Europe’s debt crisis endangers the ability to be distinctive
By Harold Meyerson,
Italy and Greece are not Germany. Until recently, Germany did not want them to be. They were lands of the sunny south, of less work-driven, more pleasure-oriented cultures. To Germans, they smelled of sex (see Thomas Mann) and good food. Consider, as one illustration of Europe’s cultural divide, the argument recently advanced by Italy’s embattled (and perhaps outgoing) prime minister, Silvio Berlusconi, to demonstrate that his nation’s economy is actually in good shape: “Our restaurants are full of people,” he said. I doubt there’s a single German leader, of any political persuasion, who would measure Germany’s economic well-being by restaurant patronage.
Until the crisis of 2008, Europe’s gap between north and south was fine by the north. After all, a lot of those diners in Italy’s restaurants were — and still are — Germans. And if Italy’s more restaurant-centric economy increasingly lagged behind Germany’s uber-efficient industrial economy in growth, productivity and incomes, that was all right, too: Europe could encompass a two-speed economy. Vive, as the French would say, la difference.
Today, however, it’s apparent that the creators of the European Union, and of the monetary union in particular, failed to grasp that their creation would one day turn on them and demand more of a single continental standard for economic performance. It would demand that Italy cease to be Italy, and Greece, Greece. That’s why the turmoil of the past week is bound to persist. The agenda before Europe is to square circles. And those circles include entire peoples who may not want to be squared.
The conceptual flaw (if you prefer, the original sin) of the European Union was that it imposed a superstructure with demands of its own over sovereign democracies. European unification began in 1952 as a largely economic venture — the elimination of tariffs between the coal and steel companies of France, Italy, West Germany and the Benelux nations. The greater goal was to forge common interests between Germany and the rest of Europe, thereby forestalling the kind of conflicts that had plunged Europe into barbarism twice in the preceding half-century.
But as the Coal and Steel Community expanded into a Common Market, and then into a currency union with a patina of supra-national political control, the essence of European integration was altered. The euro created a house divided against itself. Monetarily, the continent was unified, but fiscally, politically, governmentally, economically and culturally, European nations remained separate and sovereign. Each still issued its own bonds, in which a new generation of speculative banks invested and on which they took bets. When bets went bad in 2008, it threatened not just the currency of underperforming European nations but of the overperforming ones as well. It was, after all, the same currency.
What we’re seeing in Italy and Greece are the markets triumphing over national and democratic sovereignty. The governments of those two nations may not have had much in common — Greece has been governed by a democratic socialist and Italy by an autocratic narcissist — but it’s all but impossible to find politicians of any ideology in either country willing to reduce the living standards of their people by the 20 or 25 percent that the markets, in their clamor for austerity, are demanding. That’s why technocrats who’ve worked for Europe’s financial institutions — Lucas Papademos in Greece, Mario Monti in Italy — have had their names thrown into the prime-ministerial hat in their respective nations.
Berlusconi, to be sure, is hardly a poster boy for democracy. He paved his path to Italy’s premiership essentially by buying up his country’s media, by using his wealth to buy power. As the old Time magazine might have put it, no friend of democracy is Mr. Bunga-Bunga. And yet the real pressure on him to leave office isn’t coming from Italian voters fed up with his idiocies, indecencies and the stagnant crony capitalism he has presided over, but from the bond markets, which are making it impossible for Italy to finance its debt.
The market’s demands go beyond Berlusconi, however. In the broadest sense, it’s Italy’s (and Greece’s) economy that the markets are rejecting and insisting on rearranging, whether or not the Italians (and Greeks) want it rearranged.
Capitalism, wrote Karl Marx in 1848, “compels all nations, on pain of extinction, to adopt the bourgeois mode of production” — that is, to surrender their quaint economic niches to the demands of ever-modernizing capitalism. That’s pretty much what’s happening this week to Italy and Greece. The problem here isn’t just that this process may imperil a nation of restaurants, but that it imperils a nation’s right to decide democratically whether it wants to remain a nation of restaurants — however irresponsible or alluring that may seem to its neighbors to the north.