Sovereignty in EU 'stolen' by financial markets
GERMAN PHILOSOPHER Jürgen Habermas has called for the creation of a EU political union with a “core currency area” to “win back at European level the sovereignty . . . stolen by financial markets”.
In an essay, Prof Habermas attacked as “one dimensional” German chancellor Angela Merkel’s diagnosis of the euro zone crisis, and warned that failure to regulate financial markets – even at European level – would reduce Europe to a “market-conformist facade democracy”.
“Recent developments suggest that the diagnosis and therapy of the government was too one dimensional from the start,” wrote Prof Habermas in the Frankfurter Allgemeine newspaper.
“The cause of the crisis cannot alone be traced back to national failures but to systemic problems that . . . demand a systemic answer.”
In the essay, co-written with philosopher Julian Nida-Rümelin and economist Peter Bofinger, Prof Habermas said that “headless, incrementalist” attempts to solve the crisis by national governments – without any real deepening of European institutions – had only contributed to the crisis momentum and exposed the “haunting parallel universe of investment banks and hedge funds beside the real universe of goods and services”. European citizens are feeling a “justified anger”, they wrote, “that anonymous market process have taken on a direct political dimension”.
The only hope of winning back public trust was to strengthen political influence over transnational market forces.
This in turn required measures to establish transnational fiscal, economic and social policy in Europe.
To map out a route to this goal, and explain its importance to citizens, they called for a new European constitutional convention. This would be a first step to a political union and a core European currency area, open to non-euro members such as Poland.
Such a construction would have to steer away from the idea of a European federal state which, they wrote, “overwhelms the readiness for solidarity among historically independent European peoples”.
Instead the convention would allow a broad debate about the benefits of European integration and the choices offered by a supranational EU democracy.
Failing to move in this direction would, they warned, bring about the end of the euro zone as we know it and mark Europe’s “farewell from world history”.
Italian prime minister Mario Monti has given a similar warning that a euro break-up would “destroy the basis for the European project”.
“Tensions in the euro zone in recent years already have elements of a psychological dissolution of Europe,” said Mr Monti to Der Spiegel magazine.
The Italian leader called for a “rapid solution” to high borrowing costs for Spain and Italy through the buy-up of bonds by the euro zone and European Central Bank.
Mr Monti agreed that a bailout application was a pre-condition to any bond-buying, something he said addressed German concerns that lower borrowing costs weakened the resolve for reform.