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The debate over Europe’s future

18 November 2011

9:36 AM

18 November 2011

9:36 AM

We’ve got two interventions by high-profile European politicians in the British papers
this morning. In the FT, German foreign minister Guido Westerwelle lays out Germany’s stance,
providing a taste of what David Cameron can expect when he meets Angela Merkel in Berlin today.

He begins by underscoring the importance of keeping the eurozone together:

‘The eurozone is the economic backbone of the European Union. Its stability directly affects non-euro states and global financial markets. An erosion of the eurozone would jeopardise Europe
as a political project, and with it the chance to make our values and interests be heard in the new power set-up of the 21st century.

Stabilising the eurozone is in the interest of all 27 EU member states, not least the UK, with its extremely close economic ties.’

As for how to solve the crisis, Westerwelle dismisses the idea of monetary stimulus through the ECB (‘This would be a momentous mistake’). Instead, he calls for ‘a clear-cut strategy for
competitiveness and growth’ in the EU, with a ‘much greater emphasis on innovation, education and research’. To achieve this, he says, ‘Economic and financial policies must be co-ordinated more
closely’.


In the long-term, Westerwelle claims, monetary union will not be enough. A ‘stability union’ is needed, where the eurozone has the power to sanction countries ‘which continuously deviate from the
fiscal straight and narrow’. Echoing Merkel, he says we’re going to need to ammend the EU treaty:

‘Treaty change will require considerable political will. But if we fail to muster the courage to do this now, Europe will remain permanently vulnerable to crisis.’

In the Times, Spain’s former Prime Minister Jose Maria Aznar also affirms his commitment to monetary union, austerity and structural reforms. Where he diverges from Westerwelle is that
he thinks reforms should be decided at the national – not European – level:

‘While all nations need to reform, we must avoid falling into the political and economic trap of seeking to harmonise reforms across the EU…

Only decisions made at national level will have the necessary legitimacy; it would be a mistake to take shortcuts, bypassing or neglecting the institutions of national democracies.’

Of course, it’s worth remembering where Aznar’s coming from. His conservative People’s Party – currently in opposition – looks likely to win the Spanish general election on
Sunday, and one wonders if he’d have as much faith in the Spanish government if the Socialist Workers’ Party were set to remain in power for another few years.

Between them, these give a nice precis of the arguments over Europe’s future. On one side, those who view a closer, more powerful union as the only way to save it; on the other, those who see that
as a recipe for its destruction.


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