ON WEDNESDAY TAOISEACH Enda Kenny presided over a ceremony at Farmleigh House where he launched a new EU tapestry to be woven by people from all 27 member states. Based on a painting, ‘Unity’ by Reitlin Murphy, the tapestry will display the word ‘unity’ in several languages as well as European flags. The Irish Presidency of the EU, now entering its fourth month, has been in hyperactive mode as intensive negotiations on the Common Agricultural Policy have concluded successfully and efforts to deliver key legislative priorities have ratcheted up.
Against this backdrop of technocratic ‘business as usual’, however, the European project continues to unravel. The increased prospect of a full-scale Eurozone implosion hangs like a menacing tableau in the post-modern palaces of the EU quarter in Brussels. It is difficult to make the case for EU unity and solidarity when a small member state has just been so spectacularly hung out to dry. Because Cyprus is adjudged to constitute a ‘non-systemic risk’ to the Eurozone it can be sacrificed on the altar of German electoral considerations and the continuing attachment of our leaders to ‘austerity fetishism’.
Trapped in a vortex of economic dysfunction
Judged even on its own term, austerity has been a total failure. After five years of tax rises and devastating spending cuts Ireland is still trapped in a vortex of economic dysfunction, weighed down by its commitments to the Troika and denied the oxygen of even modest growth which might help to alleviate unemployment and severe social distress. Earlier this week former US Treasury Secretary Larry Summers delivered a devastating critique of UK fiscal policy, stating that reductions in spending had not only failed to reduce the deficit but had actually impeded economic recovery. In much of Southern Europe austerity is responsible for producing the kind of unbearable social dislocation that we last saw in Europe in the immediate aftermath of World War Two.
In Spain and Greece the unemployment rate is heading for 30 per cent, with youth unemployment running at double this rate. With further spending cuts in prospect for a significant period to come these societies are experiencing a truly existential crisis. In the wake of its so-called ‘bailout’ Cyprus now has a clear template for what will follow in the months and years ahead.
The real people of this crisis are hidden
The human tragedy which is often obscured by the deliberately opaque political discourse employed by EU elites and their spin doctors (‘adjustment programmes’, ‘recovery mechanisms’, ‘reform trajectories’) is exemplified in the recent experience of Bulgaria. Although it is not a member of the Eurozone its currency, the Lev, is pegged to the Euro and Bulgarian government policy in recent years has been to rigorously impose and stick to a programme of almost masochistic austerity in order to prove to the mandarins of Brussels and the IMF that the country will at some point be ready to assume the ‘responsibilities’ of membership.
That Bulgaria actually has an extraordinarily low level of national debt (about 16 per cent, lower even than Luxembourg’s) did not prevent the Borisov government reducing public service pay and pensions for four consecutive years in the name of fiscal rigour. In 2012 the retirement age was extended by one year with immediate effect. As Bulgarians endured the worst winter in decades they had to contend with huge increases in utility bills which pushed many households over the edge of absolute poverty. The shocking denouement to this terrible societal tragedy has seen six men set themselves on fire since mid-January. All of them subsequently died from their injuries.
The greatest danger to social harmony
That European citizens are now living in such desperate circumstances that they are prepared to self-immolate constitutes perhaps the most shocking indictment of the austerity policy mix championed by Brussels. Technocratic management-speak assumes almost Orwellian dimensions as Europe’s social foundations are being inexorably destroyed. A European integration process instituted in the 1950s to protect Europeans from the ravages of war and conflict has now become the greatest danger to social harmony across the continent.
Prior to the onset of the financial and economic crisis the European Union had an image problem. Perceptions of a so-called ‘democratic deficit’ revolved around the alleged gap between EU elites and ordinary people, that ‘Brussels’ was too remote from the concerns of its citizens, and that its institutional architecture was too obscure and operated in a governance ’bubble’ divorced from the realities of European life.
If the most obvious impact of the financial crisis has been felt in the economic sphere, the Bulgarian and Cypriot imbroglios also provide us with a timely reminder of the extent to which the EU has lost public opinion. The latest EU-wide ‘ Eurobarometer’ survey demonstrates that 29 per cent of the EU population had a negative view about the EU, a figure which represents an all-time high and almost double the level recorded prior to 2008. Simultaneously only 30 per cent of respondents hold a positive view of the EU, down from 50 per cent. There is a clear and discernible ‘Euro crisis’ effect in these figures and they demonstrate the extent of the gap between Europe’s elites and citizens.
A model for future bailout models?
The Cypriot case demonstrates that the European authorities are now prepared to cross the rubicon into the appropriation of deposits. Jeroen Dijesselbloem, head of the Eurogroup, let the cat out of the bag on Monday when he stated that the involvement of shareholders, creditors and large depositors in the Cyprus bailout could become a model for future bailout operations. Although he later retracted this statement it seems clear that the Cyprus crisis has seen the Eurozone enter a new and dangerous phase.
With each successive ‘fire-fighting’ operation it becomes clear that this is increasingly a self-inflicted crisis, one made possible by systematic mismanagement by European authorities. Markets are in the ascendancy and are now capable of driving sovereign governments toward the precipice of societal destruction. And all the while our leaders speak of ‘unity’ and ‘solidarity’.
Dr John O’ Brennan lectures in European Politics at NUI Maynooth and is Director of European Studies and of the Centre for the Study of Wider Europe.