Some words are the property of continental Europeans. You do not hear many Brits or Americans talking about "solidarity”. The expression belongs to the soggy (to Anglo-Saxon minds) consensualism of social market capitalism and to prophets of European unity. What’s happened lately is that solidarity has dissolved. This explains why the euro, and the European Union, are in so much trouble.
Another week, another sticking plaster. The deal to prop up Greece has bought some more time. The important thing – or so we are led to believe – is that the wound has been cauterised. Again. Yet it should be blindingly obvious to all that, in the great scheme of things, the latest bailout is a sideshow.
Two things are needed if Greece is to avoid catastrophic economic and social collapse. They apply whether it stays in or leaves the euro. The first is sufficient political resolve within Greece to reform radically the state and economy; the second is a reciprocal willingness among other Europeans to foot a sizeable bill for the failures and fraud of past Greek governments.
The pertinent question is whether such a bargain is available. The omens are not encouraging. Behind the name calling that marks out Greece’s relationship with its eurozone partners lies a complete breakdown of trust. Many Europeans – and I am not talking only about Germans – do not believe that politicians in Athens will keep their promises; many Greeks think that the draconian austerity demanded as the price of debt relief is calculated to punish rather than rehabilitate. A fair observer would probably say that both sides have a point.
On one level, Greece can be seen as an exception. It is small and it is different. To a greater or lesser degree, the other nations on the eurozone’s periphery have taken the opportunity presented by EU membership to become modern European states. Ireland, for all its present troubles, has flowered as a self-confident nation free of a historic obsession with Britain. Spain has embraced modernity with enthusiasm. Greece’s politicians have never really bothered. Seen from Athens, the EU has been a source of cash rather than political inspiration.
Portugal has been slow to modernise. Its economy, like that of Greece, is in a pretty fine mess. But its politicians show a demonstrable resolve to catch up. So the reservoir of trust has not been drained. Policymakers in Brussels and Berlin will tell you they put Greece and Portugal in very different categories.
Drawing this line is not as easy as these politicians and officials would like. The reason that Greece has taken on such importance – it counts, after all, for only a few percentage points of eurozone output – is because policymakers have allowed it to make a wider statement about the future of the eurozone. Contagion is not a fact of economics but a product of politics.
If markets had been persuaded that Greece really was an exception, it could have been quarantined some time ago. Instead it has come to be viewed as a test of broader political intent – a test, if you like, of eurozone solidarity.
Solidarity, as an insightful study from the Paris-based think tank Notre Europe recently observed, comes in two flavours. There is the simple transactional arrangement – the joint insurance policy against the possibility of this or that calamity – and there is the enlightened self-interest that leads governments to identify national goals in a shared and sustained strategy of integration.
The European Union was built on the latter. It was relatively easy 60-odd years ago. The horrors of two world wars, the common threat from the Soviet Union and the prodding of the US gave an irresistible logic to what the founding fathers called the process of European construction.
Solidarity was not the soppy notion of federalist dreamers. It was part of the hard-headed calculus of interests. It allowed France to claim political leadership and Germany to rebuild its economy and keep alive the prospect of reunification, while Italy could aspire to modernity and smaller states could secure a voice in the continent’s affairs. Sure, solidarity could also speak to a lofty altruism that made people feel warm about themselves, but at root it was all about self-interest.
The single currency was the ultimate expression of this marriage of national and mutual interests – the belief that the economic and political futures of its members were so inextricably intertwined as to make worthwhile an unprecedented pooling of sovereignty. The project’s huge misfortune was to be launched just as most of the other impulses for solidarity – memories of the second world war, the existential threat from communism, a divided Germany – were fading.
There are still plenty of reasons why European nations are better off working together. Most obvious is the need for a voice in a world that belongs increasingly to someone else. Germany, France, Britain – they are all too small for this world. But, important as they are, none of these ambitions – shaping trade rules, tackling climate change, securing energy supplies, or promoting democracy and stability – sounds quite so urgent or compelling as preserving the European peace.
To the extent that solidarity has been evident in the euro crisis, it has been of the transactional, zero-sum variety – creditor countries will do this only if the debtors do that. You could say that this is better than nothing. So far it has kept the show on the road. But it will never properly explain why northern taxpayers should pay southern debts or why southerners should see painful reforms as an opportunity rather than a punishment. That requires the other sort of solidarity.
Copyright The Financial Times Limited 2012.