José M. de Areilza. Professor. IE Law School
14 October 2011
The Franco-German axis is no longer a feasible way to save Europe. The old continent needs more, namely an institution that can take the reins of all EU countries and lead them out of the crisis.
The second rescue package for Greece has not yet been finalised and there are increasing discrepancies about how it should be instigated. When analyzing the dangerous situation of the European Union, it is pointless to seek comfort in the mirage of the Franco-German tandem which no longer exists. Angela Merkel is running out of steam and has no authority over the three-party coalition which makes up her government. She is not keen on taking steps to secure a fiscal union which would underpin the euro in exchange for centralising new power in Brussels. It’s not so much a problem of the cost to Germany financially (the business elite are aware that the single currency is a huge business); it is rather a question of German identity, a lack of legal imagination when viewing democracy from a non-state standpoint.
The constitutionalisation of deficit limits is a positive step, but in order for it to work, it must be based on a dual agreement - both national and European, and cannot be presented as an imposition on the part of Berlin. Nicolas Sarkozy, who won the war in Libya, is committed to a Union made up of Eurozone countries where France can have maximum influence and institutions play a minor role. However, he does not provide an economic vision which will solve the problem of the euro, given that the tried and tested fiscal stimuli have now become the problem.
Angela Merkel and Nicolas Sarkozy are not the solution, nor can they be at this stage of integration. Too many decisions have been placed in their hands and in the hands of the European Council, the meeting of heads of government and state, when this is the very institution with the least technical capability, which becomes more distant by the day, and which is less accountable for its actions. The formula that has made the European construction work for sixty years comprises a blend of institutions and leadership. In this crisis, both these key ingredients are sorely lacking.