Wednesday, June 13, 2012

Europe: On to a smaller canvas

by Tony Barber

Financial Times

June 13, 2012

Even if France and Germany salvage some unity for the EU, the bloc seems set to gravitate towards a central core.


“Let Europe be whole and free.”

George Bush senior, the former US president, made the above remark in the German city of Mainz in May 1989 as the cold war melted away, permitting democracy and national sovereignty to replace Soviet-imposed communism in central and eastern Europe. Twenty-three years later, as Spain becomes the fourth eurozone economy in two years to request an international financial rescue, the dream of a united Europe exists, much dimmed, next to a nightmare scarcely conceivable in 1989: a continent torn asunder by an ever expanding sovereign debt and banking crisis.

To a certain extent, Mr Bush’s vision of a community of free European nations came true around the turn of the millennium. East merged with west under the twin umbrellas of the EU and Nato. The union’s 27 states – 28 next year with Croatia’s admission – boast pluralistic political systems and, for the majority of citizens, adequately protected civil liberties. However, the financial crisis is testing as never before the resilience of Europe’s welfare state-based democracies and the durability of the post-1945 integration process.

If Europe’s leaders were to fail to pass this test, the potential repercussions for the world, and for Europe’s place in it, would go beyond even the grim forebodings in business and financial circles of devastated banking systems and international economic disorder. “The immediate consequence of the eurozone crisis is the degradation of the reputation of the European Union as a whole on two counts: as a model of competent economic policy management and as a model of enlightened regional integration,” says Michael Emerson of the Brussels-based Centre for European Policy Studies think-tank.

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