By Claus Offe
Today Europe unearths itself in a challenge that casts a gloomy shadow over a complete new release. The seriousness of the predicament stems from one middle political contradiction on the center of the ecu undertaking: specifically, that what urgently has to be performed can be super unpopular and accordingly almost most unlikely to do democratically. What needs to be performed - and nearly every body concurs in precept at the measures that might be had to care for the monetary challenge - can't be offered to the balloting public of the center member states, which up to now were much less suffering from the difficulty than these at the outer edge, nor can the stipulations that center contributors try and impose be simply bought to citizens within the deficit countries.
The eu Union is for this reason turning into more and more disunited, with deepening divides among the German-dominated ‘core’ and the southern ‘periphery’, among the winners and the losers of the typical forex, among the advocates of larger integration and the anti-Europeans, among the technocrats and the populists. Europe unearths itself trapped by means of the deepening divisions which are commencing up around the Continent, obstructing its skill to house a trouble that has already prompted large social soreness within the nations of the ecu outer edge and is threatening to derail the very undertaking of the ecu Union.
In this brief booklet, Claus Offe brings into sharp concentration the valuable political challenge that lies on the middle of the european and shackles its skill to house the main critical drawback of its brief history.
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Extra info for Europe Entrapped
Yet a balancing of international trade seems hardly conceivable, as neither Greek workers, pensioners, and political parties trying to defend their interests would allow this to happen, nor would German employers or any conceivable minister of finance. Nevertheless, and given the massive advantages the German economy derives from the existence of the Euro, the prediction does not seem overly risky that must occupy the latter by military means. This is no longer needed. Today one can have perfectly peaceful relations with a particular country and still largely control it – simply by appropriating more and more of its economic assets through running a permanent trade surplus and by destroying its political sovereignty by depriving the country (through austerity and “reform” conditionality and due to its high indebtedness) of its budgetary and other legislative autonomy.
Devaluation would not just lead to exports becoming cheaper, but imports more expensive. Depending on the price elasticity of imported goods, the latter effect will come with the risk of inflation that is likely to destroy the initial export advantage. In order to fight inflation and to fight the flight of capital, interest rates would have to move up, with an equally unwelcome impact for economic recovery. For these and related reasons, even troubled Euro member states, as well as their trading partners within the zone, have equally strong reasons to opt for staying in the monetary union.
But such acquisition of new competencies is inconceivable without them being executed in ways that are democratically accountable to European citizens and member states. As to the first defect, the Euro under the ECB’s regime over-generalizes monetary policy across widely 15 To use just one indicator for illustration: GDP per capita relates from the (admittedly: outlier of) Luxemburg at the peak to Bulgaria at the bottom as 17 relates to 1, with 10 of the 12 new member states together making up the lower end of the distribution, indicating the persistent East–West divide within the EU.