09 March 2014

Wolfgang Münchau: Once again national interests undermine Europe

Europe’s collective-action problem is not new; its epochal scale is. In 2007 the EU and its institutions did not see the financial crisis coming. In 2008 they misjudged the impact of the bankruptcy of Lehman Brothers. In 2009 they did not see the Greek sovereign debt crisis coming, and from 2010 onwards they underestimated the impact of that.

One of the lessons of that episode is not to allow a small financial crisis to become large. Serial failures led to a loss of reputation. The Europeans no longer have the ability to scare. Mr Putin is the kind of leader who can smell that.

The EU is not completely dysfunctional. It still works well in specific areas – where it has clearly defined competencies, as in trade or competition policy, and the interests of Member States are naturally aligned. An example of the latter is last year’s nuclear agreement with Iran.

The EU has been reduced to a technical facilitator. It is still useful – but mostly in the sense that a butler is useful. Powers are not delegated upwards but downwards. And when you happen to appoint a weak under-butler – as they did with José Manuel Barroso, the president of the European Commission – disorder ensues.

There is no easy way back. Moving sovereignty over the energy sector to Brussels would be as fraught as last year’s attempt to create a joint resolution framework for the banking system. It would require a rewrite of the European treaties. I cannot see how electorates in austerity-stricken Member States will accept more integration – for as long Mr Putin does not move his tanks into EU territory.

You could make a similar argument for the eurozone. Two groups of French and German intellectuals recently drew up a blueprint to forge a political dimension to the monetary union. They include some good ideas. The problem is that eurozone leaders have already taken all the important decisions – from the rescue fund to the fiscal treaty to a bank resolution agreement. The proposals are still useful. But they are for the next crisis.

Mr Putin has unwittingly given pro-Europeans their most powerful campaign argument for the upcoming European elections: the price we pay for populist pandering to our national interest is to let the likes of Mr Putin play us off against one another.

© Financial Times