European Economics and Identity
Mar 04

europe map

The measure of a successful partnership is not commonality in success but perseverance in hardship.

Take Europe. The continent is known for many things. It was the core of a Roman Empire that ruled and brought modernity (for the time) to the Iberian Peninsula, Gaul, Britain, central and southeastern Europe, northern Africa, Egypt, east Asia, and the Middle East. It nurtured an adolescent Christianity and brought the faith to the world. Its colonial empires brought civilization — and bloodshed — to every part of the world. Its kings and prime ministers waged war with each other for centuries over land and religion.

But apart from vague notions of believing in Christianity, serving as the center of the civilized world, and using Latin, French, and English (at different times) as the common language,  the continent had never had a higher, collective sense of identity. The nations of Europe were just that.

Finally, the Treaty of Maastricht in 1993 aimed to unify Europe, at least in economic terms. After centuries of war culminating in the horrors of World War I and II, the continent believed that economic integration would deter future conflicts. (Germany, for example, would never invade France again if its economy depended on the country.) Moreover, European countries were lagging behind a United States that would soon soar throughout the 1990s in the unipolar world that followed — perhaps only briefly — the end of the Cold War. Japan would soon collapse, but China and India loomed on the horizon. Europe, or so the continent thought, needed to unify in order to balance the United States in the West and Asia in the East as well as remain powerful and influential. Mainstream, economic theory states that free trade and intracontinental immigration — for labor is a commodity in a given market, not unlike cars — would lalso ead to a greater economy of scale that would make Europe more efficient and competitive in a globalized world.

For a while — as long as the economy was good and the European euro was stronger than the U.S. dollar — it seemed to work. The continent seemed to be coming together not only economically but also socially. Washington Post correspondent T. R. Reid wrote in “The United States of Europe” in 2004 that a sense of a collective, pan-European identity pervades young people there:

Gregor [and his friends from various countries are members] of “Generation E” — the young adults of Europe, a continent that has essentially been without borders since the time they finished school. While the Eurocrats in Brussels toil away at the job of creating a unified Europe in the markets and law books, Gregor and his cohort — the age group ranging from about eighteen to forty — are creating a unified Europe of their own, in offices and bars, in soccer stadiums, health clubs, and Internet cafes. Sociologists love to study Generation E, because it represents a new breed of European: a person who considers the entire continent — not just one country of city — to be “home.”

Reid paints a European picture of people scurrying throughout a continent on fast trains, engaging in conversations that are mainly in English; watching the annual Eurovision song-contest (in which Israel, for some reason, is also a participant); and eating the same foods: a coffee and Danish for breakfast, a baguette sandwich and french fries for lunch, and lots of beer in the evenings. (Reid does not identify a common dinner.)

But generic food, schmaltzy music, and quick transportation do not forge an ingrained, inherent, and subconscious sense of identity, at least within a few decades. These items are matters of mere convenience. When a Frenchman sings “Ode to Joy” — the official anthem of Europe — with the same level of pride and gusto that he would for “La Marseillaise,” that will be a beginning.

greek riots

Still, the ongoing turmoil facing Greece, Ireland, and Spain will put the nascent notion of Europe to the financial test:

Angela Merkel, the German chancellor, mounted stiff resistance tonight to any swift bailout of Greece, as a rift opened up between European capitals over how best to tackle the risks posed to the euro.

Despite a show of Franco-German unity on the crisis and the first statement from EU leaders pledging to safeguard the currency’s stability, hopes on the markets of a German-led rescue plan to shore up Greece’s critical public finances were dashed by Merkel, who repeatedly emphasised that Athens would need to put its own house in order and brushed aside all questions of financial support.

“Germany is stepping totally on the brakes on financial assistance,” said a senior EU diplomat. “On legal grounds, on constitutional grounds and on principle.” Another senior diplomat said of the Germans: “They’re not waving their chequebooks.”

Moreover, 90% of people voting in an online poll — albeit an unscientific one — by a German newspaper were against direct aid to Greece. European leaders may state well-meaning platitudes, but the Mediterranean country might be forced to take drastic measures as well:

In any case, they said, assistance would be contingent on Greece holding firm to its promise to dramatically cut runaway spending, which it has said it would do by slashing public-sector salaries and raising taxes — measures that have led to strikes on the streets of Athens.

Still, Germany may be forced to give money to Greece — or even buy Greek bonds — if German banks themselves are threatened. But Germany — and Europe as a whole — will likely not be happy about it.

People will sacrifice anything for those whom they hold dear — most parents, for example, would go into financial ruin before seeing their children destitute and homeless (as long as it was not their fault). Will Germany sacrifice part of its own wealth to help its troubled neighbor to the south?

Psychologist Abraham Maslow proposed his famous hierarchy-of-needs theory in 1943. People must be content with the basics — food, water, economic security, and so on — before they can start to think about abstract notions such as identity, philosophy, and morality. Only someone with the devotion of a good friend (possibly like Germany) would threaten his basic needs to help someone else in bad shape (definitely like Greece). New York Times columnist Roger Cohen compares the situation in Europe with that of early America:

When the euro entered circulation in 2002, the notion was that the shared currency would propel the European Union toward greater political alignment. It hasn’t happened. On the contrary, resentments have grown, performances diverged. Germany is not keen to throw good money after bad to save debt-ridden Greece.

More than two centuries ago, the newborn United States faced a similar crisis of integration. With the Constitution approved, Alexander Hamilton, as treasury secretary to President George Washington, grappled with proving that the government of the 13 states that now existed on paper could function in practice. The economy was a shambles, beset by debt incurred in the fight for liberty…

James Madison complained that his home state of Virginia and some other Southern states that had paid their wartime debts would be unfairly treated if “having done their duty” they were obliged to “contribute to those states who have not equally done their duty.”

You can just hear those words being uttered today by a German burgher or Finnish techie faced by the financial woes of Portugal, Ireland, Greece and Spain — a group that has acquired the acronym “PIGS.”

As Cohen writes, the problem was solved when Hamilton pacified Madison and Thomas Jefferson by agreeing to locate the federal capital in what would become Washington, D.C. rather than New York City in return for the federal government taking on the debts of downtrodden states.

But there was likely more to the solution than an agreement on geography. Following the Revolutionary War, the states had a sense of collective identity and purpose that resulted from shared bloodshed in defense of liberty as well as a devotion to the ideals contained the U.S. Declaration of Independence and U.S. Constitution. These feelings likely helped to override any selfish desires on the part of one or more states.

Modern Europe, however, was not born out of a positive motivation like a fight for freedom — it was created out of a negative feeling of shame resulting from constant warfare as well as a cold, calculated desire to become competitive economically. It’s not exactly something for which people will sing and hold parades 234 years later.

The continent had a fractured, contentious identity for hundreds of years, and it might revert to form if the EU and euro falter. If this occurs, “The United States of Europe” will be remembered just as fondly as “Dow 36,000.”

Samuel J. Scott is a former Boston journalist now living in Israel. He is the founder of the Considerations blog and SJS Consulting Worldwide. E-mail him at sjscworldwide (at) gmail.com.

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