Europe's Deadlock by David Marsh

Author:David Marsh
Language: eng
Format: epub
ISBN: 9780300220308
Publisher: Yale University Press

11Fear holds the key

OPPOSING FEARS about the outcome of monetary union act as a decisive block on sensible decision-making. One reason why the German political establishment – both left and right – has so far lined up in favour of bailouts of weaker euro countries, led by Greece, is the widespread concern in Germany that a break-up of the monetary bloc would lead to a new German currency that would sharply appreciate compared with the present euro. This, it is feared, would bring a catastrophic collapse of German trade with the rest of Europe and beyond, with disastrous consequences for the entire European Union. Others, on the opposing wing of the debate, are fiercely critical of such support measures, which they see as open-ended subsidies for mismanaged euro member states – subsidies that could pave the way for calamitous debauchment of the currency, with ensuing social and economic unrest.

Particularly in Germany, dissenters from the perennial policy of ‘more Europe’ are routinely castigated for their lack of political correctness. Instead of constructive dialogue between the two sides of the argument, we see a continued tendency for decision-making paralysis, generated not by rational debate but by terror about the outcome of alternative policies. Such an environment provides fertile ground for political gerrymandering, distortions and blackmail of all kinds.

Although political parties opposed to the single currency have become more important in the electorate arithmetic of nearly all member states, so far the pro- and anti-euro sides of the argument have simply cancelled each other out – an uneasy stalemate that will probably continue. There has been no wholesale clear-out of the old guard. Although – with the prime exceptions of Angela Merkel in Germany and Mark Rutte in the Netherlands – government leaders in euro members have been ejected in the wake of popular discontent over austerity and recession, Europe has seen inflections rather than sweeping political changes: variants of the political parties that led countries into the euro and that presided over the ill-starred combination of boom and bust are still in power nearly everywhere. A novelty has been the arrival on the scene of a serious-minded, relatively well-organised anti-euro party in Germany in the form of Alternative for Germany, which has hardened the overall nature of German political discourse on the single currency.

Fear seldom provides an appropriate foundation for sensible decision-making; yet it has been a constant companion to monetary union – from the basic reasons for its establishment, all the way through to the choice of participants. The French, well aware of German recalcitrance over giving up the D-Mark, were nearly always able to operate the levers of bilateral diplomacy to fulfil their purposes – but with dexterity and effectiveness that declined over time. One of the masterminds behind the euro, European Commission President Jacques Delors, more than once orchestrated a political crisis to force the Germans to move forward. Edouard Balladur, France’s former conservative finance minister, promoted a French ‘Yes’ to the country’s referendum on the Maastricht treaty in September 1992 as a tool to control Germany.

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