Vox
November 26, 2011
When US President Barack Obama met German Chancellor Angela Merkel earlier this month, his advice was reportedly, “I guess you guys have to be creative here”. This column wholeheartedly agrees – and lays out where that creativity is sorely needed.
“I guess you guys have to be creative here”, US President Barack Obama is reported to have advised German Chancellor Angela Merkel at the Cannes Summit on 4 November. This is an apt tagline for the current moment in the Eurozone crisis. The European Union needs to radically change its ways, or it may not survive.
Beyond the headlines about Greece and Italy, the central problem is a crisis of decision-making at the European level. At no point since early 2010 has the contagion ever been seriously contained. This is an astounding policy failure, almost universally seen as such from outside Europe. Blaming the individuals would be unfair. Europe’s leaders may not be heroes but, from an historic or international perspective, most are reasonably competent, dedicated, and honest. The problem lies not in them, but in the institutions.
At the core of Europe’s predicament is an obvious mismatch: the key decision-makers at the European level are leaders whose accountability derives exclusively from national electorates. Most have no mandate to work for the common European good. The European Commission is mostly powerless, except in specific areas of autonomy such as trade and competition policy. The ECB is a truly federal institution but its scope of action is limited, and rightly so. In the areas of fiscal and banking policy that have been made crucial by monetary union, there is no European executive branch.
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