POLITYKA   Komentator. Europa-Niemcy-Polska  

Europe's another last chance.

Paweł Świeboda*

The declinist mood visibly subsided in Europe after the summer as more people claim that the glass is half-full rather than half-empty. Voices among the European establishment calling for Greek bloodletting as a way of clearing the air, have given ground to a fragile belief that the eurozone can narrowly make it through the abyss. What has changed?

The key difference is in the German policy towards the crisis. The government in Berlin has done much to be seen as the villain of the peace in recent years. It has missed an opportunity after opportunity to break through the thick cloud of doubt over the future of the single currency. Admittedly, its partners have not been very helpful either. Under the pressure of collapsing dreams of prosperity, Southern European governments have focused on temporary relief rather than long-term action plans aimed at returning to growth. Northern Europeans have struggled to explain the extent of the continent-wide interdependence to their disillusioned publics. The UK has entered a trajectory which may well take it beyond the space of EU politics in a matter of years, if not months. Finally, Poland, a non-euro zone member, has been happy cherishing its small economic miracle on its own.

In the past five years, Chancellor Merkel has steered clear of the "decision-zone", moving only when necessary given the circumstances. She has tried to conceptualise a new "third way" in European politics which she called the Union method. She had been a prisoner of domestic German politics with its voracious tabloids and a skeptical public, entirely convinced that the last 20 years have only been a period of sacrifices. Crisis legitimacy remained binding as every successive move was justified by the proximity of the abyss. Merkel kept on repeating she would stand by the euro but somehow no-one trusted that this was what she really meant.

Germany-watchers agreed that the summer of 2011 was a turning point in the country's European debate. It came nevertheless too little too late as far as the German government's reactiveness was concerned. Conspiracy theories flourished as a result. Some have believed that the German establishment is slowly but inevitably coming to terms with the inevitability of the break-up of the euro, blinded by the success of the country's export industry. Historical determinism was meant to suggest that the political project of the single European currency is destined to failure and nothing can be done about it. After all, the Germans had never loved the single currency and always suspected others of getting a free ride at their expense. Other conspiratorial theorists believed there is more to the German strategy than meets the eye. In their account, Chancellor Merkel had to demonstrate unscrupulous rigour towards Germany's European partners and refuse supposedly unsubstantiated claims t o German credits and guarantees. Had she displayed a pro-European naivety, the electorate would have sunk her already. This was all about Merkel pre-summer 2012.

As the new season starts, Europe should now face to the reality of a new German leadership. Chancellor Merkel started banking on a take-it-or-leave it federal blueprint. The Foreign Minister Guido Westerwelle, who launched a reflection on the future of Europe among a number of counterparts from around the EU, should get credit for pushing her in that direction. Last month Merkel starred in a video clip for the "I want Europe" campaign run by 11 German foundations. The campaign has run for two years but Merkel only joined in with her appeal to the Germans this summer. She also went to significant length to appease the new Greek Prime Minister Antonis Samaras during his recent visit to Berlin. Finally, she made clear she favours a new treaty which would cast in stone closer European integration. Her EU advisor told Der Spiegel this means calling a European Convention. In parallel, the German ECB board member Jörg Asmussen openly backed Mario Draghi's plan for massive purchases of the troubled countries' bonds in exchange for tough fiscal conditinality. Chancellor Merkel is clearly starting to position herself for next year's Bundestag elections, due in September 2013. With work on a new treaty in the pipeline, she can safely try to convince her public she is the only one to take Germany through the process unscathed.

This is a roller-coaster strategy for Europe but one it cannot avoid. Both eurozone and non-eurozone members have until December to do some hard thinking about the consequences. The early shots will come with the European Commission's proposal on banking supervision on 12 September. Most of the discussion focuses on the scope of the future ECB role which can either extend to systemically-important banks, as Germany wants, or cover all the banks in the EU, as the European Commission is likely to propose. The crux of the matter is that the proposal is meant to be made on the basis of Article 127 (6) of the Treaty on Functioning of the European Union which involves the ECB and requires unanimity among the twenty seven members. The June European Council decided that setting up of the banking supervision role is a prerequisite of the European Stability Mechanism lending directly to the banks, which the Spaniards and the Italians desperately want to happen as soon as possible. This means that it will be all eyes on... London very soon. If the UK decides to block the supervision proposal, fearing negative fallout for the City, a banking treaty outside of the EU legal framework will follow. This will make it unlikely for a go-ahead from the entire EU-27 for a wholistic treaty reform at the December European Council. A core Europe will then finally take its shape with Merkel as its chief architect.

As the final round in the eurozone saga starts, the ins will have to decide what type of intrusive budgetary controls they can accept in the future, as the way is paved towards towards a genuine fiscal union. Britain is likely to be at best a bystander in that process. It will still need to decide whether to enable existing EU institutions to cater for the needs of a revamped eurozone. This is an outcome that Poland will much prefer as it can then legitimately ask for an observer status as a "pre-in" country which is still planning to join the eurozone in the not-too-distant future. An autumn of decisions awaits.

*Paweł Świeboda is President of demosEUROPA – Centre for European Strategy

Źrdódło: http://www.demoseuropa.eu/

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