Democracy or Bust in Europe
BERLIN – “Europe will be democratized or it will disintegrate!” That maxim is more than a catchphrase from the manifesto of the Democracy in Europe Movement – DiEM25, the group I just helped to launch in Berlin. It is a simple, if under-acknowledged fact.
Europe’s current disintegration is all too real. New divisions are appearing seemingly everywhere one looks: along borders, within our societies and economies, and in the minds of Europe’s citizens.
Europe’s loss of integrity became painfully evident in the latest turn in the refugee crisis. European leaders called upon Turkish President Recep Tayyip Erdogan to open his country’s borders to refugees from the war-torn Syrian city of Aleppo; in the same breath, they chastised Greece for letting the same refugees into “European” territory, and even threatened to erect fences along Greece’s borders with the rest of Europe.
Similar disintegration can be seen in the realm of finance. If an American citizen won some lottery jackpot, she would not care whether her prize dollars were deposited in a bank domiciled in Nevada or New York. This is not so in the eurozone. The same sum of euros has very different “expected” value in a Portuguese, Italian, Greek, Dutch, or German bank account, because banks in the weaker member states are reliant on bailouts from fiscally stressed governments. That is a sure sign of the single currency’s disintegration.
Meanwhile, political rifts are dividing and multiplying in the European Union’s heartland. The United Kingdom is torn on whether to exit or not – a reflection of its political establishment’s own chronic unwillingness both to defend the EU and to confront its authoritarianism. The result is an electorate prone to blaming the EU for everything that goes wrong, but with no interest either in campaigning for more European democracy or in leaving the EU’s single market.
More ominously, the Franco-German axis powering European integration has fractured. Emmanuel Macron, France’s Economy Minister, could not have put it more chillingly when he said that the two countries are edging toward a modern version of the Catholic-versus-Protestant Thirty Years’ War.
Meanwhile, southern countries languish in a state of permanent recession that they blame on Europe’s north. And, as if this were not enough, another menacing fault line has appeared along the former Iron Curtain, with governments of formerly communist countries openly defying the spirit of solidarity that used to characterize (at least in theory) the European project.
Why is Europe disintegrating? And what can be done about it?
The answer lies in the EU’s origins. The EU began life as a cartel of heavy industries determined to manipulate prices and redistribute monopoly profits through a bureaucracy located in Brussels. To fix prices across European borders, there was a need to fix exchange rates as well. During the Bretton Woods era, the Unites States provided this “service.” But as soon as the US ditched Bretton Woods in the summer of 1971, the Brussels-based cartel’s administrators began to design a European fixed exchange-rate system. After a series of (often spectacular) failures, the euro was born to superglue exchange rates together.
As with all cartel managers, the EU technocrats treated genuine pan-European democracy as a threat. Patiently, methodically, a process of de-politicizing decision-making was put in place. National politicians were rewarded handsomely for their acquiescence, while anyone opposed to the cartel’s technocratic approach was labeled “un-European” and treated as an outsider.
Thus, although European countries remained democratic, the EU institutions, where sovereignty over crucial decisions was transferred, have remained democracy-free. As Margaret Thatcher explained during her last Parliamentary appearance as British Prime Minister, who controls money and interest rates controls the politics of Europe.
Handing Europe’s money and politics to a cartel administration did not only spell the end of European democracy; it has also fueled a vicious cycle of authoritarianism and poor economic results. The more Europe’s establishment chokes off democracy, the less legitimate its political authority becomes. That leads European leaders to double down on authoritarianism in order to stick to their failed policies when recessionary economic forces strengthen. This is why Europe is the world’s only economy that has failed to recover since 2008.
It is through this vicious cycle that Europe’s crisis is turning its peoples inward and against one another other, amplifying latent jingoism and xenophobia. Indeed, it is what has rendered Europe incapable of absorbing external shocks – like last summer’s refugee influx.
What we should do now is what democrats should have done in 1930 to prevent a catastrophe that is now becoming imaginable once again. We should establish a pan-European coalition of radical, social, green, and liberal democrats to put the “demos” back into democracy, countering an EU establishment that sees people power as a threat to its authority. This is what DiEM25 is about and why it is necessary.
Are we utopian? Maybe. But it is more realistic than the EU establishment’s attempt to hang on to our disintegrating, anti-democratic, cartel-like union. If our project is utopian, it is also the only alternative to a dystopia in the making.
The real danger is not that we shall aim too high and miss. The real danger is that Europeans train their eyes on the abyss and end up there.
Yanis Varoufakis, a former finance minister of Greece, is Professor of Economics at the University of Athens.