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Europe in the International Order


Roman Kuźniar

The subject of this work is the rise and fall of Europe’s aim to rebuild its position in global politics after the Cold War. With success in the unification of Europe and the subsequent deepening and enlargement of its integration, the Union set itself the ambitious task of becoming a global power, even a superpower.
However, starting with the first decade of the XXI century, we have witnessed a rapid erosion of the international position of Europe (the EU). The author carefully analyses the causes of the EU’s failure in pursuing the role of European representative, Europe thereby pretending to the role of one of three world powers. Besides cultural and demographic trends, the author identifies the main factors leading to this failure: the divergent interests of individual European powers, their incapacity to act in a geopolitical context and the rapid erosion of Europe’s civilizational identity.
The rapid decline of Europe’s international position threatens the appearance of a new and bipolar global arrangement together with the further marginalisation of Europe.

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10 Crisis as an Ending

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10 Crisis as an Ending

Any crisis may be approached in an optimistic spirit by perceiving it, in what is said to be a Chinese tradition, as an opportunity – a moment to repair or rebuild a fragment of social reality. Everyone who has been concerned with European integration has in their mind the words of Jean Monnet: “Europe will be forged in crises, and will be the sum of the solutions adopted for those crises”. The course of the European Union (EU) crisis in the years from 2009 to 2016 suggests that Europe has not “passed the test” – it does not seem to have offered a response which represents an opportunity, a chance to repair faults, to revitalise the project of European unity as the founders intended at the turn of the forties and fifties of the last century – Monnet among them. This inadequate response is due to the fact that we are not really dealing with a crisis of the Union (one crisis) but with a Union (Europe) of many crises. There has not been a situation like this since the establishment of the first community in 1951. The status of the EU in this crisis is analogous to a serious illness in the body (e.g. a major heart attack). When an illness of this kind occurs, other illnesses or weaknesses in the body become manifest, though they had been hidden and unnoticed before. These secondary illnesses might not be dangerous in themselves, especially with an overall state of good health – a strong healthy system can keep them under control and fight them off naturally. But after a heart attack.

1 Struggle with the financial–economic crisis (i.e. the EU is busy with itself)

The distinguished economist Professor Witold Orłowski gave a pithy statement of the essence of the financial–economic crisis. (It directly affected the eurozone, but ultimately the entire EU was impacted, though only some of the countries in each group were deeply affected.) The first point of Orłowski’s analysis was that a few countries in the eurozone stood on the verge of bankruptcy. Secondly, the crisis revealed the loss of competitiveness of those countries’ markets and the fall in competitiveness of a few other markets as well. Thirdly, problems reached crisis point because of a lack of supervisory-preventative mechanisms (crisis management). Fourthly and finally – and perhaps the most challenging issue for the future of the eurozone – the crisis exposed the gulf in economic culture between the countries of the South and North of Europe, between traditions of doves and hawks in monetary policy. These traditions had not been united despite the ← 181 | 182 → introduction of the common European currency.224 The countries known by the unflattering acronym of PIGS – Portugal, Ireland, Greece and Spain – found themselves in a particularly difficult situation, with PIGS becoming PIIGS as Italy joined them. Strict austerity programmes quickly brought positive results in all the countries so named, with the exception of Greece. Greece had become a specialist in avoiding and abusing EU regulations, including in particular regulations governing monetary–economic union: budget limits, public expenditure limits, regulations on national insurance and taxation, in short: living beyond their means, at the cost of the remaining eurozone countries, especially the wealthiest. The level of demoralisation of the Greek political elite and Greek society was so great that Greece– seeing that the time of cheating is coming to an end – turned its anger against those who had been supporting them and who could still save them. The spectre of “Grexit” appeared – the exit of Greece from the eurozone. Greek citizens most of all protested against the idea of Grexit at the same time portraying Angela Merkel as a Nazi, even though it was she who was most involved in saving Greece. It needs to be added that this “help” was also in the interest of German private banks which financed the Greek “living beyond their means”; the bankruptcy of Greece meant loss of capital for those banks. In the European press, the nations of Southern Europe have been accused of being lazy and spendthrift, while the northern nations are tight workaholics. It is interesting that both have been accused of bringing about the crisis in the eurozone: one group has imposed monetary–economic discipline in a dictatorial fashion while the other group is lax.

In 2009, the gross domestic product (GDP) for the EU as a whole dropped by four percentage points (with Poland alone sustaining positive economic growth); escaping this crisis required many undertakings painful for countries in both the aforementioned groups. All the steps were negotiated with the participation of member states, the Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). Which is why the process of finding solutions and taking decisions took longer than public opinion expected. The ensuing tension gave the impression that not only the eurozone but the entire EU could collapse at any time.

There were three kinds of response deemed necessary. The first was the negotiation of the sharing of the costs of the crisis between debtors and creditors – that is between those who had taken out loans to cover public debt so as to sustain ← 182 | 183 → levels of public service beyond what the national income would permit and those who granted loans turning a blind eye to the creditworthiness of the borrowers. This was somewhat akin to the situation of subprime borrowers in the United States, only at the level of governments. Secondly, there was a need to create conditions for renewed growth for those countries who were mired in debt. This was achieved by a series of expensive bailouts, aid for the banking sector to preserve the liquidity of the finance system of those countries. The bailouts helped keep heads above water, but came at the cost of increased internal debt, a burden on future generations and a reduction in future growth potential. Thirdly, it was necessary to find a long-term solution to the malfunctioning eurozone to avoid future crises and crashes. All these elements were summed up as follows: firstly, save Greece from bankruptcy; secondly, bailout packets and mechanisms and thirdly, a “life jacket” for the eurozone.225

The discussions to reach agreement on all these solutions were carried out in a tense atmosphere, with the hysteria of the financial markets (including predatory-speculative trading on the value of securities), the games played by ratings agencies which had previously provided unreliable evaluations, often consciously, thereby contributing to a false economic picture which in turn contributed to the crisis. The climax of the Greek crisis in 2010 was a real thriller – it seemed just a question of time before the first country left the eurozone, presumably bringing others in their wake. And just such a scenario was anticipated by several experts.226 There was a serious threat to the eurozone itself, which by saving itself had to take care not to break up the EU (or to introduce an institutional divide within the EU).227

The bailout went as follows, in keeping with the challenges facing the EU and the eurozone. Firstly, a temporary instrument called the European Financial Stability Facility (EFSF) was created. It was intended to protect threatened countries from bankruptcy, especially Greece, and it was active until the end of 2010. Next, the European Stability Mechanism was set up, which required the amendment of the Treaty on the European Union (TEU), in this embodiment ← 183 | 184 → the mechanism was already an international organisation with its seat in Luxembourg. Its goal was to grant aid to countries threatened with loss of the stability of its public finances. The ESM was equipped with enormous capital for loans – around 700 billion euro (also due to its emissive power). Finally, in March 2012, there was signed the so-called fiscal pact, that is the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG). The treaty is intended to counteract at a structural level the debt and public finance deficits in member states. The treaty established norms which could not be violated, response procedures (and pre-emptive measures) as well as sanctions for infringing agreed precautionary barriers.228

The real “hit” in saving the eurozone was 2012s unconventional decisions of Mario Draghi and the ECB he headed. “Super Mario” first decided to guarantee for three years the possibility of obtaining unlimited loans by large and unstable commercial banks (to sustain their credit rating). His risky decision to buy an unlimited amount of government bonds on the secondary market was considered a breakthrough. It undermined large-scale speculation, calmed the hysterical “financial markets” and removed the spectre of bankruptcy from the weakest countries of the eurozone.229 At the same time, work began on EU banking, that is the creation of joint supervision mechanisms for the largest banks of the eurozone (and not only supervision was envisaged, i.e. caution, but also mechanisms ensuring liquidity). These steps thankfully were effective, though the EU had to devote almost all its collective energy to them (there were countless meetings of heads of state and government and ministers of finance). This situation continued, with occasional breaks, practically until June 2015 when it was once again necessary to save Greece from bankruptcy and from its exiting the eurozone. “In the meantime”, the EU also had to save the Cypriot banking system.230 ← 184 | 185 →

2 Political–institutional crisis

A financial–economic crisis as deep as this one had to provoke political problems and these quickly turned into a political–institutional crisis of the EU. Its manifestations included the legitimation problems of EU organs and their competencies and decisions, the return to the nation state in the EU’s functioning, the prospect of deepening integration in the eurozone, that is the possibility of a multi-speed Europe. There also appeared the question of the federalisation of the EU, i.e. the optimal degree of its integration in terms of its capacity to solve the problems facing it (meaning the problems facing its members states), and not the problems which it created itself – as in the digs of some commentators, not entirely unfairly.

The fiscal pact was undoubtedly itself a step towards deeper integration, especially in the eurozone. It introduced a broader area of coordination in economic and social policy. The conviction strengthened that the eurozone would require more coordination in the long term, as well as adjustments in taxation, social benefits and – what was most challenging but within the realm of possibility – an increased redistribution of incomes between markets as diverse as Germany and Greece (diverse in terms of their competitiveness and economic culture). Such extensive solidarity would, it was felt, lead inevitably to a separate budget and quasi-government for the eurozone. In connection with these challenges, the president of the European Council Herman Van Rompuy prepared a 2012 report entitled Towards a Genuine Economic and Monetary Union. Formally, it included proposals for the entire EU but in practice was designed for the eurozone. Deeper cooperation was envisaged in four main areas: financial, budgetary, economic and political. The financial area included above all the banking sector, as mentioned above. The budgetary issues included assurances of healthy fiscal policy, including the element of joint handling of debts and financial support, in return for reforms. In the economic sphere, the intention was to ensure growth, employment and coherence, thanks in part to a thoroughgoing convergence of the eurozone’s markets. The proposals for the political sphere were not only about decision-making capacity but also about creating for these decisions mechanisms of democratic legitimation, which might imply the creation of a separate (separate from the European Parliament) parliament for the eurozone countries.

Van Rompuy’s plan did not emerge in a vacuum. The crisis had prepared the groundwork for the discussions on the further federalisation of the EU on the one hand, and on the lack of democratic legitimation on the other. For many politicians and experts, it was clear that effective responses to the problems facing the EU – from internal challenges to the stability of the euro in the context ← 185 | 186 → of cultural–economic diversity in the eurozone – require deeper integration. At stake was a so-called federalist or community breakthrough or leap. Something akin to Rome 1957 or Maastricht 1992, that is the passing of another major portion of member-state powers to international organs, in the name of greater solidarity and the achievement of other EU goals. The practical consequences might be the increased redistribution of earnings, an energy union or joint border security for the EU (member states). It might have seemed that the route to such a breakthrough or to a true, tighter federation within the EU would be the fiscal pact perceived as the foundation for the new institutional architecture of the “core” of the EU, around which the European periphery would function, according to any logic chosen: whether of various speeds, diverse geometry or concentric circles.231 Articles by French authors in the press encouraged these hopes, in “Le Monde” and “Financial Times” appeared texts with titles such as “The EU is dead – long live the eurozone!” or “Thank-you My General, Good morning Jean Monnet”232 (de Gaulle was a supporter of the intergovernmental approach, Monnet – the community approach). These articles were insincere or at least premature since it was France that was to become at that moment the defender of the interests of individual states and their sovereignty in the process of integration. For the French, or at least a large portion of French society, this was in fact a means of getting rid of the UK from the leadership of the EU, and perhaps from the EU altogether, a goal which did not, however, suit Berlin.

On the other hand, some – such as the director of the European Council on Foreign Relations Marc Leonard – were aware that “what is necessary is not possible”. He meant deeper integration as a condition of sustaining the vitality and coherence of the European project (and even its mere survival) for which there is currently no political understanding and support in the EU.233 Federalists, such as vice president of the European Commission Viviane Reding, have even spoken of the historic opportunity to realise the vision of a United States of ← 186 | 187 → Europe.234 However, careful observers such as Professor Andrew Moravcsik from Princeton have claimed that the process of European integration has achieved a natural plateau for the foreseeable future. The approach of ever-closer union must be held back, as there is no social mandate for an all-encompassing, European federal state. Despite this fact, Moravcsik believes that, “The EU will remain the most successful example of voluntary international cooperation in history”.235 He forgot to add that nothing can be given once and for all.

The heart of the matter is not the disputes between the supporters of various conceptions of European integration, disputes which have been carrying on since the turn of the forties and fifties when the European Council sufficed for some, but others wanted to go further and establish the European Coal and Steel Community. This dispute continued right up until the Lisbon Treaty with politicians and experts involved in the entire process. With few exceptions, the initiative has been taken by the supporters of the ever-closer union, invoking the logic of Walter Hallstein comparing European integration to riding a bike: if you do not wish to fall, you need to keep pedalling. Since the 2008 crisis, many maxims of this kind have been subjected to critical analysis. Since that time, progress in integration, the permanence and shape of the European project have ceased to be the exclusive domain of politicians, diplomats and thinkers. Deeper integration has evidently lost support from the nations and countries of the EU. Demonstrations and electoral decisions have made this clear. In times of crisis, there has been a return to the nation state as the most credible locus of institutions of rule in difficult circumstances. A significant section of public opinion has begun to perceive the EU not so much as ineffective as the very source of European problems or at the very least a barrier to their solution. Alongside eurosceptic parties and milieu, there has appeared, for the first time since the fifties, groups openly hostile the EU, groups demanding its liquidation. They were not yet able to command majorities in opinion polls, but they were able to rely on 5–20% support in some countries as well entering national parliaments and the European Parliament in some cases. This phenomenon affected both “old” and “new” EU countries (e.g. France, Holland, the UK, Greece, Poland and Hungary).

And then for the first time in the history of the Community, a member state has decided to leave – the UK. In times of crisis, the UK has decided to take advantage of a weak EU and reject its previously endorsed commitments which ← 187 | 188 → had become uncomfortable. As one might have imagined, the British blackmail (“Either the agreement of all remaining members, or we are leaving…”) only deepened the general crisis of the EU. The spectre of so-called Brexit – following the pattern set by “Grexit” – has started a chain reaction where other countries have begun demanding the same.

The socially hard-hitting austerity measures, also referred to as a “weight-loss programme” brought again to the fore the question of the democratic legitimation of the EU. The decisions to accept these measures in exchange for support from the EU were reached in the course of negotiations between the affected governments and the EU organs or eurozone organs. The nations in question were merely informed. “A divided Europe looks into a Greek mirror. This is the meaning of the drama: the less democracy, the better for the markets”, wrote Jürgen Habermas commenting the violent demonstrations in Greece.236 The EU countries from “the North” in 2011 imposed the rejection of a referendum by Athens on the acceptance of the drastic budget cuts – as a condition of further support. The referendum was a bad idea, a populist idea – after all, similar referenda could be organised in the supporting countries (e.g. in Germany or Holland), and Greece, which had previously driven its economy into the ground, would have been left alone with its troubles. As evidence of this situation, we may take the referendum that did come to pass in spring 2015 where Greeks rejected the terms of proposed aid and the populist government decided a moment later to adopt even stricter conditions to save Greece from otherwise inevitable bankruptcy and its exit from the eurozone.237 Of course, in this case, not the EU but the democratically elected governments were to blame. It was they who, in the course of globalisation, not only allowed financial markets to break away from their economies, but also allowed for living beyond the society’s means, including tax cuts which could not be sustained in tandem with costly social benefits and other elements of their welfare state. Low taxes were a point of neo-liberal doctrine and the politics of individual states and not of the EU. The EU was perceived as a locus of wealth but now it could no longer afford to carry the promises inter alia implicit in the welfare states of its members. On the other ← 188 | 189 → hand, it was essentially the nation states which were in possession of the mandate for sometimes severe austerity measures. In hard times it is easier for (national) governments to gain the social support needed for tough decisions and reforms. The pro-European rhetoric and the competencies of the EU organs in Brussels were easier to digest in better times. This was aptly put by Olaf Osica who wrote in 2011 that, “the way the crisis is experienced by various states, tends more to increase national identity in a divided Europe than to lead to the beginning of a new sense of being European”.238

The crisis revealed the European project to be like La Fontaine’s fable “The Milkmaid and Her Pail” where the milkmaid’s daydreams are spoiled by her spilling the milk she already has, while walking to the market. The EU has an ambitious vision for the future, but these dreams are easily broken by national identities which impact individual countries in their attitude to deeper integration, in their readiness for the federalisation of the EU. And it even turned out that some founding countries were not exhibiting enthusiasm to divest themselves of the attributes of sovereignty. Which is why with each passing year, the crisis came more and more to shake the balance between the competencies of community organs (transnational) and international organs – to the benefit of the latter. This came about under the influence of the big powers, especially Germany. The trend initiated by Berlin was noticed by experts and politicians and Piotr Buras, the director of the Warsaw Office of the European Foreign Affairs Council, called it a “silent revolution in the EU”, that is a “new intergovernmentalism” in steering the EU’s “nave”.239

The deepest crisis in the history of the Community coincided with the terms in office of weak and often not even serious leaders. In France, the president was the hyperactive, capricious and egocentric Nicolas Sarkozy, while Italy was run by a character straight out of burlesque – Silvio Berlusconi. The man was known as “Bunga” after his private, obscene parties (the term’s real meaning being known only to the invited). Then the colourless socialist Zapatero drove Spain into economic crisis. The conservative prime minister of Great Britain decided to gamble the membership of his country for special status in the Community. His whole behaviour was evidence that he did not attach great importance to the condition or even the continued existence of the EU. David Cameron’s Great Britain seemed to coexist almost alongside the EU, and the reform of the eurozone – whose survival ← 189 | 190 → London seemed count on – was important to the English because and only because the City’s interests were also at stake. In several other EU capitals, leaders were weak on the economy and weak from the social instability of their countries. To strengthen their position or preserve their power, they tried to consider their national interests, ignoring at the same time the interests of the EU as a whole.

The exception was Angela Merkel. Thanks to the health and power of the German economy, as well as the role Germany played in saving the eurozone, it quickly became the undisputed leader of the EU. Not always quick in action but stubborn and consistent Germany has gained authority and even the nickname the “Empress of Europe”. The chancellor compares well with her rather bland colleagues from the other main countries from “Old Europe”. Besides that, external powers (the United States, Russia, China) attest Germany’s leadership – when they address a question to Germany, it is understood they are addressing the whole of Europe. This suited Berlin’s growing tendency towards unilateralism, in any case a feature of other EU powers (e.g. France and the UK’s actions against Libya without consideration of the position of other EU states). It was clear that in external relations the EU powers prefer to act independently without being straightjacketed by a strong EU position. The previous axis of Paris and Berlin became a distant memory and summits were more a matter of nostalgia and habit than meetings for the preparation of serious proposals. An extreme example of the crisis of EU leadership was the aforementioned and embarrassing spectacle of Sarkozy with his begging bowl at the 2001 G-20 summit in Evian, where he was chair. The EU’s refusal of support was partly an expression of the conviction of the wealthier members that “Europe is rich enough to manage”, but more significantly, it was a way of punishing France for their breaking ranks in their actions against Libya a few months prior to the summit. Paris’ requests had a poor effect of the image of Europe which was no longer able to be the model nor the mentor. The joint effect of all these and other factors was the drift of the Community – both internally and in external relations – and a more evident weakness, lack of unity, powerlessness.

Researchers and experts are only too keen to extend (or change) the categories of crisis the EU has been experiencing since 2009. For example, Professor Bogdan Góralczyk writes about the crisis of leadership (or vision), the economic crisis, institutional crisis (“deficit of democracy”), the crisis of basic values and the security crisis – a total of five different crises.240 Donald Tusk, the president ← 190 | 191 → of the European Council, also spoke about five crises at the end of 2015: Russia, migration, terrorism, Greece and Brexit (it being clear that some of these are short- or medium-term challenges241). And there was no mention here of the demographic crisis which in the long term may have much more catastrophic effects than any of the other crises. Paweł Świeboda, a penetrating expert on integration, made a sharp observation in his report Europa: plan przetrwania [Europe: Survival Plan] where he claims that during the last fifty to sixty years, Europe has prepared itself mainly to repel external threats, where suddenly there has appeared an internal crisis threatening the EU’s existence, one towards which the EU appears to be rather defenceless.242

224 W. Orłowski, Jak podzielić ból [How to Share the Pain], “Gazeta Wyborcza”, 23 April 2012.

225 Ibidem. Foreign authorities were of a similar opinion – for example N. Ferguson or N. Roubini.

226 In Poland, for example S. Kawalec, E. Pytlarczyk, Rozwiązać strefę euro [To Disband the Eurozone], “Gazeta Wyborcza”, 11 April 2012; see also: A. Słojewska, Scenariusze rozpadu strefy euro [Scenarios of the Collapse of the Eurozone], “Rzeczpospolita”, 18 April 2012.

227 See for example: R. Kuźniar, Euro uratowane – ale co z Unią [The Euro Is Saved – But What of the EU?], “Rocznik Strategiczny” [“The Strategic Yearbook”], 2012/2013.

228 P. Borkowski, Kryzys – światełko w tunelu [Crisis – The Light at the End of the Tunnel], “Rocznik Strategiczny” [“The Strategic Yearbook”], 2012/2013.

229 J. Almunia, Gdyby nie ratować banków [If We Did Not Save the Banks] (a conversation between the vice president of the European Commission and L. Baj), “Gazeta Wyborcza”, 29–30 September 2012.

230 The Cypriot banking system was bloated out of all proportion because of the needs of servicing the local economy. It had been colonised by Russians (money-laundering and tax avoidance). It would have collapsed were it not for the EU’s intervention. To avoid collapse, Cyprus agreed to adopt an austere bailout package prepared by the EU.

231 J. Pawlicki, Unia kilku prędkości [Multi-speed EU], “Gazeta Wyborcza”, 27 October 2011 r.; J.-C. Piris, An EU Architect Writes: Time for a Two-Speed Union, “Financial Times”, 4 November 2011; J.-J. Mevel, Le scénario d’une Europe à plusieurs vitesses, “Le Figaro”, 5 December 2011.

232 P. Ricard, L’UE est morte, vive la zone euro, “Le Monde”, 15 October 2011; T. Klau, Merci mon Général, bonjour Monsieur Monnet, “Financial Times”, 19 October 2012.

233 M. Leonard, Il faut briser le cercle vicieux du déclin de l’Union européenne, “Le Monde”, 30 August 2011.

234 V. Reding, Stany Zjednoczone Europy [A United States of Europe], “Rzeczpospolita”, 13 December 2012.

235 A. Moravcsik, Europe after the Crisis, “International Herald Tribune”, 22 April 2012.

236 J. Habermas, Nie o taką Europę szło [That Was Not the Europe We Wanted], “Gazeta Wyborcza”, 19–20 November 2011.

237 The spectacle of Greeks dancing after the “victory” in the referendum was a sorry sight. It recalled Zorba the Greek dancing after his “beautiful catastrophe” which he himself caused. Greece brought on itself its economic catastrophe. Slogans of a “proud nation” from the populist Prime Minister Alexis Tsipras were of no use in tough negotiations with Brussels. They only proved the infantilism of their approach.

238 O. Osica, Unia stanu wyjątkowego [EU State of Emergency], “Tygodnik Powszechny”, 13 November 2011.

239 P. Buras, The EU’s Silent Revolution, Policy Brief, ECFR, September 2013.

240 B.J. Góralczyk, The Crises of 2008 and 2014 and the New Role of the European Union on the Global Scene, in: B.J. Góralczyk (ed.), European Union on the Global Scene: United or Irrelevant?, Centre for Europe, Warsaw, 2014, pp. 233–246.

241 D. Tusk, Chrońmy granice Unii [Let’s Protect the EU Borders] (in conversation with T. Bielecki), “Gazeta Wyborcza”, 3 December 2015.

242 P. Świeboda, Opening report during the session Europa, przyszłość, solidarność [Europe, the Future, Solidarity], organised within the framework of the European Forum for New Ideas in Sopot in 2011.