- For four years now, Europe remains in denial that its monetary union’s architecture was never equipped to survive a global financial crisis like that of 2008.
- For four years now, the eurozone has been papering over its deepening fault lines with toxic bailout loans for its insolvent member states and banking systems.
- We created the European Financial Stability Facility (EFSF) to tackle collapsing states, only to distill it into a Collateralised Debt Obligation (CDO)-like structure (so as to preserve the ‘sacrosanct’, but non-viable, principle of ‘perfectly separable public debts’) that rendered it utterly destabilising (thus causing Mr. Draghi to step in with his controversial Outright Monetary Transactions (OMT) programme).
- We created a ‘Banking Union’ in name in order to ensure that in substance our banking systems remain separate and highly dependent on our member states’ quasi-insolvent governments, therefore reinforcing a crisis due to the death embrace between weak banks and fragile states.
Worst of all, Europe fiscally waterboards proud nations like Italy (allowing them to come up for air only briefly, before subjecting them to new self-defeating austerity) while its Central Bank fails to respect its own inflation target (of just below 2%).
In view of the above, no surprise that misanthropy is on the march.
Some argue in favour of an EU-wide federal democracy. Alas, this is not on the cards. Our European Union was designed as a bureaucratic technocracy that is essentially a democracy-free zone. While I hope and pray that Europe does become a fully fledged federal democracy, it is beyond doubt that it cannot do this in order to overcome its current malaise but only if it first overcomes its current malaise and regains the respect of its citizens.
To overcome the euro crisis, so as to give future Europeans a shot at creating a democratic United States of Europe, we need two things:
1. To redeploy sensibly and creatively existing European institutions, without any new Treaties or a fiscal union, so as to address head-on the four inter-related crises that are deconstructing Europe (i.e. banking, public debt, chronic underinvestment and the humanitarian crisis that four years of drift have spawned).
2. To minimise the discretionary, authoritarian power of the Berlin-Frankfurt-Brussels triangle upon our nations’ struggling democracies.
Is it possible to combine these two tasks into a project of Decentralised Europeanisation? I think so. Indeed, together with Stuart Holland and James K. Galbraith we have outlined precisely how this road to recovery, at the economic, political and moral levels, can be attained. We call it a Modest Proposal for Overcoming the Eurozone Crisis (for a version in English, click here. For the French edition, with a Preface from former Prime Minister Michel Rocard, see Modeste proposition pour résoudre la crise de la zone euro, Paris, Les Petits Matins, ISBN 978-2-36383-124-8)