Europe in 2011

Europe in 2011
By Roland Bensted

Europe in 2011 was dominated by domestic politics. Faced with multiple macro-level challenges, from unstable economies to democratic deficits of the polity, leaders have repeatedly prioritised local concerns ahead of the multilateral. Underscoring all of this is a wider malaise. Research from the Centre for Economics and Business Research, indicating that Brazil overtook the UK as the world’s sixth largest economy by GDP in 2011, appears to confirm that the West in general, and Europe in particular, is rapidly losing influence. The death in December of Václav Havel, a symbol of the remarkable transitions to peace and prosperity of Central and Eastern Europe of the last 20 years, appears to reiterate the wider depression.

Across the European Union member countries, a number of governments changed hands in 2011 including in Ireland, Italy, Greece, and Spain. Belgium finally acquired a government after 541 days of jostling. Leaders that remained in power, such as Germany’s Angela Merkel and France’s Nicolas Sarkozy, played to a home audience, mindful of important upcoming elections. And in Frankfurt the new President of the European Central Bank, Mario Draghi, took office in November.

The much trumpeted “successes” of conferences in July, October, and December to “save the euro” were nothing of the sort. They achieved little other than the less than noble short-term goal of “reassuring the markets”. And even in this respect, the agreements that were reached appeared to bear fruit only for a few short days before the markets returned to their by now customary fluctuations.

Even the Libyan intervention, which achieved the laudable goal of preventing Muammar Gaddafi’s would-be massacre of his own people - and then toppling the tyrant from power - was prosecuted by leaders with one eye on home affairs, and only once the military firepower of the US was guaranteed.

Coordinated and centralised initiatives such as those proposed from time to time by the European Commission carry little weight with people between the Atlantic Ocean and Aegean Sea. Rather than joining up to a bigger whole, a significant strand of the popular mood - from Scotland through Flanders and Catalonia - is seeking to break away. In reality, such regions are likely to acquire only greater autonomy; full independence for any one of them would set a dangerous precedent that would upend more than sixty years of enhanced European collaboration. Moreover, it is unclear how these small states would be economically viable in today’s austere climate.

So where will Europe head in2012? The omens are not promising. Joblessness is high. The dangers that youth unemployment and disengagement will lead to what the journalist and author Shiv Malik has labelled a “jilted generation”, and widespread social unrest already are feared widely. And, faced with considerable difficulties, much of Europe’s populace is looking ever more inward - taking refuge in local and ethnic identities that are all too willing to blame the “other” for what ails them. On the other hand increasing numbers from the Republic of Ireland through Portugal, Estonia, and elsewhere see emigration as their best - or perhaps only - route to future prosperity. The certainty of the post- World War Two consensus appears to have broken down.

Consequently, it is unclear what kind of EU Croatia will join in 2013. Many economists predict a return to recession for European countries in 2012. Some even predict the end of the euro. It has been reported that the UK’s Treasury is making contingency plans for such a scenario. However, an exit from the euro by one of the weaker members would be disastrous, not only for the country that is leaving the single currency but for the EU as a whole. For this reason, not to mention the lack of a legal mechanism to facilitate an orderly exit, the continent’s leaders ought to do whatever it takes to ensure the continued survival of the euro.  

It is clear that the euro can survive and that Europe’s economies and societies can prosper once again. But it is not inevitable. Such an outcome requires skilful leadership and hard work. Some commentators, such as the late historian Tony Judt, have referred to today’s European leaders as political pygmies when compared to the mid-twentieth century giants such as Attlee and Adenauer. Europe’s current generation of leaders need to disprove this idea. For Europe as a whole was far worse off in the ruins of the post-war landscape of the late 1940s. Macro-level thinking and leadership- not to mention the Marshall Plan- helped Europe to overcome these challenges.

A narrowly defined notion of “austerity” promulgated by Germany, and by technocratic governments elsewhere is highly unlikely to be a viable solution to Europe’s current challenges. At the very least, it is economic growth and government intervention that will help to reduce unemployment, and boost investment. These require big ideas, and a move away from the parochial and short-term concerns that have dominated recent decision making. Yet the even bigger challenge for today’s leaders is to restore a sense of optimism to the populace. It remains to be seen whether they are up to the task in 2012. Many people across Europe are not holding their breath. 


4 January 2012


Related Articles: 

Panos Stasinopoulos, Solidarity vs. Austerity: Mistakes of the Past and Why We Need to Re-invent the Union

Roland Bensted, Can the Euro Survive? 

Panos Stasinopoulos, Europe Through the Looking Glass: Could the Debt Crisis Negate Decades of Integration?