JULY 13, 2012
THE PUBLIC DISCUSSION of Europe’s economic crisis has carried a curious air of repression: When commentators have worried about worst-case scenarios—the scenarios that harken back to the dark moments in the Continent’s history—they have generally been dismissed as alarmist.
But there are good reasons to treat these dire warnings with the gravest seriousness—to place them within the realm of plausibility. One of these reasons can be found within the file cabinets of the U.S. government. In 2004, the U.S. National Intelligence Council, the government’s premier agency for strategic intelligence analysis, published a report arguing that the European Union might not survive to see the year 2020. The report worried about restrictive labor laws and aging populations, not debt and the unraveling of the currency union. (The report also saw the main danger as Germany’s economic weakness, which makes for curious reading eight years later.) Still, it is bracing to consider that the U.S. government has worried about the worst-case scenario with the same intensity as the so-called alarmists.
With Europe in such a precarious condition, it should be clear that the current economic and political arrangements can’t last much longer. That reality ought to focus our attention on the question of what arrangements will take their place. We would do well to recognize that Europe has a range of possible futures in store, some much more disastrous than others.
WILL THE EUROPEAN UNION unravel? One reason to think it won’t is that dissolving the currency union would impose great expense on all involved. According to the Swiss bank UBS, the immediate cost of leaving the euro zone would be in the vicinity of $14,000 per person for weak countries. Whatever new currency is introduced would be precipitously devalued.
But such exorbitant cost is increasingly an insufficient deterrent. EU countries are fully aware of Argentina’s experience with default in 2001. The economic and social consequences were extremely painful—high unemployment, capital flight, the impoverishment of the middle class. But the country’s newly devalued currency soon spurred a recovery. European leaders may decide to exit the monetary union on the basis of similar calculations: that the introduction of a new currency would inflict a period of hardship on their countries for two or three years, after which they would again become competitive on international markets.
Moreover, the economic costs of exiting the European Union are running up against other political imperatives. The economic contagion has metastasized to a point where the only remaining solutions involve the sacrifice of significant national sovereignty. It’s now taken for granted among many European policymakers that countries will soon have to surrender control over their budgets (and, thus, domestic policy more generally) to a central European government.
They are much too sanguine, however, in assuming that the European public would ever agree to such a move. Postwar Europe has often been referred to as post-nationalist, but that designation is only partly correct. The carnage of the twentieth century imparted lessons that mostly had to do with the horrors of military conflict. (It’s indeed inconceivable that war would now break out between two European countries, except perhaps in the Balkans.) But the loyalty of Europeans still resides foremost with the countries of their birth. The idea of the nation-state is deeply rooted throughout the Continent; the concept of a United States of Europe is authentic only to the least-rooted of elites.
For many Europeans, then, the introduction of the euro—and the relinquishing of existing currencies—was never thought of as a hopeful measure of economic and political progress, but rather as a rude affront to national pride. So if Brussels demands that national capitals relinquish significant power, national publics can be counted on to agitate for an exit from the currency zone. We shouldn’t be surprised when national politicians feel obliged to comply. There may be a “European core” that decides to stay with the euro currency, but it’s possible that the majority would choose to exit.
IN THOSE COUNTRIES that did exit, domestic politics would quickly focus on finding an adequate replacement for Europe’s monetary union. But the search for a new economic order would soon engage more fundamental political questions.
National politicians would be quick to label the failure of the common currency as a failure of the belief in unfettered markets (and they would not be entirely wrong). And as a consequence, they would also work to shore up the reputation of state institutions, insisting they play a larger role in the political imagination—as a dignified guarantor of the common good, but also as a steadfast protector from outside threats.
Some European politicians, drawing on the populist appeal of nostalgia, are likely to extol the Continent’s former political divisions. Certainly, the patchwork of homelands that was nineteenth-century Europe offers ample opportunity to indulge in fantasy. (The sentimental artwork, especially painting from that period, provides plenty of fodder.) So we can expect populists across Europe to denigrate the cosmopolitan ethic of the European Union and romanticize instead the local face-to-face interactions of a bygone era.
Politicians will also use such nostalgia to insulate themselves from the economic hardship that arrives as a consequence of exiting the euro zone. They will praise the days before the globalized economy, when it may not have been as easy to acquire great wealth, but at least life was simpler, more familiar, and not as hectic.
But some inventive demagogues may combine their appeals to nostalgia with calls for radicalism. Indeed, one underappreciated tragedy is that Europe’s political future will depend greatly on the political will of those most traumatized by the current crisis: Europe’s youth. The political and social implications of Europe’s mass youth unemployment have not earned nearly the attention they deserve.
Traditionally, youth has been a factor of hope in politics. As the philosopher Martin Buber put it in 1918, “Youth is the eternal chance mankind possesses.” Older generations generally focus on the difficulties, dangers, and risks of political change. But young people have always had the passion, idealism, and enthusiasm to struggle for political progress. It is no coincidence that, when the French Revolution broke out, the most fiery of revolutionaries, Saint-Just, was just 22. Georges-Jaques Danton, meanwhile, was nearly 30—and therefore considered an old man.
However, the second part of Buber’s statement about youth is usually forgotten: “What a pity that this chance is usually wasted.” If youth is the season of hope, it is also the age of credulity and fanaticism; the radicalism on behalf of which youth has served as a vanguard has not always been so admirable.
Consider Italy’s fascist movement. Benito Mussolini was not yet 40 at the time of his march on Rome, and those surrounding him were even younger—Achille Starace, the future secretary of the party, was 33; Dino Grandi, the future minister of justice, was 27. Galeazzo Ciano, the future foreign minister, claimed to have participated at the age of 19. (The anthem of the fascists was “Giovinezza primavera di bellezza”: “Youth, Spring of Beauty.”)
The same was true with the Nazi movement. In 1933, Adolf Hitler was in his forties, but his closest followers were all very young: Joseph Goebbels was 36; Heinrich Himmler, head of the terror machine, was 33; his deputy, Reinhard Heydrich, 29; and Adolf Eichmann, the engineer of the Holocaust, a mere 27. And there is no doubting that Germany’s massive youth unemployment problem in the early ’30s—a total of seven million Germans were out of work in 1932—contributed to their collective rise.
Communist parties throughout Europe similarly exploited youth unemployment. In early Soviet days, they sang: “We are the young guard of workers and peasants.” The leading figures in the Russian Revolution (with the exception of Vladimir Lenin) were all in their thirties or younger.
So far, the political radicalization of youth in Europe has been sporadic. But this is unlikely to remain the case. Youth unemployment in much of Europe is running at astronomical levels, reaching 50 percent in Spain and Greece. The official figures do not even convey the full picture, as many young people have been forced into part-time or unskilled work, or have given up looking for a job entirely. And already, in the past year, there have been riots in London and mass action by the indignados in Spain.
Will protest make a turn to the left or the right? The most widely noted manifestation so far has been the phenomenal success in Germany—and a few other countries such as Sweden—of a new political party named the Pirates. But that party has eschewed commenting on broad societal issues like the EU crisis, instead focusing on copyright and intellectual property. (At least two leading German Pirates were revealed to have had past affiliations with extreme rightwing groups.)
But a latent potential for extremism is very much present in Europe. And given the stubbornness of the youth unemployment crisis, it’s very likely that this potential will be absorbed (and exploited) by new groups and leaders preaching an illiberal political gospel. Parliamentary democracy, they will say, does not work anymore; the system should be replaced by something new. These movements, whatever form they take, will be unpleasant.
EVENTUALLY, THESE currents of nostalgia and radicalism may push European leaders to look beyond the monetary union and to undo the other institutions comprising the European Union: the single market, the European Court of Justice, the coordination of economic and foreign policy. When those functions are unraveled, the European Union would, in essence, cease to be.
Such a precipitous descent into rank populism would be horrid. It would unravel generations of hard-won diplomatic progress, as European elites would have new incentive to indulge the chauvinism of their people. Relations between European countries would harden and become bitter.
What will eventually bring this to a halt will be Europeans’ instinct for self-preservation. Indeed, this faint pulse of enlightened self-interest will also motivate their tentative rediscovery of the virtues of continental unity.
As eager as Europeans might be to abandon cosmopolitan pretensions and international exertions of soft power, they will definitely want to maintain their standards of living. And they would soon discover that this is a goal incompatible with the old system of passport checks and customs duties. So they will remember the reason they sought economic integration in the first place—small countries need many trading partners to maintain economic growth, and the more tightly integrated they are, the better. The isolated, economically depressed, independent nations of post-EU Europe will come to miss the economic coordination that they once had—not least, because they will have replaced it with the anxiety of persistent low-level tension with their neighbors.
Of course, having suffered the turbulence of disbanding the European Union, there will initially be resistance on the Continent to starting the experiment anew. But after a number of years, maybe even decades, when the pleasures of unimpeded sovereignty have been exhausted, and the lessons of its limits have been learned, there will be another attempt to pursue European integration.
It’s possible that, having learned from the mistakes of the past, Europeans will reach farther back in seeking a model for their future attempts at integration. Some might evoke the model of the Hanseatic League, which existed from the thirteenth to the seventeenth century. (The name survives in some unexpected ways; the car registration tag of the city of Hamburg reads “HH” to this day—Hansestadt Hamburg.) The Hanseatic League had a considerable reach, from Scotland to Novgorod in Russia, but its purpose was mainly to facilitate trade, though it also had its own legal system and provided some mutual help and security. If a “core Europe” does stay intact after the dissolution of the currency, it’s likely to be in such a stripped-down capacity. And it would be precisely such a system that chastened former EU countries could be tempted to join.
IT SEEMS SAFE TO say, however, that Europe’s future advocates of unity will be struggling against compatriots radicalized by the experience of prolonged recession. This could mean the Continent will experience a generational conflict of unprecedented ferocity. It would also mean the end of a Europe that could pursue unity on the basis of a common, and implicitly understood, commitment to democracy.
That is why it is not enough for European elites to simply expend energy defending Europe’s current institutions. Europe will only be secure in its unity if it can achieve a measure of solidarity. This was clear even in the darkest depths of the ’30s, when the aristocratic Austrian politician and publicist Richard Nikolaus von Coudenhove-Kalergi intuited that the rise of fascism demanded an even louder propagation of the pan-European cause.
In the same way, the greatest unanswered question confronting the Continent today is not about the mechanism of a bailout, nor the sustainability of sovereign debt, but the Continent’s great solidarity gap. Those ties that currently bind Europeans to Europe are composed not of genuine sentiment, but rational argument. Even the most fervent supporters of unity are Vernunfteuropaer, to borrow a term coined in the days of the Weimar Republic. They endorse Europe but do not particularly love it and feel only a limited duty to support it. This is a pale imitation of the spirit that once moved a Giuseppe Mazzini or a Victor Hugo to mount the barricades on behalf of a united Europe.
The challenge in the years ahead will be for influential Europeans to take this cause and make it their own. The German philosopher Jürgen Habermas has tried for years to outline a concept of European nationalism, but he has been a lonely voice. Such appeals would resonate more widely in a general atmosphere of dire necessity. Historical experience shows that radical change usually occurs as the result of a deep crisis. This fact was well-known to Jean Monnet, the architect of the European Union. As he was famous for saying: Crises are the great federators.
In that sense, it is unfortunate that there has still been no palpable feeling of crisis this summer in most EU countries (other than the few most severely affected by the recession). Europeans have been content to devote more attention to the queen’s Jubilee, the European soccer championship, and the run-up to the Olympic Games than to the news bulletins about Continental summits and bailout meetings. We should hope that these distractions do not prove fateful.
What was said at one stage about Italy (“We have created Italy, let us now create Italians”) has always been true of Europe. The current European Union is now on the precipice of falling apart because Europe’s leaders refused to recognize the importance of the task. But there is nothing preventing Europeans from trying once again. Sometimes the energy to overcome great collective difficulties can only be forged in great collective failure.
Walter Laqueur is a Distinguished Scholar at the Center for Strategic and International Studies in Washington. His most recent book is Harvest of a Decade.
This article appeared in the August 2, 2012 issue of the magazine.