The EU Crisis and the Issue of Sovereignty (Agenda)
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Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, Stratfor cannot guarantee their complete accuracy
Video Transcript:
Colin: It's by now an all too familiar story. Just as the Greeks have yet another general strike -- with teachers, doctors, taxi drivers and air traffic controllers taking part in the 20th such 24-hour strike in two years -- up in Brussels the leaders of the 27-nation European Union are having yet another summit. There's been plenty to bicker about: the French don't care for the German plan for Brussels to have the power to veto member states' budgets, and there are reports that Greek celebrities, including some politicians, have not been paying their taxes.
Welcome to Agenda, and joining me to take a sober look at the latest developments in the overarching problems of the EU is Stratfor's European analyst Eugene Chasovsky. Eugene, we get the point where people are saying, "Not yet another summit." But the start of this one has not exactly been auspicious, has it?
Eugene: Right, as you mentioned Colin, this is not the first summit that the Europeans will hold and certainly not the last. There's a lot of items on the agenda that the Europeans have been talking about for the past few months, for even longer, and will continue to discuss this mainly because these are pretty important issues -- of integration, proposals such as the banking union, fiscal union -- that will take a long time for the Europeans to "sort out." And because there are so many divergent interests there and so many differing viewpoints, whether it's between France and Germany, or Spain, Portugal, Italy, these certain issues that they need to sort of discuss and try to come to some sort of, albeit watered-down common ground.
Colin: Sovereignty is the key issue. Countries are reluctant to hand over power to Brussels, especially for the big decisions. We have not only Britain, now really half-hearted about the EU, but former stalwarts like France wanting their own way.
Eugene: Right, exactly, and it's really a question of how much sovereignty a country is willing to give up within the European Union, within the eurozone. And one of the major issues within these groups is that different countries have different interests and therefore how much they're willing to give up and how much they're willing to integrate varies. So as you mentioned, the U.K., which is actually outside of the eurozone, is a lot more cautious in any sort of the integrationist moves that take place within the EU, particularly those that it does not get a say on, such as the current banking union that's being discussed and that will be discussed at the summit. Other countries are more willing to integrate. Countries like Germany, which knows that there needs to be degree of accountability, that there needs to be a degree of control over budgets, over these various things that will help the eurozone get out of this crisis.
Colin: I'll come back to banking and fiscal integration in a moment. But an area where there has been some integration, following the Lisbon Agreement -- foreign affairs -- with a Brussels-based so-called high representative, Catherine Ashton, in charge -- this has not exactly been a success.
Eugene: Right, and to sort of understand this phenomenon you have to go back to the foundations of the EU, which started in the -- after World War II, in the post-World War II era, in 1950s it essentially started as a customs union and from there the European project ended up expanding into a lot of different areas, most notably in the form of the eurozone when the common currency was created. Now areas like foreign policy, areas like defense policy, these are key elements of sovereignty that European countries hold very closely. And so these are the least likely areas where Europeans are interested in integrating to a certain extent.
Colin: Coming to the core economic issues, the fact is, there are 27 members and they're not all created equal. And even if you do move billions of euros from one part of Europe to another, it doesn't add up to a coherent whole.
Eugene: Well it's definitely true that all states aren't created equal, and here you have the core geopolitical fundamentals -- such as the geography that shapes the nation, the demographics of the country, the resources within the country -- these things will ultimately shape how strong, how economically viable a country is. So whenever there's any sort of integration processes, as we've been seeing within the EU, this is not an integration of equal states, but rather the stronger countries, particularly in Northern Europe, like Germany, will tend to dominate or at least lead the process in shaping policy for the wider bloc. So this inevitably leads to tensions between these various countries.
Colin: And also tensions within countries. In Germany, Angela Merkel has just come under attack from her Social Democratic rival for what he called mobbing against Greece and wrecking Germany's good name amongst its European partners.
Eugene: Right, and this adds another complicating element to the European crisis, which is not only the divergence between countries, but the dialogue that's happening within countries with certain parties that are more interested in furthering integration, while other parties within countries such as in Germany, are wary of what this further support of countries like Greece will entail and how much longer they'll have to support Greece when many view that the Greeks are not holding up their end of the bargain in terms of applying the austerity efforts and in terms of keeping their books clean.
Colin: Eugene, isn't the real problem that the elites that run Europe have simply not been able to produce convincing arguments that integration will produce greater prosperity for everyone, not just the most efficient countries?
Eugene: Well the problem is that integration -- when the EU was founded and as it turned and the eurozone, in its heyday, in the 90s and the early part of the 2000s, it was during a period of relative prosperity for Europe. And so this sort of fed this process and caused integration to go even further. Now that that prosperity is pretty much gone and most European countries are struggling, it's difficult to advocate this case. However, you have to ask the question of, is there a better alternative to integration? Because essentially what has happened is that, while the European countries did integrate on things like their monetary systems, this was not accompanied by integration in regulation, integration in their fiscal policies. So they're basically having to address each problem as it comes on a piecemeal basis. But this doesn't necessarily mean that disintegration is favorable to integration at this moment.
Colin: Is there a better alternative? Some say there could be regional groups within Europe, such as a Hanseatic zone, and there have been suggestions that Germany should return to the deutschmark, leaving the euro with the others. Unfortunately, we don't really have time to discuss this but, what's your hunch?
Eugene: Well certainly we have seen a process of what we like to call a regionalization of Europe. Where we've seen growing cooperation within sub-regions of Europe, rather than within the entire European Union or the entire eurozone. So for instance, we've seen the Nordic countries and the Baltic countries start to discuss more economic cooperation between these countries -- even going into areas of security and defense policy. We've also seen this to a certain extent in Central European countries. However, all of this, all of these regionalization practices have still been occurring within the framework, within the broader framework of the European Union, and none of these countries are integrating at the expense of their relationships with other European countries, but are doing so in a way that is sort of a supplemental form. So for all countries interested, nobody is looking towards a eurozone collapse or a European Union collapse as preferable. They're merely going towards the natural economic and political relationships that would occur and really just seeing the crisis out.
Colin: Eugene Chausovsky, ending this week's Agenda. Thanks for watching, see you next time.
