June 30, 2011
Time for Unity in Europe
By Carles Castello-Catchot
In a recent Atlantic Council forum on “The Economic Agendas of Europe’s Newly Elected Governments,” Antonio López-Istúriz, Spanish MEP and Secretary General of the European People’s Party (EPP) outlined a “state of affairs” in which a bankrupt Greece verges on leaving the Eurozone, member-state politicians squabble for power and dismiss the idea that Brussels can generate real answers to the actual crisis, and populist movements become a more appealing political alternative to many voters in the continent. Certainly, the Union has seen better times, but if Europe is to find a comprehensive solution to its current economic and political turmoil, the center-right will need to turn its official Euro-pessimistic discourse into a more constructive one.
Discussions about the “Schäuble plan,” which would suppose a de facto recognition of Greece’s bankruptcy, as well as the speculations about the Hellenic republic leaving the Eurozone if no consensus is reached in the days to come, present a stark choice for the EMU at a time when tough reforms are underway in several member states and economic growth, while timid, has started to consolidate. Solidarity lies at the core of the Union’s nature, and suggesting a hypothetical breakup of the monetary union would have a devastating multiplier effect.
It is now, in these harsh times, when the European project’s capacity to support its weakest members and come up with comprehensive solutions will be tested. Letting Greece fall, financial effects aside, would go against more than sixty years of cooperation among European states to build a common, better future. From that perspective, one would wish that the EPP helped deactivate the narrative on Greece’s hypothetical default and send a message of confidence to the markets and international institutions. It has not been the case yet.
A strong Union needs solid foundations to be built upon: as member States discuss their reform packages, all parties involved in the negotiations should realize that only broad, long-term national compromises on financial, economic, and social reforms will plant the seeds for future political stability and economic growth. Unfortunately, domestic politics and electoral cycles have become the main driving factors for disunity.
In Portugal, for example, the PSD (Social Democratic Party) refused to support Socialist Prime Minister Jose Socrates’ reform package and forced his resignation, convinced, as it happened, that it would win the elections that followed. The strategy of using the financial crisis as a tool to reach power is also being used in Spain and Greece. Despite European institutions praising the efforts of the current socialist governments in carrying out tough reforms, the conservative opposition parties of both countries (Rajoy’s People Party in Spain and Samara’s New Democracy party in Greece) are also waiting for their respective governments to fall as a consequence of the crisis.
With the parties that conform the EPP currently holding a broad majority of seats at the European parliament and being in charge of 17 of the 27 governments of the EU, an important share of responsibility in reaching a solution to the current crisis rests on their shoulders. This should also be the case in those countries where the center-right is not in power. It may be true that, as López-Istúriz put it, Prime Ministers Papandreou in Greece and Zapatero in Spain will be “running out of business” pretty soon, but that should not serve as an excuse for the People Party and New Democracy to sit on the sidelines as the political process deteriorates—or worse, to block the consensus necessary to enact economic reforms. Given the narrow margin of policy options that current governments have to operate with, it would be encouraging to see the left and right leaving aside electoral calculus in order to reach national consensus on structural issues. No matter who is in power, broad political and societal support of the reforms will be critically important for restoring confidence in the future of the economy.
One of the most worrisome parts of the current euro-pessimistic discourse, though, presents populism as the only future alternative to the center-right. Although there has been a rise of populist movements in recent elections all across the continent, dismissing the social-democratic parties as the real alternative to the conservatives makes little sense. Populist movements have been unable to structure themselves as national platforms with a solid and viable discourse for broad constituencies, mainly feeding on harsh local realities. In times of global distress their anti-European rhetoric, extreme positions on national security and immigration, and isolationist view of the global economy, may appeal to some within the most vulnerable segments of the population, but so far there is no data to support the idea that these opportunistic movements will be surpassing the more broadly rooted and ideologically coherent social-democratic parties as a real alternative to the conservatives.
So far, the three main flagships of the EPP, French President Nicolas Sarkozy, German Chancellor Angela Merkel, and Italian Prime Minister Silvio Berlusconi, have all suffered electoral losses at the regional and local level at the hands of their socialist counterparts. Political affiliation aside, whoever has been in government from 2008 on is being blamed for the economic and social effects of it. In that sense, the social-democrats are as much alive as the conservatives as a viable political force in the continent in the near future.
As López-Istúriz said, for good or bad we still live in the Europe of the States. That being the case, strong bipartisan compromise at a national level will be required to reach structural solutions to a financial and economic crisis that has hit all countries of the Eurozone with independence of their political color. In politics, narratives matter as much as facts. If the EU is meant to become a real solution maker, its representatives need to start reshaping the current pessimistic discourse and transform it in a tool for optimism and confidence. I hope that the EPP lives up to the challenge, Europe needs it.
Carles Castello-Catchot is assistant director of the Atlantic Council's Strategic Foresight Project.