Finance and European identity
Members of the Eurozone, led by German Chancellor Angela Merkel and French President Nicholas Sarokzy agreed on 25 March to coordinate financial support to help Greece face its debt problems. The following day the European Council put its weight behind the agreement, solving, at least for the moment, the Greek debt crisis.
The crisis has set off an extraordinary set of political events on the European playing field. In a new way it unexpectedly raised old issues of European identity, of inclusion and exclusion in Europe, this time relative to the Eurozone.
Greece holds national debts of around €290 billion and currently runs a budget deficit of approximately 12,7% GDP, around 4 times higher than the official EU limit. The debt crisis became a European issue not simply out of solidarity for a failing European partner: it weakens not only European financial markets, it weakens the euro itself. When Greek suffers, Europe suffers. A distinct kind of European solidarity, though not precisely the one envisage by the creation of the euro zone established in 1999.
The early days of the crisis had a more technocratic and financial-technical solutions for Greek and European budgetary mechanics dominated the discussion. But throughout the month of March it evolved into a matter of wider European political concern. This was caused to a large degree of by the rise of distinct German voices in the debate, advancing of German Councillor Angela Merkel and Minister of Finance Wolfgang Schäuble.
The German position on any aid package to Greece quickly became the one to reckon with, quickly flavoured with reinvigorated mythological German virtues of discipline, austerity accountability and hard work. A mood of accountability quickly took over the debate ( ‘Help and punishment’ as the Frankfurter Allgemeine Zeitung entitled it.)
Popular German pressure emboldened Merkel to declare in the middle of Parliamentary debate on the German domestic budget, that the option should be constitutionally available as ‘ultima ratio’ to exclude any members of the Eurozone that repeated fail to fulfill the conditions of membership. This was backed up by an FT/Harris poll published on 22 March showed that a third of Germans supported the idea, and that 61% actually opposed the option that Germany should give assistance to Greece. Commission President Borroso quickly went on the record affirming that no Greece would remain in the Eurozone. Wolfgang Schäuble used the occasion to promote the idea of establishing a European Monetary Fund as an alternative to the IMF, and the FAZ returned to the question asking ‘How European is Angela Merkel?’
Who belongs, and who doesn’t? According to which criteria? Who or what authority would be in a position to take the decision of excluding? A European? A German? The IMF? As though Europe were young again, the questions of identity, never really answered, have come creeping back in the debate about Greece and the Eurozone. What does our unity oblige us? At what cost? Who will bear the brunt of the failure of other Member states? Is Greece deserving. Is it adequately contrite?
The history of European construction has always been, among other things, the history of contention about what the European is. The struggle for the discourse of Europe, sometimes explicit, sometimes tacit, was waged long before we even started talking about ‘discourse’.
The struggle for an understanding of the Europe as a financial project, under the aegis of econometrics, was successfully waged by the Delors era of the 1990’s, ending in the creation of the European Economic Union and the Eurozone. (For more see here.)
The narrative of European financial identity is a strong one, with rich historical indexes and evocative scientific underpinnings. Replaying it, retooling it, and revising it in the present form has tested limits, and possibilities, generated new definitions, enriched and strengthened Europe, and–perhaps in the near future–will generate a new institution, a European Monetary Fund.
