Cracks in the heart of Europe

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nikos_konstandarasMr. Nikos Konstandaras is managing editor and a columnist of Kathimerini, the leading Greek morning daily.  He is also a contributor to The BusinessThinker.com

“No further effort will be demanded of the French, because the government – while taking the fiscal responsibility needed to put the country on the right track – rejects austerity.”  These words do not have the simplicity or the revolutionary resonance of “Liberte, Egalite, Fraternite” but they are striking proof of a rift in Europe’s heart. With its budget statement for 2015, the French government made clear that it has no confidence in the economic policy that has been forced on the eurozone countries and that it is prepared to jeopardize its relationship with Germany. This bond is the nucleus of Europe and, until recently, the driving force of ever stronger union.

Many fronts have opened in Europe in recent years. But when the French-German axis is shaken, then we know that nothing is certain anymore. New alliances will be formed, and new balances and policies will be sought and no one can rule out the danger of the Union falling apart, or devolving into a loose formation of some of its members.

The crisis that broke out first in Greece and then spread to other countries revealed the lack of a serious crisis management mechanism. Everyone understood the need for solidarity, for better coordination in the rescue of countries in difficulty, for stronger union to prevent such crises. Unfortunately, in practice we saw not only solidarity and bailouts, but also the revival of differences and national stereotypes. When the Germans insulted the Greeks and the Greeks were enraged at the Germans, when French President Nicolas Sarkozy abused Greek PM George Papandreou, no one thought that one day it would be Germany and France that would be trading insults. “We are not asking,” Prime Minister Manuel Valls said recently. “France makes its own decisions.” On Wednesday, German Chancellor Angela Merkel stated, without naming France, “It is the responsibility of each state to do their homework to boost their competitiveness.” Italian PM Matteo Renzi backed France, declaring that countries should not be treated like schoolchildren, while parts of the German press ridiculed France the way they periodically mock Greece. 

The French government believes that austerity – at a time of low growth and low inflation – undermines the economy; it also shakes the support of the president and ruling party. Germany, however, not only gains from the current policy but realizes also that a change in course would rely on Germany’s economic backing and would cause a political storm in Germany. Member states are placing their national (and political party) interests above those of the Union. At the same time, the new European Commission that will assume office next month is tasked with the duty of enforcing rules to strengthen the Union. These tensions can be seen in the current ratification process of the Commission in the European Parliament, where members’ nationalities are the focus of much attention.

As everything that we knew about Europe is being questioned, what matters today is not how big a country is but how much it can produce in the way of ideas for the way forward.

 

 

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