What about changing the EU, for a starter?

By Paulo Vila Maior, Assistant Professor, the Faculty of Human and Social Sciences, University Fernando Pessoa, The article was originally published in Slovak daily Pravda in the op-ed section.

The resilience of the on-going crisis means one of two things (or maybe both at the same time). On the one hand, past solutions designed to tame the crisis were not able to provide expected results. The crisis resisted to quasi-solutions envisaged by European leaders. On the other hand, markets are sceptical about future fiscal policy sustainability in the Eurozone, as they still punish countries’ public debt where high indebtedness (or other structural problems, as in the Spanish case) persists. I refuse to embrace the conspiracy theory according to which markets seek the destruction of the Eurozone. One must not forget that it is within markets that indebted countries find their lenders. And lenders obviously want to protect themselves against the prospect of default.

Since the crisis threatens the survival of the Eurozone, change is deemed necessary. This change is mostly needed on the Eurozone governance, although the European Union (EU) as a whole also embraces the plea of changes. Nonetheless, substantial changes both in the Eurozone and in the EU at large call for EU treaties’ amendment, and therefore for consensus within member states. To what extent European leaders are willing to allow profound changes in the nature and the operation of the Eurozone and the EU is the key issue.

My perception is that current European leaders lack a European vision. They are much concerned with domestic politics. This is markedly the case of Germany, where general elections in September 2013 explain how Merkel resists ambitious changes in the Eurozone governance at first. True, she calls for political union as a precondition for large-scale programmes that might be helpful for those member states facing public debt sustainability issues. But political union, as it is conceptualised by the German government, puts conditions that are hardly acceptable by other countries’ leaders, especially if it is confirmed that countries that do not abide by the rules of stricter fiscal discipline must be supervised by EU institutions. They consider this condition a blow on national sovereignty. All in all, the lack of a European vision is not exclusive in Germany. It affects other European leaders.

The problem is the fragmentation of national politics and the natural non-synchronisation of national electoral cycles. Domestic considerations tend to prevail over EU-wide goals. To add to this problematic dimension, the definition of EU-wide goals is not consensual. It depends on the myriad of approaches to the EU as polity, as well as on different ideological inputs to the future of European integration.

The most difficult problem the EU must overcome is the gap between desirability and feasibility. In other words, several observers are aware this is the time to implement considerable changes in the Eurozone governance and in the EU’s nature and institutional architecture. They find it reasonable and, to this extent, desirable. Nevertheless, desirability clashes against political feasibility, notably the resistance coming from national governments and national leaders with absent commitment to a EU leap forward. I recognise that the current crisis calls for ambitious reforms in the Eurozone governance and the EU as a whole. The depth and persistence of the current crisis is the evidence of how the EU and the Eurozone need a big step forward. They need uncompromised federalist clothing.

The Eurozone governance needs fiscal federalism. I am not so sure about the desirability of Eurobonds (even though we think about a limited modality of public debt mutualisation, as it seems to be accepted by the German government). The EU institutional architecture needs changes in order not to be subordinated to national vetoes when crucial modifications are at stake. Once and for all, member states should recognise that sovereignty has a different meaning, now that increasing interdependence strips national governments’ autonomy away. The taboo of national sovereignty (as the only locus of sovereignty in the EU) does not make sense in an increasingly changing world. Consequently, the EU should be assigned with sovereignty. And the EU should deal with problems that national governments alone can hardly face.

The challenge ahead is not so much the preservation of sacred cows (the anachronism of national sovereignty) but peoples’ welfare. Now it is time for a utilitarian approach of European integration that falls outside the gridlock of history, tradition and national idiosyncrasies.


One Response

  1. Greater fiscal integration is not the devil it is made out to be.

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