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Europe needs a peaceful revolution

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|Opinion| The Eu­ro­pean Elec­tions are just two months away. Eu­rope is still in cri­sis and peo­ple are get­ting all the more ag­i­tated, ex­as­per­ated, and dis­trust­ful. Why do we need to vote for an EU which so has so ev­i­dently failed not only to fore­see and pre­pare for the biggest cri­sis since the Great De­pres­sion, but also to ad­e­quately man­age and con­front it?

“Politi­cians have a ten­dency to leave all dif­fi­cult de­ci­sions for later,” says Pro­fes­sor of Eu­ro­pean In­te­gra­tion at the Uni­ver­sity of Athens and Pres­i­dent of the Hel­lenic Foun­da­tion for Eu­ro­pean and For­eign Pol­icy (ELIAMEP) Loukas Tsoukalis.

Very ugly Russ­ian dolls

He de­scribes the eco­nomic cri­sis as a se­ries of very ugly Russ­ian dolls – the big one is the in­ter­na­tional bank­ing bub­ble which burst in 2008 due to mar­ket fail­ure; then comes the EU cri­sis which demon­strated the dan­gers of hav­ing a com­mon cur­rency with­out the rel­e­vant in­sti­tu­tions to sup­port it; and then come the na­tional fis­cal prob­lems faced by mem­ber states, ex­ac­er­bated by the year-long bor­row­ing from banks. Now the party is over, says Tsoukalis, but who will pay the bill? These na­tional crises have now be­come an in­sep­a­ra­ble part of a sys­temic cri­sis of the Euro.

There have been mis­takes and er­rors both on the na­tional and the Eu­ro­pean front. The EU has lost an en­tire decade due to the bank­ing bub­ble, and, as Tsoukalis re­it­er­ates, we would be lucky to have re­turned to 2007 growth and GDP lev­els by 2016.

The EU un­der­es­ti­mated the con­se­quences of fis­cal ad­just­ment and the di­vi­sions it would cause be­tween mem­ber states. And the fact that it would drag on for such pro­longed pe­ri­ods.

on the verge of a ner­vous break­down

Greece alone has lost one third of its liv­ing stan­dards in the three years it has been sub­jected to tough aus­ter­ity mea­sures (2009-2012) and it now ranks among the worst EU per­form­ers in salary im­bal­ances, sat­is­fac­tion with life and sui­cide rates. Un­em­ploy­ment rates are still un­ac­cept­ably high and this is a se­vere ob­sta­cle to growth and de­vel­op­ment. No mat­ter how good the sit­u­a­tion of mem­ber states pre-cri­sis, pretty much the whole of the Eu­ro­zone is now suf­fer­ing the con­se­quences of mis­man­age­ment, ir­re­spon­si­bil­ity, and in­ef­fi­ciency.

So­ci­eties are on the verge of a ner­vous break­down. As we con­tinue to get caught in a vi­cious cycle of aus­ter­ity and re­ces­sion, with salaries being re­duced but taxes in­creased, the risk of so­cial ex­plo­sion rises. Yet, the ma­jor­ity of peo­ple in Eu­rope still want the Euro be­cause they are afraid that things may be­come even worse with­out it. It is what Tsoukalis de­scribes as a “bal­ance of ter­ror”.

Many think that cit­i­zens have paid a high price, but we are now ex­it­ing the cri­sis. But are we? Un­em­ploy­ment is still ris­ing, the debt is still un­ac­cept­ably high, and the EU is mov­ing ahead still un­pre­pared.

a new grand bar­gain

Eu­rope needs a peace­ful rev­o­lu­tion, says Tsoukalis. In order for na­tions and the EU as a whole to exit the cri­sis, more changes are needed both on the do­mes­tic front and at an in­sti­tu­tional level. The EU needs “a new grand bar­gain” to change its ap­proach to man­ag­ing the cri­sis and “to es­cape the zero-sum men­tal­ity that has pre­vailed be­tween cred­i­tors and debtors, be­tween North and South”.

Tsoukalis ar­gues that the great­est chal­lenge the EU now faces is whether it can con­tinue to re­cover, with­out sweep­ing its prob­lems under the rug and en­gage in ac­tive and sub­stan­tial growth by putting in place the nec­es­sary fa­vor­able en­vi­ron­ment for this to hap­pen. The cri­sis only served as a sound re­minder that the EU has no mech­a­nism to deal with it. The Euro will not sur­vive with­out the eco­nomic and po­lit­i­cal basis on which to rest, Tsoukalis warns, and adds that a bank­ing union and an en­hanced co­op­er­a­tion through an Eco­nomic and Mon­e­tary Union is vital if we are to save the EU from de­clin­ing.

For now, Eu­rope’s growth prospects are weak. But painful de­ci­sions need to be taken now, for the more we wait the deeper the wound gets in­fected and the harder it will be to cure.

"a bold act, a con­struc­tive act"

There is a lack of trust in Eu­rope. Peo­ple have lost their faith in the po­lit­i­cal sys­tem, in the EU, in them­selves. This has paved the way for the re­turn to na­tion­al­ism, where each state pri­mar­ily looks to serve its own in­ter­ests first, some­thing that is re­flected in so­ci­eties them­selves, with peo­ple be­com­ing more ego-cen­tric and less con­cerned about the com­mon good.

But this is not the time to fight solo. It would be fool­ish to do so. This is the time to re­al­ize the strength of a united al­liance of mem­ber states, one that can am­plify its pres­tige, sta­tus and power in a glob­al­ized world.

The per­pet­u­at­ing cri­sis has livened up the EU de­bate on what needs to be done, on what fu­ture we want for Eu­rope. But it is no longer a ques­tion of more or less Eu­rope. The an­swer is clear – a bet­ter Eu­rope. And in order to do that we need to fi­nally ad­dress the ques­tion of how this can be brought about. The EU elec­tions offer the cit­i­zens a chance to make their voices heard on this mat­ter and to re­al­ize the wise words of Robert Schu­mann that “it is no longer a ques­tion of vain words but of a bold act, a con­struc­tive act”.