27 June 2013

Nikolas Busse: Misfortune of the moment

Half the continent is struggling with huge debt, encrusted economies and oppressively high unemployment rates, writes the FAZ's Busse. But European problems can no longer be solved by "more Europe". Nothing has come so far of the call for "political union" to deal with the continent's crisis.

Translated from the German

With its promise to "do whatever it takes" to save the euro, the European Central Bank (ECB) has managed to calm the markets, but the problems of the eurozone remain far from being resolved. The euro crisis has transitioned seamlessly into a severe economic crisis and politicians have responded to this "normal" recession as usual: The will to change the rules and regulations of the monetary union continue to shrink proportionately to the decrease in interest rates in the peripheral Member States. At the European Council, which begins on Thursday, the EU leaders will resort to a proven and tested solution to unpleasant decisions: They will adjourn the matter.

At the beginning of the crisis three years ago, many people, especially in Germany, believed that the evident weakness of the monetary union could only be resolved by transferring more competences to EU level. But despite countless crisis summits and several new European laws, the monetary union has not changed fundamentally in its layout. The only really big change has been the creation of the European Stability Mechanism (ESM) - not wanted by (German) policy-makers, but urgently required by the markets.

The old credo that European problems are best solved by "more Europe" has been shaken to the core by the euro crisis. In most Member States support for the European project has dwindled. European integration might have reached a point at which the people of Europe perceive that they are supposed to abandon their national identities.

With the European elections next year, however, a new debate about deepening European integration will arise, whether just for the eurozone or for the EU as a whole. The Commission and the European Parliament have a strong (self-)interest in furthering these discussions but will face resistance from sceptical Member States: The British demand to transfer back some powers to the national level is now gaining support in the Netherlands as well. These are indeed not favourable conditions for a treaty reform.

Full article (in German)

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