POTSDAM-KYIV – The economic and financial crisis in Europe has prompted certain political forces, even ranking officials in Ukraine to declare that the European Union is a fiasco, and to seek another project, jointly with Russia. And this considering that, on the one hand, the existing regime has legislated integration into the EU and initialed the Association Agreement and the Deep and Comprehensive FTA with the EU; and that, on the other hand, the Ukrainian political leadership appears to know little about what is actually happening in Europe – how they are coping with their problems and what Europe will look like after the crisis.
Europe has been actively discussing its problems, as evidenced by the recent M100 Sanssouci Colloquium 2012 “What kind of Europe? Learning from the Crisis” in Potsdam. Regrettably, it was not attended by a single Ukrainian official, not even by the opposition. As it was, M100’s tone was set by Robert Menasse, an Austrian romancier and essayist who opened the colloquium (September 6) by delivering the speech “Countdown to Europe.” (That same day his article under the same heading was carried by the German press.) Former Prime Minister Gordon Bajnai of Hungary spoke about the crisis of crisis management; Dimitrios Droutsas, MEP, ex-foreign minister of Greece, explained the specificities of his country’s withdrawal from the crisis; Solomon Passy, ex-foreign minister, president of the Atlantic Club of Bulgaria, told the colloquium how the drawbacks of democracy could be overcome.
This year the M100 Media Award went to Mario Draghi, president of the ECB who attended the ceremony after a council meeting which had launched bond-buying programs to bring down rates on securities.
Chairman of Ferrari S.p.A. Luca Cordero di Montezemolo, the celebrity’s classmate, had driven his Ferrari all the way from Italy to greet the winner. The main speech during the award ceremony was delivered by the Minister of Finance of Germany, Wolfgang Schaeuble. In his laudation Dr. Paul Achleitner, chairman of the supervisory board, Deutsche Bank, said that conferring the award on the chairman of the ECB would go down in history as an event marking the end of the BC (Before Crisis) epoch and the beginning of the AD (After Deliverance) one.
Most M100 participants were convinced that the crisis would be eventually overcome. Proof of this is the determination of the European governments to do just that, their being prepared to make sacrifices and implement unpopular decisions in their countries. It is also true that views on how to overcome this crisis vary.
In his speech Dr. Menasse pointed out that the EU founding fathers could not have foreseen the problems currently faced by Europe. They believed that there would be a solution to every one. They were right until this crisis broke out, when Europe found itself challenged by nationalistic parties in certain EU parliaments, when the whole European project was jeopardized.
He believes that this nationalism can be overcome by introducing a post-national democracy, by building a supranational Europe because it can no longer rely on 19th-century democracy where the main task was the building of nations.
This is probably the reason behind the lack of understanding between Ukraine and the EU, considering that Ukraine is precisely in the nation-building phase, or in the 19th century by European standards.
Menasse said the EU Council should be disbanded in the first place for it had become a bulwark of nationalism; that during its sittings heads of states and governments try to protect their national interests and then, back home, brag about their firm stand in the face of the bureaucrats in Brussels. He is sure that the future of the European project is in banning the Council’s national representation, and in making Europe a free association of the regions.
Hungary’s ex-Prime Minister Gordon Bajnai agrees that the mounting nationalistic moods – such as isolationism and protectionism in certain countries – are among the reasons behind the crisis. He said that one ought to look in a mirror before accusing anyone of causing the crisis. He also quoted Jean-Claude Juncker, chairman of the Eurogroup, as saying that we know what’s to be done, but we do not know whether we’ll be re-elected if we do it.
Bajnai believes that this is precisely what is preventing politicians from carrying out the reforms necessary for overcoming the crisis. Moreover, it has become apparent that a potential solution to the problem is to be found in Brussels, considering that the national governments cannot come up with one. Therefore, the task of the politicians is to lay the political foundations of a solution to the crisis, bestowing national powers on Brussels, specifically in the fiscal domain, and that politicians must honestly tell their electorates that there is no alternative.
He said that Greece’s withdrawal from the EU – a very likely scenario in the eyes of numerous analysts – would bring its GDP down by 40 percent, and that of Germany by 15-20 percent (although the Deutschmark rate would then be up by 20-40 percent).
He said Europe must find a way to survive the tsunami of globalism, preserve and develop its unique heritage. To do so, one must learn quickly, and quickly adapt to changes. Darwin said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Bajnai said a response to this challenge should be as follows: First, see to it that people suffer the taking of necessary measures, such as structural reforms, as briefly as possible; second, social stability must be maintained, allowing no reverse process in society; third, politicians must be honest to the people. Europe must create institutions capable of operating for a long time and preserving continuity instead of a four-year cycle. This can be achieved by enhancing the European government, allowing it to work on a long-term basis.
Droutsas has no doubt that his country will get out of the debt trap with the EU’s aid, and that it will use the opportunity to rebuild itself for the younger generation. He admitted that Greece has lost its viability because of poor management, clientelism, bribery and lack of rule of law over the past several decades; that all this must be changed. He warned, however, that one shouldn’t expect much from Greeks over a short period of time.
Droutsas believes referendums should be held within the EU, so that people can feel involved in the decision-making process. As it is, people feel distanced from Europe because the decisions are made behind closed doors in Brussels. Such referendums will force the politicians to hold more serious discussions with people.
Passy said the time had come to substitute vote by computation. He referred to the famous scientist, Leibniz, who said that all disputes between people should be replaced by calculations. He believes the EU will continue to expand by making treaties with countries – not by forcing them to join it the way Russia did under Peter I (who said he couldn’t protect his frontiers, so he had to expand) – thus extending to them prosperity, stability, and security. In his opinion, the EU borders are the same as those of Eurovision or UEFA, and they will expand; that Ukraine’s membership and probably that of Morocco will be discussed before long.
Draghi offered the most qualified diagnosis of the crisis in the euro area. Addressing the leading European publishers, media people, and experts, he stressed that the euro is “the world’s second most important currency. It makes up 25 percent of the world’s foreign exchange reserves. Overall 1.5 trillion euros are traded daily on the world’s foreign exchange markets. And it is used daily by the 330 million citizens of the euro area.” He was tasked by the European Commission to work out a “vision” of the euro for the next decade and said that lack of a coordinated monetary, financial, and economic policy was one of the main reasons behind the crisis:
“In the euro area we have a single monetary policy, but our economic and financial policies are only loosely coordinated. This is because the euro area is a union of nation-states with strong national traditions and preferences. While there was sufficient consensus to share a currency, economic and financial policies remained organized largely at the national level.
“The global crisis has revealed the vulnerabilities in this arrangement. Loose coordination of policies neither ensures stability nor does it facilitate effective crisis management. The institutional design of the euro area therefore has to be reviewed to put our economic and monetary union (EMU) on a more secure footing… Member States will have to pool more sovereignty in selected policy areas. This is a clear lesson of the crisis. But we will not need to cede all powers to Brussels. Sovereignty will only be pooled where it is essential to ensure a stable and prosperous monetary union. This will be accompanied by broad democratic participation and legitimation.” Draghi urged the media, publishers and politicians to help “develop a genuine European public space... Most of us in Europe are exposed mainly to our national media in our national languages. These media naturally define our perspective: our sense of the ‘public’ tends to stop at national borders. But this no longer describes reality. What is happening in other Member States matters to all of us. Problems that cross borders require citizens to find consensus around common solutions. Again, the crisis is itself having an effect. For example, newspapers in some countries now take a keen interest in the welfare systems of other countries. Citizens closely follow the elections of ministers they would previously have never heard of. Certainly, there is an unwelcome side to this related to the potential for reviving outdated national stereotypes. But there is also a positive side insofar as it leads citizens in the euro area to develop a sense of belonging together and to care about decisions in other regions. One way to strengthen this trend would be to exchange more media between countries. And here I would like to invite your contribution… There are many reasons to be optimistic that Europe will find this path. The pattern over recent decades has always been to move forward towards a stronger and more united Europe. When we have faced challenges, we have invariably found solutions. Those who have predicted the worst have turned out to be mistaken. What’s more, the solutions we need do not require extreme approaches or impossible choices. They require a structured and achievable path towards completing EMU. This is fully within our reach today. I am confident that one day I can return to this beautiful historical setting sans souci [carefree in French].”
Compared to Draghi’s optimistic presentation, Slovak Prime Minister Robert Fico’s statement that chances for the euro area the way it is are fifty-fifty sounded rather strange. In an interview with Slovak Public Television last Monday he said that some EU member countries “may have to quit the group to make the euro stronger and more stable.” RIA Novosti quotes him as saying: “If the euro area is destroyed, we would like to remain in the group of the strongest [countries] and to preserve the euro.” Hardly a statement that can serve as proof of solidarity, something the EU has been so proud of for so long. Rather, an example of protecting one’s national interests.
