Greece, Schengen, Nato – it's time to admit the European dream is over

For the longest time folks like Prof. Paul Krugman have spoken of the impossibility of solving the Greek crisis while maintaining the Euro. Of course lots of VSP's (Very Serious People) have poo-pooed all that stuff.

I guess the chickens are coming home to roost.

Please follow link to original - from The Guardian.
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Greece, Schengen, Nato – it's time to admit the European dream is over

As its leaders meet to grapple with the Greek crisis, the airwaves are full of existential debates about the future of the EU itself

To hear such a bold assertion from one of the two men was striking. But to hear it coming from the other was the sign of a political earthquake. Last month, during a rip-roaring lecture at the Hay Festival, the historian Niall Ferguson observed, almost as an aside, that our generation is "of course" living through the collapse of the European Union. Designed to provoke? Of course. That's Ferguson. It's the sort of remark that you dwell on, all the same.

Especially when, just the other day, I heard Sir Stephen Wall say something so similar. Here's what Wall said, at a seminar run by the Policy Network thinktank in London: "We have seen the high point of the European Union. With a bit of luck it will last our lifetime [Wall is 64]. But it's on the way out. After all, very few institutions last forever."

Ferguson is a Eurosceptic. His dismissive view of the EU is not a surprise. But Wall's view that the EU is on the way out marks the death of the old faith. For Wall was the most influential British pro-European diplomat of his time: our man in the negotiations of most of the EU treaties of the modern era; Tony Blair's longtime European policy adviser; and the author of a book on the EU that begins with the words: "I am convinced that wholehearted participation in the EU is strongly in Britain's national interest." First the Berlin Wall. Now Stephen Wall. European collapses don't come more dramatic.

Yet the remarkable thing about Wall's pessimism is that it no longer seems so remarkable. As EU leaders gathered in Brussels on Thursday to grapple with the Greek crisis, the airwaves were awash with existential debates not just about Greece or the eurozone but about the very future of the EU itself. Though most EU-watchers still talk of muddling through as the most likely policy response to Greek bankruptcy, it is a muddling without momentum, direction or real agreement, let alone enthusiasm. David Marquand, lifelong pro-European social democrat, author of a new lament on Europe, parodies Lenin by characterising current policy as "one step forward, three steps back".

It is not hard to see why this tone has now captured the European debate. The Greek crisis has vindicated those who said the country should never have been allowed to join monetary union. That may be blood under the bridge now; but the debt crisis exposes something that would have been exposed at some time anyway – the failure of former German chancellor Helmut Kohl's generation of European leaders to back monetary union with the economic and political union without which the eurozone was always going to be vulnerable.

Any commentator who forecast victory for the AV referendum should not quote himself too proudly. Nevertheless, I wrote in 1997 that it was possible to imagine a Europe "in which the Treaty of Maastricht will come to be seen in some places (perhaps even in Germany itself) as the Treaty of Versailles came to be seen in inter-war Europe – as the source of the problem, not the answer to it. If the attempt to satisfy the convergence conditions, or the effort to keep within the single currency 'stability pact' is to cause, or even to appear to cause, the dismantling of the welfare and redistributive systems upon which millions of the poorest in Europe depend, then it could spark populist and nationalist backlashes in almost any state in the EU."

This view wasn't rocket science. Yet today, that dynamic is not just imaginable but happening. It is happening, moreover, not solely because of the sovereign debt crisis in Greece and the rest. The platonic Europe of which Jean Monnet and Jacques Delors dreamed, a Europe with unifying institutions of law and government, with a single demos and a single chair at the high counsels of the world, is retreating on several fronts.

The single currency is the most dramatic. But the collapse of the Schengen treaty on freedom of movement within the EU is almost as potent a sign, a response not just to the surges of migration triggered by the Arab spring, but also to national concerns about jobs and welfare in the recession. Meanwhile, Europe's failure to evolve an effective common security and foreign policy, highlighted in Nato over Libya as in the past in Afghanistan and Iraq, and excoriatingly exposed by the US defence secretary Robert Gates earlier this month, underscores not just a failure to progress, but in practice a further retreat from a meaningful common approach.

Whenever two or more consenting Europe-watchers gather together to discuss these things, it is never long before someone says that the only alternative to muddling through is a bold regenerative leap – a single tax regime, a unified banking system and, above all, a single federal system of law and government for what remains of the eurozone, just as Delors wanted a generation ago.

There will be such talk at Brussels this week. But it's not going to happen. Or at least it's not going to work. Times have changed. Delors' generation has gone from the scene. The nationalist right and the global bond markets have won. The internationalist social and Christian democrats have lost. The Europhiles who speak of such leaps remind me of nothing so much as the crazy American evangelicals who think these are the end times of the Earth and that a liberating act of rapture will save us from ourselves and our sins.

I say this as someone who wanted and wants the European project to succeed, who still believes that our collective interests lie in a single, though smaller, probably northern European federal state with an overarching, directly elected government where appropriate; a single currency; shared tax and social solidarity systems; common defence and security policies; and occupying a single seat at the world's summits. That Europe would get my vote. But it is not going to happen, nor is anything like it, even in my children's lifetimes.

The question facing Europeans is therefore this. Not to forge an ever closer union in which, for all the EU's successes, the word forge seems unhappily to be increasingly appropriate. But how to manage the now foreseeable breakup of the EU in a responsible and restrained way, preserving and strengthening such forms of co-operation as we can. The goal would be to minimise the dangers of war between states, ethnic conflict within them, and immiseration of the most defenceless: all more real dangers in the next generation than the last. But that, ironically, was why the EU was created in the first place