Monday 27 February 2012

Political crisis at the bottom of euro troubles – solutions?

The first four instalments were Transparency during the eurozone crises and Euro crises: European Council eviscerated? and Eurozone governance: Fundamental flaws but better presentation and Euro crises exposed and added to EU lack of legitimacy and democracy. The articles were based on my speech at the 22 February 2012 Attac seminar about the implications of the new fiscal discipline in the EU. These blog entries contain some modifications, updates and documentary references, which complement the oral presentation.

Here I continue the discussion with facts and opinion beyond the short address.

”Comprehensive solutions”

After umpteen ”comprehensive solutions”, the limits at EU and eurozone level are finally sinking in (although the solutions deemed possible and necessary are likely to drive us to distraction or despair).

In The European Council in 2011, the tone of EUCO and Euro Summit president Herman Van Rompuy was quite sober. In the General Report on the Activities of the European Union 2011, even Commission president José Manuel Barroso had toned down his often flowery rhetoric.

”Victories” had turned sour often enough for a mood of quiet determination to become appropriate.

Breathtaking, still...

Still, what the cascade of conclaves, summits and institutions has churned out during a short period is breathtaking by EU standards, and ordinary citizens of the union have most certainly been left out of breath by:

The European Financial Stability Facility (EFSF) of the euro countries (beefed up), the European Financial Stabilisation Mechanism of the EU, the permanent European Stability Mechanism (ESM) already beefed up, the integrated planning tool the European Semester, with the Annual Growth Survey (AGS), the Euro Plus Pact (23 countries), the six-pack legislation, the Green Paper on eurobonds (sorry, stability bonds), the two-pack proposals, the TSCG or ”fiscal compact” to be signed, the Commission's first Alert Mechanism Report, as well as the rescue packages for Ireland and Portugal, and now twice into the seemingly bottomless pit of Greece, firefighting in Spain and Italy etc.

Fast and unprecedented by EU standards, but we are still far from where we should be.

Without the operations of the much vilified European Central Bank (in conjunction with other central banks in the world), meltdown would probably have occurred in the eurozone in December or a little later, with disastrous consequences for Europe and the global economy.

We have seen emergency solutions to the financial and economic ills, but not acknowledgement of the root cause, the political crisis at the bottom of this.

The crucial issues of legitimacy, democracy, sufficient powers, accountability and transparency have been almost totally absent from the discourse of the national and EU leaders, and these challenges have figured only marginally in the wider public debate.

Essentially, our leaders communicate their desire for nicer interior design of the prison they have built for themselves and their hope that the crises will somehow go away.

Are we getting what we deserve to get? Or, should we upgrade our thinking and that of our leaders?

Ralf Grahn
speaker on EU affairs, especially digital policy and law

P.S. 1: For better or for worse, between the global issues and the national level, the European Union institutions and the eurozone coteries shape our future. At the same time we see an emerging European online public sphere. More than 900 euroblogs are aggregated by multilingual Is your blog already listed among them? Are you following the debates which matter for your future?

P.S. 2: Referring the anti-piracy treaty #ACTA to the Court of Justice of the European Union (CJEU) marks a lull in the proceedings, but not an end to the political battle. A few moments ago, the online petition launched by @Avaaz for the European Parliament (and the national parliaments) to reject ACTA had already been signed by 2,444,822 netizens, but more are welcome until the official burial.


  1. Agree wholeheartedly. ECB's decision to give banks infinite cash in loans (literally hundreds of billions of euros) has apparently solved short-term crisis. Fundamental resolution, which is to say abandonment of the Maastricht straightjacket and democratization, are nowhere on the agenda however.

  2. @CJWilly

    Old habits die hard, it seems. People, including leaders, have grown up in a world where practically everything, from school history to football league has been built in national terms.

    But if we need more Europe, which we do, our democratic instincts should tell us that the sovereignty of the people is the 'sine qua non' of legitimate rule.


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