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Political roots of Europe s economic crisis Print This Post There is no shortage of analysis of European integration, but nothing on its dis integration, Princeton University s Jan-Werner Mueller recently observed. Yet what has been unfolding in the past 15 months or so should make even the most ardent pro-European think about an orderly mechanism for making member states exit, he c ontends, citing the euro crisis and Hungary s backsliding from liberal democracy t o a soft form of authoritarianism, or Lukashenko lite . Europe s malaise is more poli tical than economic, writes Walter Laqueur. It is generating tensions within and between states with potentially disturbing implications, but it may take a more profound crisis to force the continent s leaders to embrace fundamental reform. What next? After a marathon meeting in Brussels, Greece, the banks and the euro have all been saved certainly up to the end of the year. Dow Jones, NASDAQ and all the other stock exchange indices went up in response. But what about 2012? The basic problems persist; the banks have accepted a hair cut of 50% in Greece but why not in Portugal, Ireland, not to mention some of the bigger European economies? Europe, as everyone knows by now, faces a debt crisis but it is not at all certain whether this is the real problem, for the American debt ratio is larger than the European, and the Japanese is even larger. The re al crisis is political the fact that it was a fatal mistake to introduce a common currency in Europe without a political framework leaving vital decisions to nati onal governments. Unless such radical reforms are carried out, crises are bound to recur. But there is no desire at all in the major European countries to proceed towards a United States of Europe. And even if there were such readiness, this would in volve protracted constitutional changes in all European countries which cannot b e expected in the near future. There are two alternatives. One is to give up the common currency, but a return to the mark, the franc and other national currencies would not just be a most co mplicated process, it would be exceedingly costly and dangerous. The European ec onomies are very closely integrated by now and no one knows how to perform radic al surgery or what the consequences would be. The other alternative is the one performed in Brussels, a bit of reform mixed wi th business as usual. Keeping the euro, but subjecting it to some more control. However, these half measures will not work except perhaps in the short run. Man y years ago, Belgian Prime Minister Leo Tindemans compared Europe to a half-fini shed building, predicting that such an edifice would not last: exposed to the fo rce of the elements it would eventually be damaged and ruined. The dangers facing Europe are predominantly political and they will lead to furt her polarization within and between countries. Governments are becoming more and m ore unpopular because they are carrying out policies which no one likes austerit y, spending cuts, enforced saving. At the same time, tensions are increase betwe en Northern Europe s donor nations and Southern Europe s aid recipients. What could be a way out of this mess? Some have suggested two Europes instead of one separating the relatively prosperous northern league from the acutely troub

led southern division. But nobody knows how this would function: Should France b elong to the south? It was even suggested at the annual Lindau meeting of some t wenty-plus Nobel prize winner that Germany should belong to the south, which the y claim from a purely economic sense would make more sense. But unfortunately wh at may make economic sense, could be politically absurd. Another suggestion refers to the Hanseatic League, a north European organization , extending from Scotland to Novgorod, which survived from the 13th to the 17th century. It mainly engaged in trade, functioning as a customs union of sorts, bu t also had its own legal system, although no common foreign policy or army. (It is still used for the purpose of car registration HH stands for Hansa Hamburg.) Ho wever, organizations which functioned reasonable well in the late middle ages ar e not a necessarily a good model for the contemporary world. I have long believed, following Jean Monnet, that a new impetus towards European unity may come only as the result of a crisis crises being the great federators i n history. Neither individuals nor groups decide to cooperate closely unless fac ed with a clear and present danger. Now the crisis has arrived but apparently it has not been sufficiently traumatic to have this effect. Perhaps more than one crisis is needed or an even greater emergency. Walter Laqueur s latest book, After The Fall: The End of the European Dream and th e Decline of a Continent, the sequel to Last Days of Europe, will be published i n January 2012. About Walter Laqueur Walter Laqueur has written more than twenty books, translated into as many langu ages, including Communism and Nationalism in the Middle East, The Soviet Union a nd the Middle East, The Struggle for the Middle East, and Confrontation: The Mid dle East and World Politics. He was a co-founder and editor of the Journal of Co ntemporary History and the Washington Quarterly, and has taught at Georgetown, C hicago, Harvard, Johns Hopkins, Brandeis, and Tel Aviv universities.