In ‘Duck Soup‘ – the 1930s Marx brothers’ film – a powerful rich lady tells the ailing government of Freedonia, she will only bail them out with another loan, if her favourite – Groucho Marx – becomes president: chaos follows.
Europe may or may not escape chaos as the euro crisis unfolds. But when asking what sort of European Union will emerge out of the Duck Soup of the crisis, there are no upbeat scenarios.
Desperate Politics drives all scenarios
The euro crisis has battered the EU’s political dynamics, clout and democratic credentials. The sight of technocrats running the Greek and Italian governments has been criticised as anti-democratic . But Europe’s political failings go beyond this.
Neither Angela Merkel nor Nicolas Sarkozy has any positive European vision for the future. Merkel says the crisis demands political integration, but talks only of budgetary discipline and austerity imposed by Brussels’ bureaucrats. A decade ago – in December 2001 – the EU’s leaders proclaimed at their Laeken Summit that Europe needed a greater presence in the world, and to be more democratic and effective.
But today’s EU has no such vision – nor presence in global affairs. As the Arab Spring moves forward in Tunisia, falters in Egypt, or is under murderous attack in Syria, it is Turkey and the Arab League that make the headlines. The EU is invisible lacking any serious common foreign policy. And as global efforts to tackle climate change stumble, the EU’s efforts at progressive leadership on climate have faltered too.
On economic policy, Europe’s political culture is not producing any serious debate. Where are the leaders or major political parties offering alternative routes to Germany’s austerity medicine, such as a huge green ‘New Deal’ for Europe, or a facing down of markets?
Even ‘normal’ EU politics, where the 27 EU member states all had a say, has disappeared. Before, larger and smaller member states did deals with much horse-trading and backscratching – not always nice to watch but inclusive. Now Franco-German dominance and bad-tempered lecturing reveals a fractious, politically sluggish EU.
Where is the EU going? Three Scenarios
While the euro crisis twists and turns, it is possible to see three main scenarios for Europe.
Scenario One: Sluggish Europe
The eurozone muddles through the crisis, with most of its 17 members including Italy (probably not Greece) still in the euro. The crisis measures lack democratic legitimacy and the eurozone’s internal political dynamics are fairly toxic. This ‘two-speed’ EU is weak at home and internationally – with a divided inner core, plus an outer core divided in itselfnd from the inner group.
Germany insists on treaty change tying euro members into ever greater budgetary stringency. After a double-dip recession in 2012, Europe is mired in low growth, with growing divergences in competitiveness between Germany and the rest, and large swathes of the eurozone suffering high unemployment and crumbling infrastructure.
National and EU politics are increasingly tense. The ten ‘euro-outs’ are disgruntled and obstructionist given their declining political clout while the euro 17 are riven by political rancour especially at Germany’s agenda-setting.
Deeper economic integration of the 17 has little political legitimacy. The 2012 treaty changes are not put to voters, except in Ireland where a ‘no’ vote in early 2013 stirs debate on Ireland leaving the euro.
There is substantial political stasis in the coming years with little agreement on internal or external policies. There are no high profile strategic EU initiatives whether on climate change, world trade, or the Arab Spring though some low level initiatives filter through.
Even in this more ‘optimistic’ scenario, there is a rapid acceleration of the EU’s loss of geopolitical influence.
Scenario Two: Fractured Europe
The eurozone splits as markets attack sovereign debt across the zone. A ‘euro-nord’ emerges with only 6 members: Germany, France, Finland, Luxembourg, Austria and the Netherlands. In chaotic scenes, the other 11 euro members go back to national currencies.
Europe is divided having undermined its own founding vision of peace and prosperity in Europe through integration. With sharp internal political and democratic frictions and divisions, few policies are agreed, and a deeply economically depressed EU has little global presence.
The EU struggles to maintain the single market as the unifying structure of the EU. With 22 currencies, there are big conflicts over exchange rate management. There is no common foreign policy – member states deal separately with Russia, an agreement in principle to open up EU markets to northern Africa (Tunisia, Egypt, Morocco, Libya) founders on different member states’ objections. The Balkans – Serbia, Montenegro, Macedonia and others – decide to suspend their bids to join the EU.
The EU staggers on but it is a moribund organisation.
Scenario Three: Duck Soup
The eurozone breaks up amidst chaotic market and political scenes. The huge political and economic shockwaves scar Europe for decades to come – and impact negatively world-wide.
EU member states turn protectionist, some turn to the far right, politics in many countries is chaotic and unstable. The EU single market fractures and dissolves. After 50 years, the EU falls apart despite some efforts to save it – a British proposal for a simple free trade area finding no takers.
With no EU, there is no European voice in the world. European views on democracy, human rights, geopolitics or economics are multifarious and scorned outside Europe. European countries no longer coordinate at the UN or WTO or at global climate talks. The Asian century has arrived rather earlier than expected and there is one less pole in the multipolar world.
This post was first published on HuffPost UK
Kirsty Hughes is Senior Associate Fellow, Centre for International Studies, University of Oxford