It is becoming clear that Germany intends to be the EU’s major political as well as economic power, and to dominate European governance to favour Germany’s privileged position as the global economic order changes. Ordinary citizens of other countries in Europe may refuse to comply.
The novelist Gabriel García Márquez used to say that the Nobel Prize for Peace would have been better named the Nobel Prize for War, given its recipients — Henry Kissinger, Menahim Begin, Barack Obama. This year’s award is less bellicose, but still material for satire: the European Union has earned what might be termed the Nobel Prize for Narcissism. But Oslo can be counted on to surpass itself: next year, we can only hope the Nobel Committee awards the prize to itself.
The honour conferred on Brussels and Strasbourg is timely. In the first years of the century, European vanities reached a crescendo. These were years resonating to the claim that the EU offered — in the formula of the late Tony Judt, echoed by many others pillars of European wisdom — a “paragon” of social and political development to humanity. Since 2009 the lacerations of the eurozone have left their own cruel commentary on these outpourings of self-satisfaction.
For all that, have they disappeared? It would be premature to think so, as can be seen from the august example of Jürgen Habermas who has just published another book about the EU, Zur Verfassung Europas (On Europe’s Constitution). Its 60-page centrepiece (1) is a remarkable illustration of intellectual introversion. It contains around a hundred references, three-quarters of them to German authors; nearly half of these are to three associates whom he thanks for assistance, or to himself. The residue is exclusively Anglo-American, dominated (a third of the entries) by a single British admirer, David Held of recent Gaddafi fame (2). No other European culture figures in this exhibition of provincialism.
More arresting still is the theme of the essay. In 2008 Habermas attacked the Lisbon treaty for failing to make good the democratic deficit of the EU or offer any moral/political horizon for it. Its passage, he wrote, could only “cement the existing chasm between political elites and citizens,” without giving any positive direction to Europe. What was needed was a Europe-wide referendum to endow the Union with the social and fiscal harmonisation, military capacity and, above all, directly elected presidency that alone could save Europe from a future “settled along orthodox neoliberal lines.” Noting how far this enthusiasm for a democratic expression of popular will (which he had never shown any sign of countenancing in his own country) was from his traditional outlook, I predicted that once the Lisbon treaty was pushed through, Habermas would no doubt quietly pocket it (3).
Trumpeting of Lisbon
This was an underestimate. Not quietly pocketing but extravagantly trumpeting the treaty, Habermas has now discovered that, far from cementing any chasm between elites and citizens, it is no less than a charter for an unprecedented step forward in human liberty, a refounding of European sovereignty based on the EU’s citizens, not its states, and a luminous template for a parliament of the world to come. The Europe of Lisbon, leading the way in a “civilising process” that pacifies relations between states, confining the use of force to punishment of those who violate human rights, is blazing a trail from our indispensable (if still improvable) “international community” of today to the “cosmopolitan community” of tomorrow, a Union embracing every last soul on earth (4).
The narcissism of recent decades, far from abating, has reached a new paroxysm. What vanishes in a stupor of self-admiration is that the Lisbon treaty speaks not of the peoples of Europe but its states, and was rammed through to circumvent the popular will, expressed in three referendums; that the structure it enshrines is widely distrusted by those subject to it; and that far from being a sanctuary of human rights, the Union it codifies has colluded with torture and occupation, without a murmur from its ornaments.
This cult of self sits poorly with external realities. Laden with as many European prizes as the ribbons of one of Brezhnev’s generals, Habermas is in part the victim of his own eminence: he is enclosed, like the American philosopher John Rawls before him, in a mental world populated overwhelmingly by admirers and followers, decreasingly able to engage with positions more than a few millimetres from his own. Often hailed as a contemporary successor to Emmanuel Kant, he risks becoming a modern Gottfried Wilhelm Leibniz, constructing with imperturbable euphemisms a theodicy in which even the evils of financial deregulation contribute to the blessings of cosmopolitan awakening (5), and the West sweeps the path of democracy and human rights towards an ultimate Eden of pan-human legitimacy. The habit of taking Europe as a cynosure for the world, without showing much knowledge of the cultural or political life within it, has not gone away and is unlikely to yield just to the tribulations of the common currency.
The disarray into which these tribulations have thrown the EU is clear. Europe is living through the deepest and longest recession since the second world war. To understand its drivers, a sense of the underlying dynamic in the crisis of the eurozone is needed. Put simply, it is a result of the intersection of two independent fatalities. The first is the general implosion of the fictive capital with which markets throughout the developed world were kept going in the long cycle of financialisation that began in the 1980s, as profitability in the real economy contracted under the pressure of international competition, and rates of growth fell decade by decade. The mechanisms of this deceleration, internal to the workings of capital itself, have been set out in detail by the historian Robert Brenner in his history of advanced capitalism since the war (6). Wolfgang Streeck (7) has in turn shown its effects in the vast expansion of private and public debt to prop up not only rates of profit but political electability. The American economy illustrates this trajectory with clarity, but its logic has been system-wide.
In Europe, however, a further logic was set in motion by the reunification of Germany and the design of the monetary union agreed at Maastricht, followed by the Stability Pact, both cut to German requirements. Presiding over the common currency would be a European Central Bank (ECB) whose conception seems inspired by the ultraliberal theories of Friedrich Hayek: it is answerable neither to voters nor governments, but only to the single objective of stable prices. Dominating the new currency zone would be its biggest economy, now enlarged to the east, with a major reservoir of cheap labour just across its borders. The costs of reunification were high, dragging down German growth. To recoup, German capital enforced an unprecedented wage repression, accepted by German labour under threat of outsourcing to Poland, Slovakia or beyond.
The economic consequences for southern Europe were entirely predictable. As manufacturing productivity rose and relative labour costs declined, German export industries became more competitive than ever, taking an increasing share of eurozone markets. In the periphery, the corresponding loss of competitivity of the local economies was anaesthetised by a flow of cheap capital borrowed at interest rates held virtually uniform across the space of the monetary union, as laid down according to German prescriptions.
In late 2008, when the financial crisis set off in the US hit Europe, the credibility of this peripheral debt crumbled, threatening a chain of state bankruptcies. In the US, massive public bailouts could stave off the collapse of insolvent banks, insurance companies and corporations, and the printing of money by the Federal Reserve could check contraction of demand. But two barriers blocked such a temporary resolution in the eurozone. Not only did the statutes of the ECB, enshrined in the Maastricht treaty, expressly forbid it from buying the debt of member states, but there was no Schicksalsgemeinschaft — that “community of fate” analysed by the sociologist Max Weber — to bind rulers and ruled together in a common political order, in which the former will pay a heavy price for ignoring the existential needs of the latter. In the European simulacrum of federalism, there could be no “transfer union” along US lines.
Once crisis struck, cohesion in the eurozone could only come from political dictation, not social expenditure. Thus Germany, at the head of a bloc of smaller northern states, could impose draconian austerity programmes, unthinkable for its own citizens, on the southern periphery, no longer able recover competitivity by devaluation.
Under this pressure, governments in the weaker states have fallen like ninepins. The political mechanisms have varied. In Ireland, Portugal and Spain, outgoing regimes presiding over the onset of the crisis have been swept away in elections installing successors committed to more drastic doses of the same remedies as before. In Italy, internal erosion and external intervention combined to replace a parliamentary cabinet with a technocratic one, without recourse to the polls. A regimen imposed by Berlin, Paris and Brussels has reduced Greece to a condition reminiscent of Austria in 1922, when the Entente, under League of Nations colours, posted a high commissioner to Vienna to run the economy. Alfred Zimmerman, the rightwing mayor of Rotterdam and a stalwart of the suppression of a Dutch attempt to emulate the German revolution of November 1918, was picked for the job. He remained in control until 1926 and demanded “more and more economies, more and more sacrifices from all classes of the population,” pressing the Austrian government “to stabilise its budget on a much lower level” (8).
All but universally, the prescriptions applied to restore the faith of financial markets in the reliability of local intendancies include cuts in social spending, deregulation of markets, privatisations of public property: the standard neoliberal repertoire, with increased tax pressures. To lock these in, Germany and France resolved to force the requirement of a balanced budget into the constitution of all 17 nations of the eurozone — a notion long regarded in the US as a shibboleth of the crackpot right.
Hour of a new European hegemon
The nostrums of 2011 will not cure the ills of the eurozone. Spreads on government debt are not going to return to pre-crisis levels. Nor is the accumulation of debt only public, far from it: by some estimates, unsecured bank liabilities may be as high as €1.3 trillion. The problems are deeper, the remedies feebler, the enforcers more brittle than officialdom can admit. As it becomes clear that the spectre of defaults has not gone away, the expedients patched together by Angela Merkel and Nicolas Sarkozy are unlikely to last. The partnership between them was never of course equal. “Harsher forms of German power, pulsing through the market rather than issuing from the high command or the central bank, may lie in store,” I wrote before the crisis broke. “It is too early to write off a regional Grossmacht [big power]” (9). Germany, which is more than any other state the ultimate author of the euro-crisis in driving through a system of wage repression at home and capital relaxation abroad, has also been the principal engineer of the attempts to make the weakest pay for it. In that sense, the hour of a new European hegemon has arrived. With it, has appeared the first unabashed manifesto of German paramountcy in the Union.
The jurist Christoph Schönberger explains in Germany’s most influential intellectual review Merkur that the kind of hegemony Germany is destined to exercise in Europe has nothing in common with the deplorable “slogan of an anti-imperialist discourse à la Gramsci.” He says it is to be understood, in the wholesome constitutional sense expounded by the jurist Heinrich Triepel a century ago, to designate the leading function of the most powerful state within a federal system, such as that of Prussia within Germany in the 19th and early 20th centuries. The EU is just such a system, an essentially inter-governmental consortium gathered in the European Council, whose deliberations are necessarily “sound-proof” to the public: only science fiction could imagine it might ever become “the blue flower of democracy, clean of all earthly institutional residues” (10).
But since the states represented in the Council are vastly unequal in size and weight, says Schönberger, it would be unrealistic to think they could coordinate between themselves on equal terms. To work, the Union requires the state that is a different order of magnitude in population and wealth to give it coherence and direction: Europe needs the hegemony of Germany, and Germans must cease to be shy in exercising it. France, whose nuclear arsenal and seat in the Security Council are now of little relevance, must adjust its pretensions accordingly. Germany should handle France as Bismarck dealt with Bavaria in that other federal system, the Kaiserreich, soothing the lesser member with symbolic awards and bureaucratic balances under Prussian primacy (11).
‘Halfway between an Austrian and a man’
Whether France can so readily be lowered to the status of Bavaria in the Second Reich remains to be seen. Bismarck’s opinion of the Bavarians is well known: “Halfway between an Austrian and a man.” The analogy might not have seemed so outlandish under Sarkozy, in the cleaving of Paris to the priorities of Berlin. But a better parallel is a more contemporary one: the anxiety of the French political class never to be separated from German designs within the EU has become increasingly reminiscent of that other “special relationship” — the desperate British clinging to the role of aide-de-camp to the US.
We may wonder how long such French self-subordination is likely to continue without a reaction. Boasts from the general secretary of the CDU that “Europe now speaks German” are a recipe for resentment more than compliance. Yet for years, in good part because of the massive distortions of the French electoral system, no political class in the EU has been more unanimously conformist in its outlook than that of France. To expect of François Hollande any more robust degree of economic or strategic independence than Sarkozy would be a triumph of hope over experience. Nor, for the same reason, is there any country where the gulf between popular opinion and official exhortation has been repeatedly so deep.
Hollande has come to power in much the same fashion as Mariano Rajoy in Spain, more as the only alternative than through positive voter investment. He could be weakened as quickly as Rajoy once austerity sets in. In the European neoliberal system of which he has become the local intendant, serious popular turbulence has to date surfaced only in Greece — with some premonitory tremors in Spain. Elsewhere, the elites have yet to hear from the masses.
That even acute hardship may not necessarily detonate popular reactions is clear from Russian passivity under the catastrophe of Boris Yeltsin’s rule. But the populations of the EU are less beaten and, were conditions to deteriorate sharply, their fuse could be shorter. Looming at the back of all scenarios is the bleak fact that, even if the crisis of the euro could be resolved without steep cost to the weakest (which is improbable), the underlying contraction of growth would remain.