20 July 2012

Paul N Goldschmidt: The real crisis lies ahead!

The crisis that lies ahead is of a completely different order. It is first and foremost a "political" crisis, whose stakes risk putting into question our democracy, our social model, our values including freedom in its various dimensions, and ultimately peace itself.

All those well-intentioned voices that were giving us assurances, after the recent European Summit, that the (financial) crisis was behind us, were predicating their views on the widely-shared observation that great strides had been made in the areas of financial regulation and supervision, the establishment of financial solidarity mechanisms (EFSF and ESM), as well as profound institutional reforms (the Lisbon Treaty, the Stability and Growth Pact, the budgetary disciplinary treaty, a Community monitoring and surveillance mechanisms, etc.) - all measures that would, almost certainly, never have seen the light of day without the pressure exerted by the crisis.

However, even if its symptoms have surfaced mainly in the financial and economic fields, the crisis that lies ahead is of a completely different order. It is first and foremost a “political” crisis whose stakes risk to put into question our democracy, our social model, our values including freedom in its various dimensions, and, in fine, peace itself, all factors that the current generations consider – wrongly - as permanent “rights” that have been conquered once and for all!

In a globalised world – for better or for worse – pursuing further European integration has become a vital necessity if one aims at protecting the superior interests of all European citizens. It is, nevertheless, quite obvious that a political bipolarisation, whose aims are totally incompatible, is gradually taking root: on the one hand a drift towards nationalist/populist and strongly europhobic tendencies and, on the other, a more recent support for the instauration of a “Federal” Europe.

It is hardly necessary to demonstrate the growing appeal of extremist parties who advocate euroscepticism, protectionism and inward-oriented policies as part of their simplistic and misleading credo, that relies heavily on fingering scapegoats, be they bankers, unemployed, immigrants or simply “different”. Their superficial rhetoric is apt at seducing the growing numbers of people that society has deceived or left on the roadside; furthermore, the resurgence of financial scandals (LIBOR, money laundering etc.) reinforces the loss of trust in the competence, the ethics and the political will of the established authorities.

One should, of course, welcome the resurgence of support for a “federal” Europe, an idea which has become at least “politically acceptable” if not yet “politically correct”, despite the fact that it remains still largely elitist. The reason for this is due to the incapacity and, often, the lack of political will to endorse these crucial proposals in front of a wavering public opinion. This generalised abdication of responsibility has fundamentally structural causes which vary from one country to another. Indeed, national political oppositions, even between parties that are basically favourable towards federalism, seem always to trump a shared European vision, playing into the hands of the nationalist/populist opposition that capitalises on the division of the largely silent majority.

Nowhere is this phenomenon more visible than in France where, during the recent elections, both major parties tried to attract their competing extremist rivals on their left and their right. Both the Socialist Party and the (outgoing) UMP harbour significant minorities opposing sovereignty transfers as well as implementation of protectionist measures making it difficult to imagine building a majority in favour of “federal” Europe, so great is their visceral partisan opposition precluding any form of cross party understanding. The record level of abstentions and the crushing of the Centrist party by the French voters confirm the demonstration.

To these problems, which make agreements at national level already sufficiently complex, should be added the difficulty of finding common ground on the selection of a European integration model that can satisfy the diversity of traditions that pervade the history of each of the Members of the Union.

At European level, there is an urgent need for a paradigm change: one should stop pretending that addressing economic and financial challenges – however important they may be – constitutes the main and particularly a “sufficient” objective. The absolute priority should be to foster the citizen’s willing adherence to the establishment of a “political” Europe, because only the Union, endowed with the necessary powers, can provide a credible solution to the economic and financial crisis. Only then will it become possible to deal not only with the challenges of unemployment and purchasing power, but also with those dealing with security and justice which are closely intertwined with the maintenance of our social model.

A degree of optimism seems in order because Europe, taken globally, has access to the necessary resources to overcome the crisis, thanks to its wealth, its level of education and its capacity for research and innovation; harnessing these efficiently requires, however, significant further integration accompanied by increased European-wide solidarity.

On the other hand, the lack of political will within each of the Member States constitutes Europe's greatest handicap. Without a general mobilisation of public opinion in favour of European integration, the sirens of the “nationalist” dream will quash all resistance by capitalising on the inability of their opponents to agree on the main objective.

It behoves the political class as a whole to lead the way. If that occurs, financial and economic leaders will be only too happy to serve them loyally in their endeavours.

© Paul Goldschmidt