MUNICH - Last month, for a moment, crisis-plagued European nations seemed to have reason to rejoice: Germany’s Constitutional Court had cleared the way for the European Stability Mechanism, the European Central Bank (ECB) announced its plan for potentially unlimited purchases of government bonds in crisis countries, and the EU Commission laid out a new regime of pan-European banking supervision.
Finally!...something positive was happening to halt the continent's cycle of decline.
The high didn’t even last two weeks. Enraged citizens demonstrated in the streets of Spain and Greece; in Frankfurt, top ECB honchos had a very public falling out; and Berlin rewrote the footnotes to the bailout plan. European countries had managed to catapult themselves out of one crisis circuit into another.
And that’s the way things have been going for two-and-a-half years: incredibly tense phases relieved by some short-lived moments of hope when next steps are planned. The whole thing has been about gaining extra time. There’s only one certainty: this crisis is dangerous and it’s going to be long-lasting.
The very life security of millions of citizens is at stake here. For some, it’s about holding on to modest affluence. For others, it’s about sheer survival, savings, political radicalization, extremism -- even life or death.
Germans have a tendency to play all this down – not surprising in a country that mostly feels that the crisis is an abstraction. In Spain, on the other hand, there can be no doubt as to why Prime Minister Mariano Rajoy is fighting the crisis so defensively: overnight, Spain too has become a crisis state.
Its government is trying with all its might to avoid outside intervention, to avoid being put under international supervision. But the massive austerity measures it has imposed on its citizens have yielded one extortionate threat of secession after another. The national debt crisis is threatening the cohesion of the country as Catalan regional leader Artur Mas tries to mask his own deficiencies with a policy of secession that has turned regional elections -- called early -- into a referendum on whether Catalonia should split from Madrid.
Similar dramas are playing out in many other places in Europe right now. The crisis is making players in supposedly safe regions want to withdraw. Catalans feel safe in Catalonia. South Tyrol (Italy) is starting to perceive Rome as a burden. And in Germany, the majority favors throwing the Greeks out of the euro zone. The countries of Europe are not growing together – on the contrary, splitting off into little egotistic cells is the pattern taking hold.
There is no single interpretation for Europe’s existential crisis. In more than two years, it hasn’t managed to get the 17 euro nations to perform a joint analysis of the reasons for the crisis and a unified strategy to fight it – which is why the ECB’s decision this summer to buy up potentially unlimited amounts of government bonds from crisis nations has particular significance.
Something just ain't right
Before this ECB development, crisis countries barely had any other option but to follow German rescue logic: brutal budget cuts, reforms to ensure more competitiveness, and ceding sovereign rights to a greater European authority.
Mario Draghi’s offer deviated from this course. The questions now are: who will get money to rescue its banks? How much bank supervision is needed before the money can flow? Can the ECB only get involved if a crisis country has accepted the harsh austerity measures of the bailout plan? And what happens if the country fails to implement those measures -- does that mean the ECB pulls financing?
All of this is markedly imbalanced. The ECB has turned itself into a political player, and opened what amounts to a new – and busy – market that has slightly wounded Germans ascertaining that their own apparently feared power isn’t going to work all that well anymore. Relationships have shifted. Suddenly creditors are brought up short in front of their own weaknesses, and debtors don’t have quite so much to lose anymore.
Germany’s new loneliness is palpable. The president of its national bank didn’t make any friends through his opposition to Draghi. And after the Helsinki meeting of European finance ministers in late September, the German minister found himself teaming up with Finnish and Dutch counterparts in a move to redefine the terms for recapitalization of problem banks.
On the other side of all this are the crisis nations that are most certainly – and wrongly – imagining that they have the support of a silent France. But its president, François Hollande, has already proved to be a disappointment as far as the crisis goes. Indeed his indifference encourages centrifugal forces, while his own inclination to austerity measures isn’t exactly exemplary.
Can Europe follow Germany, will it turn out the way Germans imagine? It’s not likely: German plans for getting European finances and budgets in order will at least for now not appeal to a more southern-oriented, state-led, and munificent majority. And in a Europe like that, Germany could well start to feel used, and become vulnerable to the arguments of isolationists and nationalists.
No, this crisis-ridden Europe is no fountain of harmony. This Europe is marked by very different mentalities that show how the economic and social policies of the continent are in the process of tearing it apart.
So Europe's fans may rave about the wonderful diversity to be found within the Union – but danger lurks within. Europe could very well end up overwhelming its citizens, so those in the drivers’ seat will have to know not only how to recognize that reality but to avoid it. This crisis has huge power, and could in no time at all destroy everything that it has taken decades to build.
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