The European Crisis

Dominic Lieven

Until now the debate on Europe's crisis has largely concentrated on how to resolve problems of European sovereign debt before they undermine the Euro and plunge the world into a double-dip recession which could turn into a full-scale depression to match the 1930s. But to understand the current crisis and to grasp its longer-term implications requires some sense of why the European Union was created and how it fits into broader patterns of European and global history.

In the wake of two wars that had devastated Europe and destroyed its claims to global leadership post-1945 European elites agreed that there must be an end to the conflicts between rival states and nationalisms. The foundations of a European community were initially to be economic since this would provide a strong common interest in cooperation. Though European integration was to some extent driven by technocrats it is also true that the memory of mass fascist parties and the reality of mass communist ones did not encourage Europe's elites to place unlimited faith in democracy. Actually, however, their project of building a European Union enjoyed wide legitimacy among the West European electorates in its first decades. That owed much to the rapid expansion of the European economy in these years. Memories of war and of nationalism's crimes also counted, above all in Germany. Since the 1870s Germany has been continental Europe's only potential hegemon - apart from Russia. In the years after 1945 as today, Germany's stance was therefore crucial.

In a sense the European project was imperial. Since the mid-nineteenth century it was generally accepted among experts on international relations that only countries of continental scale and resources would be true great powers in the future. In other words, only such countries would have a significant say in deciding the questions which would determine the future of mankind. Above all, this was because technology was now making it possible to penetrate, settle and exploit continental heartlands. This was the geopolitical logic underpinning the age of imperialism, in other words the four decades before 1914. For Europeans this geopolitical logic was dispiriting. The USA, Russia and China were already continental-scale states but Europe's whole history since the fall of the Roman Empire seemed to show how immensely difficult it would be to build an empire in Europe. The German attempt to do so in two world wars confirmed this truth at terrible cost. The construction of the EU was an attempt to have empire's benefits without its costs. By voluntarily pooling the resources of their continent, Europeans would not become irrelevant and powerless in global affairs. Many of the EU's creators hoped that in time and almost unobserved the European confederation they had built would evolve into a federal union.

The EU was never intended to be an empire in the full sense of the word. Empires are based on conquest, whereas the EU's growth depended on the tacit consent and the indifference of Europe's electorates. Nevertheless the European Union soon faced the key dilemma of all modern empire. On the one hand, international power and relevance demanded continental scale and resources. On the other, popular sovereignty and the nation (usually defined in ethnic terms) are the key to political legitimacy in the modern age. How to make government seem legitimate in the eyes of a usually multi-ethnic and multi-cultural population spread out across a continent is a challenge which faces all great powers - in various forms this is a key challenge for rulers in Washington, Delhi and Beijing.

But the challenge is most acute for Europe's elites. Europe is after all where modern nationalism started. For European electorates the two world wars are now a distant memory. Present-day concerns inevitably push such memory aside. Liberal globalisation threatens the living standards and security of ever-wider sections of European society. A sense that individuals and communities have lost control of their own destinies worsens the feeling of insecurity. Mass immigration of culturally alien non-Europeans is an easy focus for growing anger and fear. The EU is not to blame for most of this. In fact it might offer the least unacceptable answers to some of these challenges. But for much of the European electorate it currently seems more an aspect of globalisation than an antidote to it. Above all - unlike the Americans, Chinese and Indians - Europe's rulers do not possess a state through which to manage the dilemmas of empire. In normal circumstances this might not matter but when crisis comes leadership is crucial and can only be provided by some version of coherent central government.

The crisis is now upon us and it seems clear that the EU must either move forwards (no doubt shedding some of its members) or back. It must create something like a federal state or face the unravelling of both the euro and the European project. In the short run it may well do neither. Markets move much faster than politics, especially the politics of a confederation of democracies. If the Euro bounced upwards by 2.2% against the dollar after the EU summit of 26 October the cost of Italian bonds remained stubbornly high at 5.9%. As the markets know, even if European leaders agree deals enforcing them at national level remains problematic. So Europe's crisis may well still plunge the world into a second recession, against whose dangers not even China, let alone the USA, has the spare resources which were used to stave off disaster in 2008-9.

Which way Europe will move in the longer term is hard to predict but perhaps the history of empire and of globalisation offers a clue. Today we live in the second phase of liberal globalisation with the American branch of the English-speaking peoples in the driving seat. They took over leadership from the British after the first phase of liberal globalisation was undermined by the First World War and destroyed by the Great Depression of the 1930s. Currently we face the strong possibility of economic depression at a time when the global balance of power is shifting rapidly. To some extent China now is the equivalent of Germany before 1914. Both China now and Germany then intended not to destroy the existing global order but rather to join the small club of its rulers. But power infuses every element of international relations so a shift in the global balance is bound to be a source of great insecurity and tension now, as it was in the decades before the First World War. If the global cake shrinks amidst economic crisis, this tension will surely grow. Over the horizon are coming possible conflicts over shrinking resources (above all water) and - if only half the Green movement's claims are true- big ecological problems which will have serious political consequences .

Maybe all this will push us back towards the world of empire. One of empire's charms was that it provided security in a dangerous world. The more uncertain and dangerous the external challenges, the more legitimate empire seemed. In the good times since 1945, being powerless and irrelevant annoyed European elites but did not much concern Europe's electorates. Amidst global crisis, however, the powerless are likely to suffer badly. In general terms it might well seem safer to be a European than the citizen of a small nation-state in tomorrow's world. More specifically, if we approach anything like the 1930s era of competitive devaluations and regional trading blocks then the need for a European Union should be clear. “Should" is however the word to use. The next thirty years is likely to present First-World electorates and their political leaders with challenges beyond the contemporary imagination but only too credible to our grandparents and great-grandparents. How we will react is difficult even to guess. The 1930s are not an encouraging precedent. How Europeans respond to the current crisis therefore has implications for the whole world which go beyond even the fear that European failings may lead to a new Great Depression.

Dominic Lieven is a research professor at Cambridge University (Trinity College) and a Fellow of the British Academy






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