Eurozone politics: Black, no sugar

 The European Council for Foreign Relations stages a Black Coffee Morning event on European Politics after the EU Summit. I have mine white, but from the general tone of the discussion among thinktankers, politicians and journos the prospects for the Eurozone and the EU could be as dark as the stiffest Italian expresso. Some contributors thought it might not survive a year

Discussion centres entirely on the one large existing member whose stubborn pursuit of its national interest is obstructing a long-term viable EU: Germany. France admittedly got a lot of what it wanted out of the summit, retaining the basically intergovernmental approach, but conceded the German demand for a reformed treaty of austerity-inducing financial discipline.

Germany and German politics are overwhelming what matter and, in some ways summit and the drama of the British veto-that-might-not-be-a-veto are sideshow compared with how Europe’s biggest and most economic powerful member decides to play it.

Photo: Tage Olsin

Was Angela Merkel playing a kind of high stakes poker waiting for the right moment to fold ‘em and concede some form of Eurobonds? Or was her government determined to press ahead to a possibly very bitter end?  German public debate and perceptions across political spectrum are, unsurprisingly, very different from those in many other places in Europe with little appetite for a Berlin bankrolled Euro bailout after painful and divisive economic restructuring (and the earlier costs of re-unification).

Indeed, some in Germany are apparently toying with the idea of partial break-up of Euro producing perhaps a sharp two-year recession followed by prosperous German-centred ‘small Euro’, which could ‘go global’ playing to Germany’s industrial and export strength. Unlikely, said some: anchoring in EU part of the political DNA of the FRG.  Be careful countered others:  re-united Germany was different country where old assumptions about how things work are  no longer always safe.

 The vision of Treaty-bound austerity Union in which a French-German tandem  (with the Germany as the senior partner) – European institutions have lost power and influence in the current crisis and may not regain it –  would run up against the interests of states normally closely economically and politically aligned with Germany in the EU such as Netherlands, Finland, Denmark, Poland and other CEE states (I have the phrase greater ‘Greater Germany’ scribbled down in my notebook – did somebody actually say that?). But none bar Poland  – in the remarkable speech by Foreign Minister Sikorski  – have actually raised these issues openly.

Seems in some ways as if history has run full circle and we back once again discussing the idea of a form of Mitteleuropa, albeit in the context of the more balanced and more democratic structures of the EU (or whatever it turn into)

And those pesky Brits? Well, those British demands were perhaps rather modest – maybe we should give Nick Clegg some credit (did I really just write that?) and in some ways leaning to  greater not less regulation.  The consensus view at the ECFR BCM seemed to be –  diplomatic and strategy of the UK were just a disaster, although the underlying issue of who (EU or UK)  regulates was perhaps the key issue was possibly less easily negotiable

Cameron (rather like Sarkozy) comes out a big short-term winner in domestic politics, but at the more strategic levels the Brits are left needing to improvise ‘creative diplomacy’ to prevent emergence of too starkly Two Speed Europe – perhaps pushing for varied integration, really going against the grain of European politics for more political integration. Underlying British problem is that it wants viable Euro to avoid economic meltdown, but fears the decline in own influence that integration necessary for this will bring.

Perhaps, however, if the politics of Euro rescue were to prove Mission Impossible, integration would painfully rebound, as someone put it, like piece of stretched elastics reverting to something closer to UK vision and/or status quo.

And there was distinct pessimism – reflecting in the dank rainy day visible taking shape outside – as to whether the politics could overcome economic diversity across EU with no underlying European identity or solidarity legitimising redistribution.

We are, it seems, caught in a vicious circle/cycle of technocracy and populism:  populist mood of public anger with elites, politicians and distant, illegitimate looking European institutions leads these elites to, as ever, look for quiet, backdoor technocratic workarounds feeding waves of inchoate (and ultimately unfocused and possibly inconsequential) anti-elite politics.

The weather  outside was dark, dank cold with storm brewing up for later.

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