The European Union was conceived in hope: hope that peaceful, law-based integration would exorcise the demons of the Continent’s past and embed democratic norms and institutions in its political culture. That hope has come closer to realization than anyone could reasonably have expected when the process started 60 years ago. The centuries-old struggle for mastery between France and Germany has come to an end. The fascist regimes that once ruled Portugal, Spain and Greece have disappeared, as have the Soviet puppet regimes that once ruled 10 nations in central and Eastern Europe.
But these achievements are now in danger. Thanks to the euro zone crisis — and the mixture of political sclerosis and financial turbulence that have accompanied it — we can no longer take for granted that the democratization of Europe is a done deed. In Portugal, Greece, Spain, Italy and Ireland voters have discovered that the bond markets have more power over their destinies than they have themselves. In Europe’s troubled periphery Abraham Lincoln’s Gettysburg Address has been amended: government may be of the people, but it is for the credit ratings agencies.
Behind this brute reality looms the perennial question of how compatible democracy and capitalism are — and how to resolve the inescapable tension between the two. These aren’t new questions, but they are more neuralgic in Europe today than at any time since 1945.
The impotence of sovereign governments in the face of global market power has led to apathy and extremism. Turnout in European Parliament elections has fallen from 65 percent in 1979 to just 43 percent in 2009. In Poland’s last parliamentary elections less than half the electorate bothered to vote; in Hungary, only 46 percent did.
In the first round of the French election last April the far right and extreme left won a combined 29 percent of the total popular vote — more than the defeated President Nicolas Sarkozy or the eventual victor, François Hollande. In Greece’s June 17 election, the far-left Syriza party won 27 percent of the vote and neo-Nazis from the Golden Dawn Party took 7 percent. Italy’s Northern League, the Dutch Freedom Party, Poland’s Law and Justice Party, the Austrian Freedom Party and the Jobbik party in Hungary are all variations on the same far-right theme. Apathy is like a slow, wasting disease; populist extremism is more like an aggressive cancer. Together, they pose a profound threat to European democracy.
More technocratic rule is certainly not the solution. Current talk of a banking union and even of a fiscal union is little more than displacement. The only way out of Europe’s impasse is a genuine political union. A frequently heard objection is that this would give even more power to the remote and unaccountable European Union bureaucrats and bankers in Brussels and Frankfurt. That, critics argue, would further erode the authority of democratically elected national parliaments and governments — the sole repositories of the popular will.
But European integration has already gone too far for national authorities to control its workings. In the areas where the European Union is competent, most legislation is now decided on the European level and rubber-stamped by national parliaments. Moreover, European national authorities, taken individually, are simply too weak to counterbalance the agglomerations of financial power that globalization has spawned. Not only are European Union members impotent in the face of the bond markets; national governments are constantly tempted to compensate for their impotence by snatching competitive advantages from their neighbors. Britain is the worst offender. It insists that the European Union’s internal market must be maintained on lines favorable to Britain, but refuses to pay a penny to help the euro zone.
Germany is not far behind. It is the chief beneficiary of the euro, which has given German export industries the boon of an undervalued currency. But instead of recognizing that Germany and the weaker euro zone economies have a shared interest in its prosperity, Chancellor Angela Merkel seems intent on forcing them into a downward spiral of austerity, debt and more austerity. Given all this, it is a miracle that the rising tide of populist extremism has not yet reached the levels it reached during the 1920s and ’30s, but it would be foolish to assume that the miracle is bound to last.
Political union is not a panacea. Everything depends on how it is constructed and what purposes it serves. It seems pretty clear that Ms. Merkel sees political union as a way of locking the Continent into German-style fiscal rectitude — in other words, German-imposed austerity — which will lead only to more apathy and extremism.
But political union does not have to be a German-imposed austerity trap. No iron law decrees that a democratic federal union, based unequivocally on the principle of popular sovereignty and designed to foster civic engagement on all levels of government, is beyond the bounds of possibility. The obstacles are timidity, lack of imagination and small-minded nationalism, not inexorable fate.
The economist and diplomat Jean Monnet, one of the greatest Frenchmen of the last century, overcame precisely those obstacles 60 years ago, when he persuaded his government to take the first step to what became the European Union. The great question now is whether France’s new president, Mr. Hollande, or Italy’s prime minister, Mario Monti, will have the weight and will to persuade Ms. Merkel to take the first step toward a truly democratic Europe.
David Marquand, the author of The End of the West: The Once and Future Europe, was a Labour member of the British Parliament and an official at the European Commission.