Crisis confirms EU’s lack of federal unity

Do I think of myself primarily as an American, or as a Vermonter?

As a native of Vermont, I've always held a certain pride in the fact that my home state was, before its admission to the union in 1791, one of the handful to have been an independent republic. It was the first place in North America to abolish slavery, the first to enshrine the principle of public education in its constitution and is the only state whose capital lacks a McDonald's. The state continues to demonstrate its independent spirit, being the first to enact civil unions in 2000 and the first to introduce same-sex marriage by a voluntary act of legislation. This past year Vermont created the United States' first state-wide, single-payer health care system.

As a liberal, I am proud of my state probably in much the same way a conservative Texan is proud of his own. However, that Texan has surely entertained a fleeting desire for my hippie socialist haven, that upside-down New Hampshire with all the cows, to secede—perhaps it could glue itself onto Quebec. That's okay; I understand. I have from time to time thought Texas should try returning to the single life, as Gov. Rick Perry himself has suggested. A lot of people in Puerto Rico want a shot at full-fledged statehood; why not let them take Texas's spot?

But both this hypothetical Texan and I understand that these thoughts are simply products of frustration at the policies that other states choose to pursue, or disappointment that our country's politics as a whole do not reflect the values we each espouse, and in which we were immersed during our upbringings. Somehow, despite the myriad cultural, economic and political differences between the states, this country has kept its Constitution alive for 224 years. Even as the country navigates a political environment more angry and divided than ever, that has to count for something. The United States is, at its core, a federation whose contract transcends individual states, parties or persons. Primarily, both the Texan and I think of ourselves as Americans.

Over on the other side of the Atlantic, we see a group of nation-states beginning to confront the same problems that beset the United States under the Articles of Confederation prior to 1787—weak revenue-raising capabilities, onerous requirements for unanimity and crippling debts among them. The European Union (EU)—comprising 27 sovereign states under several overlapping trade and movement agreements, a common currency and a set of supranational political institutions—has been flirting with federalism for the last half century. The degree to which the EU states have already integrated is remarkable when one considers the tremendous gaps in language, culture, history and economy that have been, on the whole, well bridged. But, despite the many acts of statecraft performed since the founding of the European Coal and Steel Community in 1957, the EU is still far from becoming anything like a federal republic.

For the past couple of years the EU has been busily fighting the same global economic crisis from which the United States is failing to extract itself. At the same time it is dealing with another crisis—one the United States conquered in 1787 by ratifying the Constitution. The sovereign debt crisis, sparked by the 2008 banking meltdown and profligate spending on the periphery of the EU, most notably in countries such as Greece and Portugal, has imperiled the single European market made possible by the Schengen Agreement and the eurozone.

In recent months, as the contagion of debt has spread across Europe, the EU's financially stable anchors, especially Germany, have been called on to bail out their fellow member states as they attempt to restore their balance sheets to sustainable levels. German voters and politicians, quite understandably, are less than overjoyed at the prospect of putting themselves on the hook for debts run up by their non-contiguous neighbors. Despite polls showing over a third of Germans wanting countries such as Greece kicked out of the eurozone, many fear the effects of letting the euro collapse more than they rue the idea of pooling yet more money into the euro rescue fund.

Just this past week German Chancellor Angela Merkel managed to coax her fractious coalition in the Bundestag to approve a huge increase in funding for the European Financial Stability Facility—a fund created in 2010 to provide assistance to troubled economies and, more recently, to purchase toxic government bonds—boosting it from $440 billion to $780 billion. Most of the expansion, if ultimately implemented, will come directly from the German federal government. To put it another way, German taxpayers are being called upon by their elected officials to pay directly for crises whose roots lie outside their borders, in Greece, Portugal and Ireland.

And yet this is not done in a spirit of generosity; it is done begrudgingly and for the sake of pragmatism. In terms of the EU there is little of the spirit of broad nationalist fraternity that, much of the time, will smooth over the differences between a Californian and a Mississippian. The overall lack of grassroots support for full-blown European integration (the EU came closest to ratifying a constitution in 2005 through national referenda, ultimately settling for a synthesis of previous agreements with the Treaty of Lisbon in 2009) means the pressure to move forward with bold plans such as mutually guaranteed Eurobonds and tightly organized fiscal policy must continue to come from the top downward. And, because the EU's total budget represents just over one percent of the GDPs of its constituent nations, Eurocrats must continue to negotiate crisis responses in an increasingly strained intergovernmental framework if they want to put enough money behind them. If James Madison and Alexander Hamilton were around today, they would doubtless be experiencing some measure of déjà vu.

In the short run, the EU's response to the crisis has been faltering, causing markets to doubt policy-makers' overall capabilities, triggering volatility in bond spreads and stock markets, and chipping away at economic growth. The top-down approach is not proving equal to the task at hand, which is why the European Commission and Parliament are stuck pursuing dubious stop-gap measures (such as an EU-wide tax on financial transactions) and soliciting voluntary contributions from the private sector. In the meantime, people in Germany are looking on with apprehension at the metamorphosis of the EU from simply an optimum currency area into what they more and more perceive to be a "transfer union."

If the top-down approach has been so problematic, might there be a path toward a bottom-up, grassroots approach to European politics? Europe's fantastic cultural and linguistic diversity will always be one of its greatest assets, but bridging those gaps to achieve a fuller political union will also prove one of its greatest challenges.

There have been attempts at forging a European identity similar to the American one, based on unifying symbols and festive events; the EU has adopted a "national anthem" of sorts, "Ode to Joy" from Beethoven's Ninth Symphony; uses Europa, a figure from Greek mythology, on much of its print material; and observes an annual Europe Day on the May 9, celebrating the perpetuation of European peace and unity. But these efforts have all begun at the institutional level, and do not translate into an organic culture. American traditions such as Thanksgiving, Independence Day and Memorial Day sprung up within communities and spread gradually through the country; eventually they would come to be legitimated and commemorated by the federal government. But this process, along with all the other countless aspects of American culture, took decades upon decades to become what has been variously called a "melting pot" or a "salad bowl."

Might citizens of the EU someday come to think of themselves primarily as European, proudly connected to the histories, languages and cultures of their home states but still profoundly cognizant of their Europeanness—sharing the legacy of a union created to lock away the horrors of history's greatest wars? Will they someday cease to be wary of a "transfer union"—which is, by the way, exactly what the United States has been for its lifetime?

All of this, if it happens, will take decades to occur, and will require the coalescence of 500 million minds. A full-fledged constitution probably wouldn't hurt. The more pertinent question, it seems, is whether or not the EU will be able to survive the next few years, or even months.

For now it is up to the technocrats in the Commission and Parliament to display sufficient conviction toward European unity to weather the current crisis. If they fail to do so, the consequences could be economically disastrous. If they succeed, the European dream may yet continue to have life in it. Maybe we on the other side of the pond could learn something about the concept of unity as we watch it all happen.

—Lane Kisonak '13 is a political science major. He is currently studying at the University of Edinburgh.