Context — July 16, 2015, 12:59 pm

A Deeply Integrated Europe

The euro and its discontents

From “How Germany Reconquered Europe,” published in the February 2014 issue of Harper’s Magazine. This excerpt from a discussion between five experts on European and American policy explores whether the euro will survive in Europe, given the region’s economic woes. The full article is free to read at Harpers.org through July 20. Subscribe to Harper’s Magazine for access to our entire 165-year archive.

Jeff Madrick authored Harper’s Anti-Economist column; James K. Galbraith is the Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, University of Texas, Austin; Ulrike Guérot is the Associate for Germany at the Open Society Initiative for Europe; John N. Gray is the Emeritus Professor of European Thought at the London School of Economics; Christian Lemke is the Max Weber Chair in German and European Studies at New York University; and Emmanuel Todd is a historian, social anthropologist, and political scientist at the National Institute of Demographic Studies, Paris.

[Lede]

From an interview with Emmanuel Todd in the July 10 issue of Le Soir. Todd is a historian, anthropologist, and demographer whose most recent book is Qui est Charlie? He participated in “How Germany Reconquered Europe,” which was published in the February 2014 issue of Harper’s Magazine. Translated from the French by Christopher Beha.

How would you analyze this Greek psychodrama?

Todd: It strikes me that the Europe we’re concerned with now is a Europe controlled by Germany and its Baltic and Polish satellites. Under Germany’s direction, Europe has become hierarchical, authoritarian, and “austeritarian.” The confrontation between [Greek Prime Minister Alexis] Tsipiras and [German Finance Minister Wolfgang] Schäuble has set that northern Europe against the south. Europe is in the process of splitting along those lines. Notwithstanding what their governments might say, I’d bet that the Italians, the Spanish, the Portuguese, and even the English have a lot of sympathy for Tsipras right now.

It’s more a north-south divide than a left-right divide?

Todd: Look at German Social Democrats: they’re taking a particularly hard line on the Greeks. Until very recently, all the talk among French socialists was: We are going to make another Europe, a Europe of the left. Thanks to our great relationship with the German Social-Democrats, there is another way. I would respond: No, it’s going to be even worse with them! The Social Democrats are strongest in the Protestant areas of Germany. They are even more northern, even more opposed to the “Catholic jokers” in the south. What has re-emerged, therefore, is not at all a left-right division; it is a cultural divide as old as Europe itself. We are seeing again what [20th century French historian] Fernand Braudel wrote about: the limits of the Roman Empire. Those countries truly influenced by Roman universalism are instinctively on the side of a rational Europe—that is, a Europe whose sensibility isn’t authoritarian and masochistic, one that understands that austerity is a suicide pact. On the other side, you have Lutheran Europe—which is the faith of two-thirds of Germany, two out of three Baltic states, and the Scandinavians. Poland is Catholic, but it was never part of the Roman Empire. So these are extraordinarily deep divisions making themselves felt.

One hardly hears about France in this north-south debate.

Todd: That’s the real question: is France going to act? France has two sides. There is the old collaborationist France, which is pro-Europe and pro-German. But it’s clear that most of France is on the side of the south. […] Up until now, France has played good cop to Germany’s bad cop. For [French president François] Hollande, now is the moment of truth. If he lets Greece fail, he enters the history books on the side of the socialists who voted Marshal Pétain into power. If the Greeks are massacred one way or another with France’s complicity, then we’ll know that Pétain’s France—the collaborationist France—has won.

jeff madrick: We gather for this discussion at an interesting time. Angela Merkel has just been comfortably reelected chancellor of Germany, which seems to strengthen the hand of austerity advocates there. Throughout the euro zone, trade is becoming less imbalanced. Productivity is rising in some countries, and a decline in labor costs is helping exports. All of this has led to a calming of financial markets. But the other side of this coin is extreme deprivation across the south of Europe, where unemployment remains extremely high and GDP is well below pre-crisis levels. Meanwhile, here in the United States, Janet Yellen is set to replace Ben Bernanke as chair of the Federal Reserve, and many observers wonder how long she can resist inflation hawks, who are demanding the “tapering” of the Fed’s quantitative-easing policy. Events in Europe could well influence her decision, and her decision will in turn surely affect economic conditions in Europe.

So this is the backdrop as we gather two Germans, a Frenchman, an Englishman, and an American to discuss the future of the euro zone. We hope to cover many topics today, but will begin with the most basic question: Will the euro — that is, the euro as a shared currency and the euro zone as a multinational political and economic entity — survive? Two questions naturally follow from this one: Should the euro survive, and if it doesn’t, what might take its place? Finally, we’ll talk a little bit about the consequences of the euro’s future for the United States. But first, Ulrike, if I might start with you: Will the euro survive?

ulrike guérot: The euro will certainly survive. In Germany, we are committed to the European Union not only for economic reasons — the economic benefits to German industry are admittedly great — but also for historical, geographic, and political reasons. Germany doesn’t want to go it alone. I think we all agree that the European Union has had flaws from its very beginning. A political union has lagged behind the economic one. To me, this is the real crisis. So the better question is: Under what conditions of dysfunction will the euro survive? There have been several attempts since the Maastricht Treaty of 1992 to reform the European Union’s institutional framework, but we need to recommit ourselves to fiscal and political integration, to making the euro more legitimate and also more democratic.

madrick: John, your thoughts on whether the euro will survive?

john n. gray: Well, we have to say over what period. If there has ever been a time when the euro zone could have disintegrated abruptly, that time is past. So if we’re talking about the next few years or perhaps the next decade, I agree with Ulrike that the euro will survive in a dysfunctional way. Over the longer term, it seems to me that the preconditions of functionality cannot be met. There isn’t going to be true political union in Europe, or anything resembling it. If the euro had been confined to a small number of similar countries, if it hadn’t expanded the way it did, you could have had a monetary union that evolved into a political union. Instead, the euro zone grew to include countries with radically different levels of economic development, radically different political systems, radically different histories. If you believe — and I agree with Ulrike on this point — that a real political union is a precondition of the euro’s long-term survival, then I don’t think it can survive.

The basic lesson of the past ten, twenty years — even of the past hundred years — is that the upper limit, not only of democracy but of political legitimacy, is the nation-state. I’m not a nationalist, I don’t particularly like the nation-state, but I think that’s simply a fact. Apart from a few relics like Canada, the United Kingdom, Belgium, and Spain, which are genuinely multinational polities (but also remnants of empire and monarchy), there are no genuinely multinational democracies in the world, and I don’t think there will be.

In the case of my own country, I don’t think the British political class or the majority of British voters have it in them to make any fundamental, radical decision. On current evidence, I don’t think they will commit to leaving the European Union. But I’m equally sure, or more sure, that any deeper commitment is politically impossible. The depth of public opposition is profound. Whatever deeper integration happens in Europe, we won’t take part.

madrick: Emmanuel?

emmanuel todd: The euro is a great mystery to me. From my perspective it’s clear that it cannot work — that is not the mystery. These are very different nations, not just in terms of economic practice but in terms of social anthropology. If you take Germany, for example, you have a very connected culture. France is much more individualistic. Many differences derive from this, starting with birthrate. To a demographer, it’s obvious that a nation producing 1.4 children per woman — Germany — and a nation producing two children per woman — France — are entirely different worlds. If the euro survives, we’ll have ever more unemployed young people in France, because through the euro we are imposing an economic system that doesn’t match our culture or demographics.

I predicted all this in 1992, so to me the economics of the thing are no longer interesting. Outside Germany, it’s pretty obvious that the euro is a complete failure. So the mystery I’m talking about is: Why does it go on? That is not an economic question; it’s an ideological question. I think France is much more responsible than Germany for this mess. The German dominance of Europe is possible only because of French acceptance. You must realize what the euro is from the point of view of French politicians, whether right wing or left wing. They had the idea, they imposed it on Germany, which accepted it and turned it into a very efficient, German economic instrument. For France, getting out of the euro would mean admitting that our entire political class was hapless. It would be the beginning of a social revolution.

Illustrations by Lincoln Agnew.

Illustrations by Lincoln Agnew

madrick: Maybe the confrontation ultimately is with France. But let’s leave it at that for now as I move on to James K. Galbraith.

james k. galbraith: Jeff, if I could, let me restate the question this way: Will the euro zone continue with its full complement of present members under the current policy regime indefinitely? And the answer I would offer is somewhere between “very unlikely” and “absolutely not.” Right now we are witnessing the destruction of some of the smaller countries of the European south. It’s very plain in Greece — a country that has never had strong public social institutions. Those it does have — the health system, the education system, the system of infrastructure, and the maintenance of basic public services — are being demolished. You can’t make a country attractive to foreign investment in a manner that will produce economic recovery if these social underpinnings are destroyed. Portugal, Ireland, Spain, and Italy are not as far down the road as Greece, but they are on the same general path.

So what will happen? One of two things. There may be a coherent political rebellion against the current direction of European policy. At the moment, I think the most promising source of such a rebellion is Syriza, the radical-left coalition in Greece, but there are other candidates. That rebellion would place the leadership of Europe in the position of having to decide whether they wished to continue the euro zone in its present form. If they did, policy would have to change. The second possibility is that the leadership of the center of Europe, specifically Chancellor Merkel’s government, may decide to change its practical approach to these questions, in defiance of what it has been saying up to now. Those to me are the only two possibilities. I quite agree with Emmanuel Todd that the French position here is a nullity. France has not been exercising any effective, coherent position. On the other hand—

todd: I’m ashamed, as a Frenchman.

galbraith: And on the other hand, one has to respect the fact that Germany has a chancellor who has proved herself a very successful political figure and therefore has created for herself the possibility of exercising real leadership in this matter. In order for her to do so, there first has to be a recognition that this crossroads is coming. At the moment, Europe is attempting to stabilize the bond yields and the finances of Portugal and Ireland while leaving Greece to fester as an untreated wound. This raises the question of whether it would be possible for a single small country to be effectively expelled from the euro zone as a result of political impasse. There’s a belief that it is possible, and I think that belief is profoundly dangerous. We have experience with what happens to large conglomerate political systems when small pieces of them leave. The Soviet Union did not survive the departure of the Baltic states. Yugoslavia did not survive the departure of Slovenia.

All right, the euro zone is obviously different from those two — but what would happen? You can cut off a toe, which is Cyprus — that already happened. But if you cut off your foot — which is Greece, roughly 2 percent of the total European economy — the markets will immediately focus on the next limb, the next most vulnerable part, which might be Portugal. When Portugal goes, people will start looking at Spain, and when Spain goes then they’re looking at Italy. The notion that you can partially dismantle what was created as a permanent and irrevocable currency union without eventually seeing the whole thing collapse strikes me as mistaken. It’s an all-or-nothing proposition.

madrick: Thank you. Let’s get some of Christiane’s views.

christiane lemke: Yes, the poor euro. I do believe that it will survive. But right now it’s like a swimmer halfway out from the shore. It hasn’t safely reached the other bank of the river, and it can’t really go back. It was a very risky project from the start.

As Emmanuel was saying earlier, the myth about the euro is that it exists to benefit Germany, that Germany created the euro to be more competitive, to increase exports, to dominate other countries. Historical records show that this is not the case. Germany gave up a very strong deutsche mark because the French — François Mitterrand — pushed the German government to prove its Europeanness. That project has been very successful: Germany defines itself as a European country, and there is no will to renationalization among the German people. It’s not just in Germany that this political project has been quite successful. If you look at countries from the former communist world — Poland is a great economic success, the Balkans are politically stable, Croatia has joined the European Union, and Serbia is an official candidate. So there is something going on in a broader context, in a political context, here that makes an integrated Europe very valuable to citizens.

As for the economic project, I do agree that there are fractures. There was an idea that if you created one currency, economies would converge. They have not converged, and they will not do so in the future without other policies in place. Austerity will not do the trick. We all see austerity policies pushing countries in southern Europe even further into crisis, but that is partly because the wrong programs are being cut. Military expenditures in Greece are 2.6 percent of GDP, higher than the European average, higher than in Britain or in China. Start there. Don’t start with infrastructure programs or social programs for the poor and the middle class.

At this point, the euro stands for a deeply integrated Europe. The costs of dismantling the euro zone, or of allowing single countries to exit, would be immensely high. To reintroduce the French franc or the deutsche mark, the costs would be tremendous, and the global economy won’t wait. These economies are closely intertwined, not just in terms of trade but in terms of production. Over the past ten, fifteen years, there have been many Franco-German projects—

galbraith: This is no longer true.

lemke: — to take this apart—

todd: You’re talking about the past.

lemke: If you look at trade-balance figures, France remains the major export country for Germany, and vice versa. The state of both economies is such that we do need the euro to be competitive in the world market.

guérot: Since you mention the world market, and since we’re talking for an American magazine, let me just suggest another reason the euro will survive, which is that there are too many actors — especially in U.S. markets — who want it to survive. Nobody on Wall Street wants the euro to break apart. Nor do the Chinese. So that’s a good reason to assume it will survive.

 Read the full article here.

Share
Single Page

More from Emmanuel Todd:

Context July 10, 2015, 10:15 am

How Germany Reconquered Europe

The euro and its discontents

From the February 2014 issue

How Germany Reconquered Europe

The euro and its discontents

Get access to 169 years of
Harper’s for only $23.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

February 2020

Trumpism After Trump

= Subscribers only.
Sign in here.
Subscribe here.

“My Gang Is Jesus”

= Subscribers only.
Sign in here.
Subscribe here.

The Cancer Chair

= Subscribers only.
Sign in here.
Subscribe here.

The Birds

= Subscribers only.
Sign in here.
Subscribe here.

The Skinning Tree

= Subscribers only.
Sign in here.
Subscribe here.

The Interpretation of Dreams

= Subscribers only.
Sign in here.
Subscribe here.

Dearest Lizzie

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
Trumpism After Trump·

= Subscribers only.
Sign in here.
Subscribe here.

The city was not beautiful; no one made that claim for it. At the height of summer, people in suits, shellacked by the sun, moved like harassed insects to avoid the concentrated light. There was a civil war–like fracture in America—the president had said so—but little of it showed in the capital. Everyone was polite and smooth in their exchanges. The corridor between Dupont Circle and Georgetown was like the dream of Yugoslav planners: long blocks of uniform earth-toned buildings that made the classical edifices of the Hill seem the residue of ancestors straining for pedigree. Bunting, starched and perfectly ruffled in red-white-and-blue fans, hung everywhere—from air conditioners, from gutters, from statues of dead revolutionaries. Coming from Berlin, where the manual laborers are white, I felt as though I was entering the heart of a caste civilization. Untouchables in hard hats drilled into sidewalks, carried pylons, and ate lunch from metal boxes, while waiters in restaurants complimented old respectable bobbing heads on how well they were progressing with their rib eyes and iceberg wedges.

I had come to Washington to witness either the birth of an ideology or what may turn out to be the passing of a kidney stone through the Republican Party. There was a new movement afoot: National Conservatives, they called themselves, and they were gathering here, at the Ritz-Carlton, at 22nd Street and M. Disparate tribes had posted up for the potlatch: reformacons, blood-and-soilers, curious liberal nationalists, “Austrians,” repentant neocons, evangelical Christians, corporate raiders, cattle ranchers, Silicon Valley dissidents, Buckleyites, Straussians, Orthodox Jews, Catholics, Mormons, Tories, dark-web spiders, tradcons, Lone Conservatives, Fed-Socs, Young Republicans, Reaganites in amber. Most straddled more than one category.

Article
The Cancer Chair·

= Subscribers only.
Sign in here.
Subscribe here.

The second-worst thing about cancer chairs is that they are attached to televisions. Someone somewhere is always at war with silence. It’s impossible to read, so I answer email, or watch some cop drama on my computer, or, if it seems unavoidable, explore the lives of my nurses. A trip to Cozumel with old girlfriends, a costume party with political overtones, an advanced degree on the internet: they’re all the same, these lives, which is to say that the nurses tell me nothing, perhaps because amid the din and pain it’s impossible to say anything of substance, or perhaps because they know that nothing is precisely what we both expect. It’s the very currency of the place. Perhaps they are being excruciatingly candid.

There is a cancer camaraderie I’ve never felt. That I find inimical, in fact. Along with the official optimism that percolates out of pamphlets, the milestone celebrations that seem aimed at children, the lemonade people squeeze out of their tumors. My stoniness has not always served me well. Among the cancer staff, there is special affection for the jocular sufferer, the one who makes light of lousy bowel movements and extols the spiritual tonic of neuropathy. And why not? Spend your waking life in hell, and you too might cherish the soul who’d learned to praise the flames. I can’t do it. I’m not chipper by nature, and just hearing the word cancer makes me feel like I’m wearing a welder’s mask.

Article
“My Gang Is Jesus”·

= Subscribers only.
Sign in here.
Subscribe here.

When Demétrio Martins was ready to preach, he pushed a joystick that angled the seat of his wheelchair forward, slowly lifting him to a standing position. Restraints held his body upright. His atrophied right arm lay on an armrest, and with his left hand, he put a microphone to his lips. “Proverbs, chapter fourteen, verse twelve,” he said. “ ‘There is a way which seems right to a man, but its end is . . .’ ”

The congregation finished: “ ‘Death.’ ”

The Assembly of God True Grapevine was little more than a fluorescent-lit room wedged between a bar and an empty lot in Jacaré, a poor neighborhood on Rio de Janeiro’s north side. A few dozen people sat in the rows of plastic lawn chairs that served as pews, while shuddering wall fans circulated hot air. The congregation was largely female; of the few men in attendance, most wore collared shirts and old leather shoes. Now and then, Martins veered from Portuguese into celestial tongues. People rose from their seats, thrust their hands into the air, and shouted, “Hallelujah!”

Article
The Birds·

= Subscribers only.
Sign in here.
Subscribe here.

On December 7, 2016, a drone departed from an Amazon warehouse in the United Kingdom, ascended to an altitude of four hundred feet, and flew to a nearby farm. There it glided down to the front lawn and released from its clutches a small box containing an Amazon streaming device and a bag of popcorn. This was the first successful flight of Prime Air, Amazon’s drone delivery program. If instituted as a regular service, it would slash the costs of “last-mile delivery,” the shortest and most expensive leg of a package’s journey from warehouse to doorstep. Drones don’t get into fender benders, don’t hit rush-hour traffic, and don’t need humans to accompany them, all of which, Amazon says, could enable it to offer thirty-minute delivery for up to 90 percent of domestic shipments while also reducing carbon emissions. After years of testing, Amazon wrote to the Federal Aviation Administration last summer to ask for permission to conduct limited commercial deliveries with its drones, attaching this diagram to show how the system would work. (Amazon insisted that we note that the diagram is not to scale.) Amazon is not the only company working toward such an automated future—­UPS, FedEx, Uber, and Google’s parent company, Alphabet, have similar programs—­but its plans offer the most detailed vision of what seems to be an impending reality, one in which parce­l-toting drones are a constant presence in the sky, doing much more than just delivering popcorn.

Article
The Skinning Tree·

= Subscribers only.
Sign in here.
Subscribe here.

Every year in Lusk, Wyoming, during the second week of July, locals gather to reenact a day in 1849 when members of a nearby band of Sioux are said to have skinned a white man alive. None of the actors are Native American. The white participants dress up like Indians and redden their skin with body paint made from iron ore.

The town prepares all year, and the performance, The Legend of Rawhide, has a cast and crew of hundreds, almost all local volunteers, including elementary school children. There are six generations of Rawhide actors in one family; three or four generations seems to be the average. The show is performed twice, on Friday and Saturday night.

The plot is based on an event that, as local legend has it, occurred fifteen miles south of Lusk, in Rawhide Buttes. It goes like this: Clyde Pickett is traveling with a wagon train to California. He tells the other Pioneers: “The only good Injun’s a dead Injun.” Clyde loves Kate Farley, and to impress her, he shoots the first Indian he sees, who happens to be an Indian Princess. The Indians approach the Pioneers and ask that the murderer give himself up. Clyde won’t admit he did it. The Indians attack the wagon train and, eventually, Clyde surrenders. The Indians tie Clyde to the Skinning Tree and flay him alive. Later, Kate retrieves her dead lover’s body and the wagon train continues west.

Cost of renting a giant panda from the Chinese government, per day:

$1,500

A recent earthquake in Chile was found to have shifted the city of Concepción ten feet to the west, shortened Earth’s days by 1.26 microseconds, and shifted the planet’s axis by nearly three inches.

In response to a major volcanic eruption, President Rodrigo Duterte of the Philippines vowed he would “eat that ashfall. I’m even going to pee on Taal, that goddamned volcano.”

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Jesus Plus Nothing

= Subscribers only.
Sign in here.
Subscribe here.

By

At Ivanwald, men learn to be leaders by loving their leaders. “They’re so busy loving us,” a brother once explained to me, “but who’s loving them?” We were. The brothers each paid $400 per month for room and board, but we were also the caretakers of The Cedars, cleaning its gutters, mowing its lawns, whacking weeds and blowing leaves and sanding. And we were called to serve on Tuesday mornings, when The Cedars hosted a regular prayer breakfast typically presided over by Ed Meese, the former attorney general. Each week the breakfast brought together a rotating group of ambassadors, businessmen, and American politicians. Three of Ivanwald’s brothers also attended, wearing crisp shirts starched just for the occasion; one would sit at the table while the other two poured coffee. 

Subscribe Today