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article imageTriple whammy threatens Eurozone Special

By Les Horvitz     Oct 12, 2015 in Politics
New York - Three recent crises — the Greek bailout, the surge of refugees and Russian intervention in Ukraine — have called into question the future of the European Union. All these crises involve boundaries – either building them up or tearing them down.
If anything, the arrival of hundreds of thousands of refugees, many fleeing the war in Syria, poses more of a threat to the EU than either the possibility of the Grexit or the conflict in eastern Ukraine and Russian takeover of Crimea. While Germany and Austria have welcomed the refugees, Hungary has thrown up a wall and Serbia has closed its borders to keep them out, widening the rift between Western Europe and countries formerly part of the Communist bloc.
Can the Eurozone survive the turmoil in its current form? That was the question that recently brought authorities on Europe together for a panel discussion sponsored by the Foreign Policy Association in New York.
Anu Bradford, a professor at Columbia Law School, points out that each crisis represents a different kind of threat not only to established borders but to the very idea of the European unity. What defines Europe? It is its physical borders or its democratic values or both? “Is it the Mediterranean? Russia? Turkey?” she asks. “Where does Europe begin or end?” If it’s defined in terms of adherence to democratic values then shouldn’t it expand to include New Zealand and Australia? Those nations have more in common with Germany, France, and the UK than Hungary or Serbia do. In her view, keeping Greece in the EU was crucial for Prime Minister Angela Merkel — Germany is Greece’s biggest creditor — because Germany didn’t want to be seen as responsible for tearing apart Europe again. If Greece had been expelled for failing to meet its debt obligations it would have resulted in a redrawing of EU borders for the first time since its creation and amplified concerns about the viability of the more fragile economies of Italy, Spain and Portugal as well. In that respect, it was a north-south conflict. The Russian incursion into Ukraine, by contrast, represented an east-west conflict and raised the question: Who is protecting the borders? (‘No one’ is the answer that jumps to mind.) Migration, on the other hand, represents a total loss of control over borders.
At the root of all these crises is the unwillingness of member states to give up their sovereignty. German voters didn’t want to keep bailing out Greece for the sake of Europe and Greece felt violated by the onerous conditions imposed on it to stay in the EU. “One reason the Eurozone almost disintegrated this summer is because all politics are local,” Bradford says, and those local politics often are inimical to European union as evidenced by the rise of such extreme parties as Syriza in Greece on the left, and the Independence Party in UK and the National Front in France on the right. Many of these formerly fringe parties can claim up to 20-25 percent of the electorate. Economic governance isn’t consolidated, either even though most members of the EU (with the notable exceptions of the UK or Denmark) share a common currency. The European Central Bank can influence the economy through monetary policy, but it can’t singlehandedly try to revive the Spanish or Italian economies, for example, not when their budgets are determined by their individual parliaments.
The Ukrainian situation presents problems of an entirely different sort. That Europe might have been surprised by the not-so-covert incursion of Russian troops last year (jokingly referred to in the media as ‘little green men’) shouldn’t be surprising at all, says Kimberly Marten , a political science professor at Barnard College. Putin tends to keep his own counsel. There’s no institutional input. Either he makes major decisions on his own or else relies on the advice of a few cronies, most of them former FSB or KGB agents who are practiced in lies and deception. “They like surprises.” It’s a mistake to think of Putin as a masterful chess player who regularly outmatches the West, Marten says. “Putin doesn’t play chess. He’s a judo fighter.” A judo fighter walks into a room, sizes up his opponents, looks for their weaknesses, and then flips them. “Victory goes to be the last man standing.” His thinking is tactical, not strategic. Putin, she believes, has two principal interests: keeping himself in power and enriching his close associates by giving them a cut of state contracts for big infrastructure projects like the Olympic Games or weapons sales. “Putin is also interested in making sure that he goes down in history as the person who restored Russia to be a great power.” In Ukraine — and more recently in Syria — Putin needs to show that he’s stronger and force the West to back down. Indeed, Marten says, Putin felt that Western Europe would eventually lose its appetite for sanctions over Ukraine because it depends so much on Russian gas for energy. The downing of Malaysian Flight 17in July of 2014 — most likely by Russian-backed separatists — derailed his plans by stiffening European resolve. “If you want to have a solution to the Ukrainian crisis you have to make Putin feel good,” Marten says. But neither Europe nor the United States seems in any mood to do that. Nonetheless, he has majority support among the Russians. And as he gains in popularity, she warns, he will become more erratic. She can even see the crisis in Ukraine — exacerbated by the existence of dozens of militias that aren’t under the control of either the separatists or Kiev — escalating until it plunges the U.S. and Russia into a scenario eerily similar to the showdown in the Cuban missile crisis.
For the time being, though, migration is the most challenging crisis to hit Europe and it’s likely to be more enduring and fundamental. Under the Schengen Agreement , people have the right to travel freely throughout the Eurozone. But that still didn’t stop Hungary and other Eastern EU members from barring the passage of refugees. There are cultural obstacles as well as physical barriers; Europe has little experience with immigration from the Middle East and sub-Saharan Africa and its population is largely homogeneous and predominantly Christian. (Hungarian Prime Minister Viktor Ordon declared that his country was only ready to accept Christian refugees.) Ironically, Europe needs new blood because of demographic trends: the population is aging and eventually there won’t be enough people of working age to support their economies. “Europe can’t be a fortress,” says Bradford. “Europe still has the wealth and need for these people.” But she agrees that it can’t possibly accommodate an unending flood of refugees, either. The crisis might even spell the end of Schengen.
“The scale of the global refugee is not just a crisis on TV,” notes David Miliband, President and CEO of the International Rescue Committee, speaking recently at a conference in Washington, DC. “It’s begun to have an impact on the global consciousness.” Last year alone, 20 million people fled their homes and another 40 million were internally displaced. The current refugee crisis differs from those in the past since it isn’t caused by wars between states, but by civil wars — some 25-30 of them at the present time. While it’s clear that Europe has no overall policy to deal with the refugee problem, Miliband isn’t about to let the U.S. off the hook, either. After all, it’s only taking in 70,000 refugees a year while Germany has opened its doors to half a million annually. It’s important to distinguish between migrants and refugees, he emphasizes. The 1951 Geneva Convention grants absolute rights to refugees, obliging UN member states to grant them sanctuary, which isn’t the case with migrants. (Refugees are those who unable to return home because of a legitimate fear of death, torture and persecution; migrants are more typically people who are seeking work and better conditions abroad than they can find at home.)
But for all its problems, Europe might still have a great future –if only it can get its act together. The European Union has created the world’s largest single market, removed trade barriers and served as a driver for growth, says Matthew Rycroft , the UK’s permanent representative to the UN. “Small (European) countries clubbing together have more weight than they would have had on their own.” They can also tackle big global problems together that no country can do alone like human rights and climate change. Yet Rycroft is aware of the possibility that his own country could withdraw from the EU if the English vote to do so in a referendum scheduled for 2017. Such a Brexit would seriously damage prospects for the union’s survival. “People don’t want to see decisions about their lives made in Brussels,” he warns, echoing the concerns of countrymen, many of whom take a dim view of the EU. Europe is now a national/supernational hybrid, a state of affairs that he regards as unsustainable.
The European experiment will succeed, declares Ferdinando Falco Beccalli , , the moderator of the New York panel and a business executive, “if it welcomes migration of people who are willing to work and agree to abide by the rules.” The European Union, he reminds us, is only sixty years old. The realization of the dream that gave birth to it may take many years, he admits, but he confidently predicts that it will happen.
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