THE MISSING INGREDIENTS
Europe's monetary union was a bridge too far -- meaning not a bridge that should never have been crossed but a bridge that was crossed too soon, before Europe was strategically prepared to defend it. To be sure, carrying on for another decade or two with a system of fixing the margins within which exchange rates could fluctuate -- the so-called Exchange Rate Mechanism -- would have been demanding. But it is hard to disagree with this retrospective judgment by the economic commentator Martin Wolf: "Consider how much better off Europe would have been if the exchange rate mechanism had continued, instead, with wide bands."
We also have to consider other roads not taken. What if, instead of introducing the euro, Europe had deepened its still-far-from-complete single market? What if the whole EU had concentrated on improving its competitiveness, as Germany did so impressively, and not merely paid lip service to that goal in a catalog of good intentions called "the Lisbon agenda"? What if it had used this time to develop a more effective foreign policy? But regret is futile. An old and now politically incorrect English joke has an American couple arriving at a crossroads, deep in the Irish countryside, and asking a tweed-clad farmer the way to Tipperary. "If I were you," says the Irishman, "I wouldn't start from here." Yet here is where we are.
At the end of June this year, the EU held yet another "save the euro" summit -- by a rough count, the 19th of the crisis. Germany said it would allow special European funds to be used to help imperiled Spanish banks, and the eurozone states resolved to create a single banking supervisory structure run by the European Central Bank. Although nobody noticed, the summit communiqué was a reminder of useful things the EU continues to do. For example, European leaders reached agreement on a unitary European patent system, which is expected to lower patenting costs for European companies by as much as 80 percent. They also decided to open accession negotiations with Montenegro, a newly independent state that just 13 years ago was still embroiled in the wars of former Yugoslavia.
As of this writing, no one knows how the euro saga will end. The possibilities include a total, disorderly collapse of the eurozone, a continued muddling through, and, most optimistically, systemic consolidation into a genuine fiscal and political union. Yet even if the eurozone crab-marches toward a political union, it will still have to generate the solidarity among its citizens necessary to underpin it, a degree of European compatriotism that does not yet exist. Another open question is how a more united eurozone core, which would itself contain creditor and debtor nations with very different perspectives, would relate institutionally and politically to EU member states not in the zone, such as the United Kingdom, Sweden, and Poland.
According to one projection by analysts at ING, a total collapse of the eurozone could cause GDP to fall by more than ten percent over two years in all the leading European economies, including Germany. Coming on top of the hardships already endured, that could lead to dangerous political radicalization. (Unlike in the 1930s, such radicalization, to the far right and the far left, has been remarkably limited so far, even in Greece -- a tribute to the resilience of contemporary European democracies.) But even if the eurozone falls apart, there will still be a place called Europe and probably a set of institutions called the European Union. And there will be a new yet also familiar historic challenge for Europeans: to pick themselves up from the ruins and rebuild.
Today's crisis is the greatest test yet of what has been called "the Monnet method" of unification, after Jean Monnet, a founding father of European integration. Monnet proposed moving forward, step by step, with technocratic measures of economic integration, hoping that these would catalyze political unification -- not least through moments of crisis. "Crises are the great unifier!" he once explained. Yet even in the first 40 years of European integration, crises sometimes pulled Europe together and sometimes did not. If they tended more often to promote unity than division, that was in large part thanks to wartime memories and Cold War imperatives. So where are the drivers of integration now? Go back down the list.
A single market of 500 million consumers remains a powerful economic attraction for most European countries. However, it no longer seems as evident as it once did that Europe brings steadily growing prosperity and welfare to all its citizens. Exporting nations, especially Germany, and global service providers, such as the United Kingdom, are increasingly looking to emerging markets, where the growth is.
Unlike during the Cold War, there is no obvious external threat in Europe's front yard. Try as he might, Vladimir Putin just does not match up to Stalin, or even Brezhnev. Could China step into that role? Without stigmatizing China as an enemy, the most compelling new rationale for European unification is indeed the rise of non-Western great powers: China, mainly, but also India, Brazil, and South Africa.
One cannot simply extrapolate from current economic and demographic trends, but in any likely world of 2030, even Germany will be a small to medium-sized power. Then, the only effective way to defend the freedoms and advance the shared interests of all Europeans will be to act together and speak with one voice. Intellectually, this argument is persuasive. But emotionally, to sway a wider public, it does not compare with the visible presence of the Red Army at the heart of Europe.
If Russia no longer fits the bill for an external threat, the United States no longer plays the part of active external supporter. Already in 2001, President George W. Bush could ask, in a private meeting, "Do we want the European Union to succeed?" Part of his administration, at least in his first term, was inclined to answer no. President Barack Obama would definitely answer yes, but until the eurozone crisis threatened the U.S. economy, and hence his reelection prospects, it was hardly a priority. His administration has taken Europe as it has found it and dealt pragmatically with Brussels or with individual countries -- whatever worked. Its geopolitical focus has been on China and Asia more generally, not Russia and Europe.
Conceivably, the United States' attitude could change if China really came to be seen as the new Soviet Union, a global geopolitical threat to the West. Then one option would be for Washington to seek a closer strategic partnership with a more united Europe, including, for example, a transatlantic free-trade area. Old Europe and its cousins across the water would work toward what Édouard Balladur, the former French prime minister, has imagined as a "Western Union." But there is scant evidence of such thinking at the moment. Rather, both the United States and Europe are making their own tense accommodations with China.
Another past driver of integration, eastern European yearnings, still has some traction today. Eastern Europeans have more recent memories than other Europeans do of dictatorship, hardship, and war. Many appreciate the new freedoms they enjoy in the EU; for some, belonging to the same club as western Europeans is the realization of a centuries-old dream. One Polish economist explains why Poland still aspires to join the eurozone thus: "We want to be on board the ship, even if it is sinking!" Of course, they would rather the ship stays afloat. Last fall, in a speech in Berlin, Radoslaw Sikorski, the Polish foreign minister, memorably observed, "I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity."
EUROPEAN GERMANY, GERMAN EUROPE
Germany is the key to Europe's future, as it has been, one way or another, for at least a century. The irony of unintended consequences is especially acute here. If Kohl was the first chancellor of a united Germany since Hitler, François Hollande is the first Socialist president of France since Mitterrand, and it is Mitterrand's legacy he has to wrestle with. Monetary union, the method through which Mitterrand intended to keep united Germany in its proper place -- co-driver with France, but still deferential to it -- has ended up putting Germany at the wheel, with France as an irate husband flapping around in the passenger seat ("Turn left, Angela, turn left!").
At the time of German reunification, German politicians never tired of characterizing their goal in the finely turned words of the writer Thomas Mann: "Not a German Europe but a European Germany." What we see today, however, is a European Germany in a German Europe. This Germany is an exemplary European country: civilized, democratic, humane, law-abiding, and (although Mann might not have rated this one) very good at soccer. But the "Berlin Republic" is also at the center of a German Europe. At least when it comes to political economy, Germany calls the shots. (The same is not true in foreign and defense policy, where France and the United Kingdom are more important.) This is not a role Germany sought; leadership has been thrust upon it.
Moreover, if the need to win support for German reunification drove Kohl to accept European monetary union on a tight timetable, and without the political union he thought essential to sustain it, German reunification has changed the German attitude to the European project. The very same set of closely linked historical developments that has now produced, 20 years on, the need for a special German contribution to Europe has in the meantime reduced both the country's idealistic desire and its instrumental need to offer that contribution.
Were he still chancellor, Kohl would surely insist that the euro must be saved by moving decisively toward a political union. Merkel and her compatriots have reacted very differently, reluctantly doing the minimum needed to prevent collapse. The modest and plain-speaking Merkel is in many ways the personification of the civic, modern European virtues of this new Germany. She is also a brilliant and ruthless domestic political tactician. Whatever her personal convictions, she knows she faces what may be called the four Bs: the Bundestag (the lower house of the national parliament, from which Germany's most pro-European politicians have largely migrated to the European Parliament, another unintended consequence of that well-intended institution), the Bundesverfassungsgericht (the country's constitutional court, deliberately established after 1945 to be a U.S.-style check on a leader's power), the Bundesbank (still very influential in the German debate), and, last but by no means least, the populist tabloid Bild.
Many Germans resent the idea of bailing out Greeks and Spaniards and recall that they were given no say on Kohl's decision to give up the deutsche mark. In a German opinion poll conducted in May 2012, no less than 49 percent of respondents said it had been a mistake to introduce the euro. So far, the benefits they have derived from the euro have not been adequately explained. Yet this European Germany is a free country, open to argument, and some are now making the attempt.
MEMORY, FEAR, AND HOPE
The greatest single driving force of the European project since 1945, personal memories of war, has disappeared. Where individual memory fades, collective memory should step in. Remember Edelman's appeal: "We, who did not perish, leave it up to you to keep the memory of them alive -- forever." Yet most young Europeans' consciousness of their continent's tortured history is shallow. Their formative experiences have been in a Europe of peace, freedom, and prosperity. Even younger eastern Europeans from states such as Estonia, which did not exist on most maps just 22 years ago, have come to take these hard-won achievements for granted. In this sense, the deepest problem of the European project is the problem of success.
Over the last decade, European peoples with historical complexes about being consigned to the periphery of Europe felt themselves to be at last entering the core. Eastern Europeans joined the EU. Southern Europeans thought they were flourishing in the eurozone. In Athens, Lisbon, and Madrid, there was a sense of a leveling up of European societies, of a new, not merely formal equality among nations.
Now that illusion has been shattered. In Greece, the homeless line up at soup kitchens, pensioners commit suicide, the sick cannot get prescription medicines, shops are shuttered, and scavengers pick through dustbins -- conditions almost reminiscent of the 1940s. In Spain, every second person under the age of 25 is unemployed; across the eurozone, the average is nearly one in four. But the pain is unevenly spread. In Germany, youth unemployment is comfortably under ten percent. There is a new dividing line across Europe, not between east and west but between north and south. Now, and probably for years to come, it will be a very different experience to be a young German or a young Spaniard, a young Pole or a young Greek.
Think back to those two May 10 moments in Warsaw. Someone whose formative teenage experience was of the terrors of 1943 would find today's crisis shocking, but still not half as bad as what he remembered -- and he would insist that Europe must never fall back to that. The teenager of 2003 has a different mental lens: this is terrible, she thinks, and not what she was led to expect.
Europeans such as Geremek and Kohl witnessed Europe tear itself apart, and then dedicated themselves to building a better one. The generation of Spain's indignados, young protesters who have rallied across the country since May 2011, grew up in that better Europe, and have now been thrown backward. The trajectory of those who were, say, 15 years old in 1945 went from war to peace, poverty to prosperity, fear to hope. The trajectory of those who were 15 in 2003, especially in the parts of the continent now suffering the most, has arched in the opposite direction: from prosperity to unemployment, convergence of national experiences to divergence, hope to fear.
Could this very discontent provide the psychological basis for a popular campaign to save Europe? The signs are not promising. Popular movements have arisen during the crisis, but they have pointed in other directions. One of the largest was against the Anti-Counterfeiting Trade Agreement, which many young Europeans saw as a threat to their online freedom. The indignados of all countries, Europe's counterparts to the Occupy Wall Street movement, rail against bankers, politicians, and baby boomers, whom they see as having stolen their future. An interview-based survey of activists in these diverse campaigns, coordinated by Mary Kaldor and Sabine Selchow of the London School of Economics, found that the EU is either invisible among them or viewed somewhat negatively.
Fear should not be underestimated as a motivating force in politics. When, in a repeat election this June, the Greeks narrowly voted for parties that were serious about keeping the country in the eurozone, the Swiss cartoonist Patrick Chappatte drew a weary-looking man standing next to a ballot box in the shadow of the Acropolis and exclaiming, "Good news! Fear triumphed over despair." Adapting a famous phrase of U.S. President Franklin Roosevelt, one might almost say that today Europe has nothing to put its hope in but fear itself.
The fear of collapse, the Monnet-like logic of necessity, the power of inertia: these may just keep the show on the road, but they will not create a dynamic, outward-looking European Union that enjoys the active support of its citizens. Without some new driving forces, without a positive mobilization among its elites and peoples, the EU, while probably surviving as an origami palace of treaties and institutions, will gradually decline in efficacy and real significance, like the Holy Roman Empire of yore. Future historians may then identify some time around 2005 as the apogee of the most far-reaching, constructive, and peaceful attempt to unite the continent that history has ever seen.
