‘The Crisis of the European Union: A Response’, ‘Crisis in the Eurozone’ reviewed by Alex Cistelecan


The Crisis of the European Union: A Response

Translated by Ciaran Cronin, Polity, Cambridge and Malden MA, 2012. 120pp., £16.99 / $26 hb
ISBN 9780745662428


Crisis in the Eurozone

Verso, London and New York, 2012. 243pp., $19.95 / £12.99 pb
ISBN 9781844679690

Reviewed by Alex Cistelecan

About the reviewer

Alex Cistelecan is a lecturer at Petru Maior University, Romania, and post-doctoral researcher at …

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Here are two books on the European crisis that couldn’t be more different from one another: one written by a German philosopher that, in the last decades, had come to play the role of major advocate of the European construction, the other written by a Greek economist focusing critically on the actual mechanisms and structure of the EU; one dwelling exclusively in the elevated realm of constitutional settings and moral grounding, in which all problems appear as mere passing accidents to be remedied by more communication and better legal frameworks, the other highlighting precisely the link between the bright legal and institutional continental design and its underlying contradictions; and, last but not least, one that sees the solution to the European crisis in basically ‘more of the same’ – more integration, more transnationalization, the other pointing to the ‘progressive exit’ of the periphery as the only solution to its distress.

The most striking thing in Habermas’s The Crisis of the European Union is that there is almost no trace of the crisis of the European Union – perhaps this is why the book is subtitled ‘A Response’. In Habermas’s account, everything about the EU seems to be ultimately positive and utopian – at least everything that matters, that is. The European Union is the most daring and advanced project of ‘transnationalization of democracy’, the closest we have ever got to the ‘legal domestication and civilization of state power’ at the international level (x). This process is not necessarily new – it actually started centuries ago with the secularization of political authority and its consequent grounding in processes of legitimation. With the contemporary continental construction, this process is, however, brought to a new peak, since the taming of the Leviathan now acquires also a transnational dimension – replacing thus the more or less enduring law of nature existing at the international level. In order to be able to understand the benefits of this transnationalization of democracy, argues Habermas, we should separate the usually conflated notions of popular and state sovereignty – their association has been merely a contingent, historical fact, originating in the French Revolution. In reality, they are two completely different things: state sovereignty having to do with the freedom of action of states in the international domain; popular sovereignty having to do with the Kantian autonomy under the laws of freedom. Hence, restricting national sovereignty by no means entails restricting popular sovereignty: on the contrary, this process (exemplified by the EU) ‘carries forward precisely the kind of constitutionalization of political authority to which citizens within the nation state already owe their liberties’ (18-19). The perceived menace is the solution itself: the state’s loss of sovereignty is the citizens’ gain.

There are two major institutional innovations that the EU has brought with itself, and that give the real measure of its utopian potential: first, the separation of the monopoly of legitimate violence (which remains with the national state – there is no NATO, nor private armed forces for Habermas) from the power of decision and the authority of the constitution (which are more and more transferred to the continental level). And the double constituency of the European Union: the fact that its citizens are represented and politically active (that is, through representation) both as citizens of their national states and as European citizens. This perfectly balanced institutional and constitutional framework guarantees that the old beast called state-power is completely neutralized, the citizen is not only once, but doubly represented, and ‘the civilizing force of democratic legal domestication’ (3) reigns supreme. Ultimately, everything essential about the EU is good – that’s Habermas’s response to the critics and the alleged ‘crisis’ of the European Union.

All these, as one could easily see, are perfectly in line with what we would expect Habermas to claim in the context of the European crisis – yet, generally speaking, this is a rather curious thing to propose as a major achievement for the EU, especially in the context of its deep and enduring crisis. In this particular context, the liberal focus on the necessary and ultimately redeeming taming of the national Leviathan sounds a little bit out of tune: after all, wasn’t the utmost (yet almost, as it were, deliberate) incapacity of the national states in relation to international capital one of the major catalyzers of the contemporary crisis? In this problematic context, to claim that the clear-cut contradiction between the internationalization of capital (as the only global ‘basic structure’) and the defenseless partialization, nationalization of political and popular power (or, as it is reproduced at the European level, between the common monetary policy and the lack of a similar fiscal policy) is merely a ‘negligence’ (50) to be remedied later by better communication, is, in the best case, proof of an understandable – and ultimately very liberal – desire to sweet-talk oneself. In this context, to brag about the over-representation of the European citizens, when the farces of the French and Dutch referenda, or the mild irrelevance of the European Parliament are so widely known, is, perhaps, somehow emphatic. Not least, to elude the ‘legitimate empirical question of an economic dynamic within world society which has for decades been exacerbating a long-standing democratic deficit’ (12) ‘for reasons of space’ is a little bit too easy: it is like giving a ‘response’ by conjuring away, for being in a hurry, the question itself.

Of course, Habermas is aware that there are still some problems, some troubles with the European project. But the beauty of the perspective offered by the airplane called moral liberal philosophy is that, from its porthole, all problems seem so small and far away. Thus also for Habermas: if there are problems, there are none that can’t be solved by better communication and a little bit more dedication, and definitely none that stem from the very essence or structure of the European project. True, there is the ‘postdemocratic’ ‘executive federalism’ of the European Council, the uncontrolled sovereignty of the European Commission, the relative meaninglessness of the European Parliament, the lack of dedication of the European leaders, the cleavage between the political elites and their constituency, the lack of continental solidarity between the core and periphery. But all this can be solved by one more little effort. The media and the political leaders should put more dedication to sustaining the European cause, some constitutional and institutional negligences should be double-checked, and the people should have more faith in the long run in what is, after all, their own project or, at least, their own real interest. This is the beauty of normative political philosophy: from its perspective, all facts are merely descriptive. Things might look bad on the ground, but let’s face it, they look so good on paper, in the moral and ideal realm of the European idea. If only the European people could become aware of the major historical moment through which they are living: in the same way as its youth finds itself too overqualified to actually work, its citizens are too politically over-represented to actually participate. What more political and economical freedom (i.e., impotent separation and, at the same time, complete exposure to politics and economy) could they possibly want?

In the closing pages of the book, Habermas spells out, in three interviews, his expectations for the immediate future, the positive effects that the contemporary crisis will not fail to bring about: ‘a changed political climate in Europe’, ‘the end of the neoliberal agenda’, ‘the imposition of strong regulatory proposals to control the financial markets’, and, why not, ‘a cross-border awareness of a shared European destiny’ among the people and states of Europe. For a predictive attempt, it is hard to be so wrong in less than a couple of years.

 

With Crisis in the Eurozone, written by Costas Lapavitsas and his colleagues from the Research on Money and Finance group, we get a completely different perspective on the current continental crisis. While for Habermas, the material problems and failures of the union always pop up, as it were, in spite and somehow in parallel to the major breakthroughs and progress happening at the institutional and constitutional level, with Lapavitsas we get a glimpse of the profound and structural nature of these problems, and of the underlying contradiction built into the European legal and institutional construction. With Habermas, the crisis is about ‘negligences’ and contingent subjective short-comings (of the elites, of the media, of the people). With Lapavitsas, the crisis is about structural contradictions, bursting out both externally as increasing gaps between the core and periphery, and internally as a new round of class war waged from above. And while for Habermas, the post-crisis context is ultimately a welcome opportunity to remedy these negligent shortcomings, for Lapavitsas the anti-crisis policies adopted (full scale austerity) are nothing but an extension of the very same things that brought us here.

The ground on which the wonder called European Union was laid was, from the beginning, not exactly even: as Lapavitsas and his colleagues argue, the economic union and the continental treaties, and, more than anything else, the adoption of the Euro, which assured a strong currency for the continent, but deprived its members of the minimal space of national monetary sovereignty, practically fixed and institutionalized the German advantage deriving from its permanent trade surpluses. The European economic dynamic then necessarily reproduced these German export surpluses, with a negative sign, as constant trade deficits in the periphery. Thus, from the beginning, the European Union consisted in an effort to organize, keep together and, ultimately, reproduce a fundamental and founding imbalance.

However, there is more: instead of closing this continental gap between the core and the periphery, the institutional framework of the EU (more exactly, its monetary integration, unsupported by a similar fiscal integration) in practice leads to its widening, by financializing this imbalance under the form of loans from the continental core to the periphery. Thus, the structural deficit is doubled, since what finances these deficits and creates the periphery’s debt is nothing but the same German and North European capital surplus, this time rerouted as loans and valorized as financial packages for the indebted periphery. Numerous graphics and statistics throughout the book give the exact measures of what is, after all, quite a graphic European family picture, in which Germany and its northern neighbors have both the power to oversell their competitors and crush them under their export surpluses, and the generosity to give the poor the loans with which to sustain financially this structural imbalance.

Besides this geopolitical, external level, the second level at which the crisis is tracked by Lapavitsas and co. is the internal, class-related one. This continental structural imbalance between core and periphery is, after all, sustained – or nourished – by the internal class imbalances or contradictions: the systematic squeezing of workers’ wages and curtailment of their political power through repeated waves of flexibilization, privatization and – when nothing else works – austerity, in the name of more and more productivity and competitiveness, a constant menace and terrible imperative which was imposed as the exclusive one by none other than the European project itself. Not surprisingly, as Lapavitsas and his collegues show, the country most successful in repressing its workers’ wages and imposing its model of competitiveness as the best one in town has been Germany. Thus, the rules of the economic game called European Union – structural imbalances of trade internally, and a ‘strong currency’ for everybody – have made it necessary for all member states to outcompete Germany in this ‘race to the bottom’ towards more productivity and competitiveness, imposing thus a condition of perennial austerity and wage compression as the normal social condition throughout the good old and new Europe. From this perspective, today’s European anti-crisis policies are the faithful continuation of its founding mechanisms: increased austerity, normalized misery, continuing class war.

Thus, since the current official solution to the crisis consists in an acceleration of the exactly same things that brought the crisis, Lapavitsas’ alternative comes almost naturally: it is the so called ‘progressive exit’ or ‘debtor led default’. The guiding idea being that, since there is no sight of redemption for the periphery anyway on the existing horizon of the EU, since staying in the monetary union means only perennializing the existing social misery and lack of power, states like Greece and others in similar positions should opt out, thus taking at least into their own hands their destiny (which very much coincides, in this case, with the ability to devalue one’s currency) and organizing, by themselves and for themselves, what will anyway prove to be a difficult depression in the short term. But in the long and medium run, the experiences of Russia or Argentina can only give hope.

Whether one agrees with this radical solution or not – which is very patiently and quite convincingly argued throughout the volume – one has to agree that it touches, at least, the right nerve: while for Habermas the European problem is moral and the solution is superstructural (or vice-versa), for Lapavitsas the problem is both political and economic (structural imbalances and class domination constitutionally fixed and institutionalized as European Union), and the solution should be at the same level. 

21 January 2014

2 comments

  1. Alex Cistelecan sides with Lapavitsas against Habermas for good reasons. Lapavitsas is realist and dialectical in his analysis of the economic woes of the ‘periphery’ within the EU, while Habermas carries forward the vision of the ‘core’ in his liberalist endorsement of greater European integration through additional institutional measures. Habermas does not address the issues of unequal power or uneven development across European nation-states, or how the EU works to the disadvantage of the periphery.

    It is the neo-liberal globalised capitalism – in spirit a regression to laissez faire of yore – that afflicts the world today and any analysis without reference to its dynamics or effects will succeed.

    Sarban

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