week, having come to the blood-curdling conclusion that the global banking system could only be saved from catastrophic collapse by sending in the American cavalry – Europe’s own governing class being apparently incapable of effective action.
“What on earth is the matter with Europe?” asks the rest of the world in exasperation. Is it inherently obtuse – unable to see the mess that it is in and the danger to which its incompetence is exposing everyone else? Or do its political leaders simply buckle in the face of popular pressure, too fearful of electoral retribution to confront their populations with the only real options that are available? Angela Merkel is now making seriously uncompromising noises about fiscal union: it is to go ahead, whatever anybody else says or thinks. No more messing. And Nicolas Sarkozy seems to be accepting this – for the moment. But watch this space. Rather belatedly, the European Parliament has woken up to the threat this represents to democratic principle: it has announced that if tax and spending policy is to be decided centrally by the EU, then it, being the only body elected by the people, should have co-responsibility for those decisions with the European Commission. In other words, since fiscal policy will be out of the hands of national governments, and therefore beyond the reach of a population’s own democratic process, it really ought to be accountable to some representative body. (The most extraordinary thing about this is that it was just an afterthought.)
Then of course, Mrs Merkel will never permit the European Central Bank to bail out all those feckless southern Europeans who mystifyingly refuse to behave like Germans. Or maybe she will, if the EU puppet regimes now in place in Greece and Italy actually enforce austerity measures that pauperise their peoples. But since she is opposed to the money-printing that would be required for such a bail-out (for what her country believes to be sound historical reasons), it is difficult to see how she could relent even if the Greeks and Italians were hammered into the economic Stone Age. Meanwhile, in the back rooms, unknown officials are working out what is actually going to be done if and when the euro collapses: while this charade of absolutely-last-chance summits runs its course, the contingency planners are outlining the mechanisms that will contain the damage. You may find this reassuring, but think what it really means: economic policy is now outside of the control of politics – which is to say, no longer accountable to voters. Do all those people in the rest of the world who just want Europe to (as George Osborne puts it) “sort itself out”, understand this?
In truth, it is almost impossible to understand the European dilemma because it is so arcane – so weighed down with historical accretions and ideological obscurantism – that it has become impenetrable even to the principal players in what is turning into a tragedy of monumental proportions. The original plan was designed out of remorse on the one hand – to heal Europe’s ancient hatreds – but also to ensure that the unified power of the new European bloc would be a check on the overweening might of the United States. Instead, the old enmities and suspicions have been energetically revived and the US has, with its usual reluctance and misgivings, been forced to come to the rescue. Isn’t this where we came in? The French foreign minister, Alain Juppé, said last week that war on the Continent could recur. It was unclear whether this was intended as a warning or a threat.
To Americans, an inability to escape from the past is incomprehensible: theirs is a country composed entirely of people who did exactly that. But Europe is populated by the people who did not leave, whose collective memory is imbued with either blood-and-soil national identity, or a proud sense of historical mission. It was a mistake to think that all this could be expunged as an act of political will by a single generation which saw itself as uniquely enlightened. Like most benign oligarchies, the EU built this new entity on what it thought to be morally unimpeachable, immutable principles: the provision of universal security which would prevent populations from descending into fractured, hostile factions. Civil unrest – and the terrible international crimes to which it gave rise – would be eradicated for ever by a system of social engineering and welfare that would provide permanent well-being (and so, permanent peace).
In fact, that generation was as much a product of its times – and its own collective memory – as any other. The welfare and security that the “new” Europe distributed to its masses was a function of inherited class guilt: as much a tribute to the past as what had preceded it. The extent to which the entitlement culture that it bred contained both moral and economic risk did not become fully clear until it was extended beyond the core countries that had created it. (But in truth, if you can remember this far back, Germany’s lavish pensions and welfare programmes were under intolerable strain long before the euro crisis exploded.) It is no coincidence that this was largely a western European problem: the eastern bloc, being Marxist, chose to venerate work. Therefore it did not tolerate idleness. Therefore it had no welfare system. What it had was “full employment”. People did phoney make-work jobs and got paid phoney money that was worthless outside the Soviet currency zone. (That is why the eastern Europeans who come here are so willing to take any employment on offer, and may turn out to be the saviours of western capitalism.)
What is to be done about Europe’s politicians who seem determined to make themselves irrelevant? Presumably it is much too late to persuade them that there is no such entity as “Europe” – no cohesive, homogenised conglomeration which will submit to the forcible erasure of its various historical experiences. The elected leaders will be displaced either openly or secretly by technocrats – faceless, unaccountable functionaries who really will “sort out” the shambles that is left behind without having to consult the people at all. The rest of the world will probably sigh with relief.