For Europe, it doesn’t get better
JOHN LLOYDThe European crisis isn’t over until the First Lady pays, and the First Lady of Europe, Angela Merkel, cannot pay enough. She needs to erect a large enough firewall to ensure that the European Union’s weaker members do not, again, face financial disaster. That will not happen – which means the euro faces at least defections, and perhaps destruction.
The crisis had seemed to recede somewhat in early 2012, and the headline writers moved on. But it had only seemed to recede, and relaxation was premature. As Hugo Dixon of Reuters’ Breaking Views put it on Monday , “the risk is that, as the short-term funding pressure comes off, governments’ determination to push through unpopular reforms will flag. If that happens, the time that has been bought will be wasted – and, when crisis rears its ugly head again, the authorities won’t have the tools to fight it.”
But the underlying tension remains between high indebtedness in nearly all the EU countries and the need to pare back public spending without suffocating the economies. The flat, or negative, growth lines in the same countries that are indebted are likely to be made worse as demand falls and a malign cycle threatens.
Merkel commands the stage, but she is a constrained commander. She has an electorate and a parliament that has been reluctant to agree to more assistance to those whom many Germans see as architects of their own misfortune, not to be trusted to do anything other than load the burden on to the backs of hard-working Northerners.
In other parts of the Union, signs of strain now manifest themselves daily. In France, the leading candidates – President Nicolas Sarkozy and Socialist contender François Hollande – have turned inward and, in the words of a sharply worded Economist editorial, while “it is not unusual for politicians to ignore some ugly truths during elections … it is unusual, in recent times in Europe, to ignore them as completely as French politicians are doing.”
Sarkozy has transformed himself from responsible European statesman into an anti-immigrant, anti-free-trade superpatriot (and his ratings improved). Hollande, from the Socialist Party’s moderate wing, has likewise transformed, but into a “hater” of the rich. Both see strong contenders to their right and left: Marine Le Pen of the far-right Front National has faltered recently – perhaps because Sarkozy has stolen some of her clothes – but she still polls at around 14 percent. And on the left, former Socialist minister Jean-Luc Mélenchon has swung hard-left, put together a group that includes the Communist Party, and seen his support rising in the latest poll, for LH2/Yahoo, up to 15 percent so far .
Britain is not in the euro but is deeply dependent on European resurgence. Its Conservative-Liberal coalition government finds itself faced with strikes by tanker drivers – men with a capacity for squeezing a nation’s windpipe – and plunging polls. Nor is anyone else enjoying support. All the main party leaders see their ratings deep into negative territory; and in a by-election last week, the renegade Labour MP George Galloway played for and won a heavily Muslim vote in the city of Bradford, destroying a long-held Labour majority.
Italy’s governing technocrats, led by Mario Monti, enjoyed a honeymoon even as they sketched out a program of cuts, but now enter a tougher time. The government wants to remove or at least dilute Article 18 of the labor code , which makes it hard for employers to fire workers. The unions have threatened strike action, and Monti, earlier this week, agreed to a compromise with political leaders – but no one knows if the unions will accept it. The Italian press agrees: The hard pounding on his government has begun.
Spain’s center-right government passed a budget last week that was described as “the most austere in democratic history,” with £27 billion worth of cuts. The day before it was passed, a general strike flared across the country , with 1 million protesters on the streets. The government itself fears that the depths of the cuts will stall any growth and that the huge unemployment, especially among the young, will become uncontrollable.
And now little Ireland, which had been the good girl of the euro class, taking its medicine without complaint, has turned. A group of parliamentarians called on their fellow citizens not to pay a recently levied flat-rate property tax  – and were (presumably) gratified to see that, by the weekend deadline to register for the tax, half of the eligible population had not done so, signaling a taxpayers’ revolt. Thomas Pringle, one of the MPs, was quoted as saying  that “if a law is unfair and unjust you have a right to oppose it.” Ireland, which had begun to recover early last year, has seen two quarters of negative growth, slipping the country into recession.
All of this is bad, but worse is the straining away from conventional politics. It takes different forms. The victorious George Galloway, the Bradford victor and a man of apparently indefatigable ability who can muster a ruthless populism, is less important (though not in his own eyes) than the contempt that seems to attend the harassed leaders of the British parties. Parties of the far right and left are significant in France and Greece. In the Netherlands, Geert Wilders’ far-right Party for Freedom has, by contrast suffered a drop in popularity – but that seems to be because he has supported the center-right government, and thus tarnished himself in the eyes of voters impatient for radical action on immigration and crime. Italy’s main parties have been given a holiday from government and even from opposition; but they do not seem to be putting it to use to prepare themselves for hard choices when, as he has promised, Mr. Monti bows out early next year.
Yet only the mainstream parties can command and defuse this crisis. That is not because they have an automatic right to fill the political stage, but because no alternative that can plausibly present itself as better has emerged. The far left and right recycle their nostrums: the end of capitalism or the end of immigration. The Green Party, once a real force in some states, is back to minor status everywhere.
No force, conventional or novel, has yet been able to articulate and win assent for a manifest truth: that Europe’s centrality to world events, wealth and cultural dominance over long centuries are now much reduced, and the decades of growth that brought relative wealth and ease are over. We need not sink, but we have to paddle harder if we wish not to. This crisis is not gone if and when the continent’s finances are made less perilous. If and when that happens, the next mountain to climb is to discover a political and economic structure that can ensure renewed growth, if possible without further gross inequity and without further pollution (some trick!). The challenge of the emerging countries is not just to the cost of labor and the survival of industries: It is to the very understanding we in the West have of our world and our place in it.
The U.S. has sheltered Europe since the war. Europe outsourced most of its defense, and enjoyed – as did the rest of the world – trade, air, shipping and Internet pathways kept open by, in the end, U.S. power. Now, a raft of jeremiads, by Zbigniew Brzezinski , Robert Kagan  and Ian Bremmer , all out this year, point to a dangerous, much more anarchic world that would emerge if the global sheriff lacked the strength to take his boots off the desk and ride out. All of these see Europe as of little help, either unable or unwilling – or both – to shoulder a burden that now urgently needs sharing. The salvation of the euro, and of the Union, is of global import. It has yet to be ensured.
John Lloyd is Director of Journalism in the Reuters Institute for the Study of Journalism at the University of Oxford. This abnigded article is taken from Reuters