Habermas on the State of Europe

The Financial Times has posted a new story on Habermas, complete with a brief interview. While the story itself is so-so, Habermas’s responses to the questions are worth a look. Here is the Q&A in full:

In 2008, you published a book entitled Ach, Europa (published in the UK as Europe: The Faltering Project). How does Greece’s debt crisis deepen the worries you expressed there for the future of the European project?

Greece’s debt crisis has had a welcome political side-effect. At one of its weakest moments, the European Union has been plunged into a discussion concerning the central problem of its future development. The crisis shifts the focus of public discussion – and not only in the business sections of our national papers – of an issue that many regard as the birth defect of an incomplete political union stuck in midstream. A common market with a partially shared currency has evolved within an economic zone of continental scale with a huge population; but European-level institutions with sufficient powers to ensure effective co-ordination of the economic policies of the member states have not been created. That the debt crisis and the unstable euro at least touch upon the pivotal question could reflect a trace of the cunning of reason: is a stability pact riddled with holes sufficient to counterbalance the unintended consequences of a planned asymmetry between economic and political unification? The collapse of the Spanish real estate market shows that the problem is more than a matter of cheating by the Greeks. The commissioner for monetary affairs, Olli Rehn, has good reasons to call for rights of consultation and intervention for the European Commission in national budget planning.

Germany’s finance minister, Wolfgang Schäuble, has advocated the creation of a European Monetary Fund that could provide aid in future crises. Is that feasible or desirable? Can Europe effectively resist the depredations of speculative capitalism that have threatened to bankrupt Greece and destroy the eurozone?

The current threat throws light on a fundamental problem because it affects the deeper conflict within the EU between integrationists and, let me say, market Europeans. At its most recent sitting, the European Council established a “task force” under the leadership of its president Herman Van Rompuy, which is expected to develop proposals for avoiding future state bankruptcies. Schäuble’s plan for a European Monetary Fund will play a role in this process, just as will the insistence of the European Commission on greater influence over the budget planning of the member states. It is important to recognise the ambiguity of both initiatives. In each case the declared intention is only to create instruments within the framework of the treaties to ensure more effective compliance with the stability pact. On the other hand, the enhanced inspection and control rights that would either be attached to loans or permanently exercised by the Commission can also be understood as a starter drug for developing an economic government, at least in the eurozone. The EU finance commissioner would like to inspect the draft budgets of the national governments even before they are submitted to the national parliaments. Since budgetary law is the core of parliamentary democracy, such a prior right of inspection of the Commission would be far from harmless and require a further shift of competences towards the European Parliament.

Angela Merkel told the Bundestag that existing EU rules were not strong enough to deal with the crisis triggered by Greece, and that in such circumstances it may be necessary to throw a country out of the eurozone. Is she right? And what would be the consequences for the European project?

Such a lack of solidarity would certainly scupper the whole project. Of course, Merkel’s statement was intended at the time for domestic consumption in the run-up to the important regional election in North Rhine-Westphalia. But there can be no better illustration of the new indifference of the new Federal Republic than her insensitivity to the disastrous impact of her words in the other member states. Merkel is a good example of the phenomenon that “gut politicians who were ready to take domestic political risks for Europe are a dying breed”. This is a quotation from Jean-Claude Juncker, himself one of the last pro-European dinosaurs. Admittedly, Angela Merkel grew up in East Germany and the Rhinelander Jürgen Rüttgers [another CDU politician] would not speak like her. But German intransigence has deeper roots. Apart from Joschka Fischer, who ran out of steam too quickly, the generation of rulers in Germany since the chancellorship of Gerhard Schröder has pursued an inward-looking national policy. I don’t want to overestimate the role of Germany in Europe. But the breach in mentalities which set in after Helmut Kohl has major significance for Europe.

Within the constellation following the second world war, the cautious pursuit of European unification was in the country’s interests because it wanted to return to the fold of civilised nations in the wake of the Holocaust. It looked like the West Germans would have to come to terms with the partition of the country in any case. Mindful of the consequences of their former nationalistic excesses, they had no difficulty in relinquishing the recovery of sovereignty rights and, if necessary, making concessions that would in any case pay off for the Federal Republic. This perspective has changed since the reunification. The German elites seem to be enjoying the comforts of self-satisfied national normalcy: “We can be like the others once again!” I don’t share Margaret Thatcher’s one-time fear that this “normalisation” of public consciousness entails the return of old dangers. But a total defeat connected with an inconceivable moral corruption also created an opportunity for the following generation to learn more quickly. Looking at our present political elite, this window of opportunity seems to be closed. The narcissistic mentality of a self-satisfied colossus in the middle of Europe is no longer even a guarantee that the unstable status quo in the EU will be preserved.

Why is maintaining the eurozone important for the future of Europe as a political project?

Economic unification is the core of political unification. On the continent, we already experienced this during the 19th-century processes of national unification. In complete contrast to that time, however, European unification remains to this day an elite project. We have yet to experience a European election in which the outcome turned on anything other than national topics and tickets. Until the Maastricht treaty, the unification process was also, if not primarily, driven by economic interests. Since the interests of the “market Europeans” were satisfied at that time, the economic impulses driving a further deepening of the institutions have lost their dynamism. The eastward enlargement of the EU was an historic achievement. But the arduous repairs undertaken in the Lisbon treaty revealed the limits of an elitist approach to issues of political integration above the heads of the national populations. The financial crisis has reinforced national egoisms even further but, strangely enough, it has not shaken the underlying neo-liberal convictions of the key players. Today, for the first time, the European project has reached an impasse. Imagine the improbable scenario of a co-ordination of the economic policies of the eurozone countries which would also lead to an integration of policies in other sectors. Here what has until now tended to be an administratively driven project would also take root in the hearts and minds of the national populations. The symbolic power of a common foreign policy would certainly promote a cross-border awareness of a shared political fate and bolster a further democratisation of the EU.

What is abhorrent to you about a neo-liberal network of European states, each just one selfish player in a capitalistic world?

I am no expert concerning the economic controversies over the doctrine of the Chicago School. But what annoys me – aside from the insensitivity of neo-liberal policy to the external costs of the social upheavals that it callously takes for granted – is the lack of a historical understanding of the shifts in the relationship between the market and political power. More than half a century ago, Karl Polanyi described capitalist development as an interplay between a functionally necessitated opening of society followed in each case by an integrative closure at a higher level. Since the beginning of the modern period, expanding markets and communications networks had an explosive force, with individualising and liberating impacts on individual citizens; but each such opening was followed by a reorganisation of the old relations of solidarity within an expanded institutional framework. Time and again, a sufficient equilibrium between the market and politics was achieved to ensure that the network of social relations between citizens of a political community was not damaged beyond repair. According to this rhythm, the current phase of financial-market-driven globalisation should also be followed by a strengthening not only of the European Union but of the international community. Today, we need institutions capable of acting on a global scale. We can see that the noble resolutions of the G20 summit in London on stock market oversight and regulation of the financial markets remain empty words without worldwide political co-ordination. The tentative measures undertaken by individual national governments in this area are condemned to failure for obvious reasons.

One thing should be said about Habermas’s last point on the shifts between the market and political power. Tellingly, he refers to Polanyi as the thinker who first described this tug-of-war relationship between the liberalizing forces of the economy and the protectionist counter-push made by society in order to protect certain values from the increasing process of commodification. But I’m afraid that Habermas paints this relationship in an entirely too optimistic light, which Polanyi certainly did not do in his 1944 book The Great Transformation.

Writing at the tail end of the war, Polanyi had a vantage point that allowed him to see the rise of market forces during the late 19th century age of imperialism, followed by the collapse of the global economy in 1929, and the subsequent rise of nationalism and fascism in Europe. As Polanyi argued, fascism was precisely the protectionist backlash against free market fundamentalism – hardly an “integrative closure at a higher level” as Habermas phrases it.  Even more, the League of Nations – the only transnational institution of those years approximately close to what Habermas calls for today – was undone precisely because of  the nationalist tensions created by the fall of the economy. Habermas rightly complains about the lack of historical understanding of these shifts between market and society. The problem is that his own recounting of that history as told by Polanyi does not hold up very well either.

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