One of the most common criticisms to the euro is that “there is no political project behind it.” Too afraid to transfer more sovereignty to super-national institutions, Eurozone members now enjoy a common currency but no common sense of belonging. Yet this lack of political foundations poses a fundamental problem. Euro states – the dysfunctional states of Southern Europe or the excessively functional Northern European countries – have become politically dependent from the euro. But it’s an ideology as much as it is a currency. It’s possible that a break-up of the Eurozone would result not only in a break-up of Europe (which we could survive) but in the fragmentation of some nation-states.
If this sounds excessive, consider the Balkans. Today, we consider the region a natural part of Europe. That’s no small achievement: While the possibility of a Yugoslavian fragmentation after the collapse of the Soviet Union had been considered by some, few had predicted that the separatist conflicts would last ten years, that they would lead to the creation of detention camps and ethnic massacres, and a bombing campaign by NATO. The mess was so severe that it inspired its own terminology: “Balkanization.” That clearly wasn’t in the forecasts.
The euro possesses a deep ideological value. It was conceived in the 1990s during an age of positivism and was based on the assumption that economic convergence – i.e. the creation of a monetary union – would lead to a convergence of cultures – i.e. political integration. Thus, the current euro crisis is not just a financial crisis, and any proposed solution that solely targets the financial aspects of this mess is likely to fail. In the worst case, it could further deteriorate the situation in Europe.
A clash of business cultures
This euro crisis is also a clash between European cultures. The coalition of the North, led by virtuous Germany, has concluded that the South is simply incapable of reforming, especially because its “immature democracies” are governed by coalitions that are seemingly incapable of instituting reforms. From the perspective of the North, populism and impossible promises are the qualities that Southerners look for in their politicians as they seek to find a way out of the current quagmire. Understandably, Germany’s Chancellor Angela Merkel is thinking twice before forcing Germans to open their purses to finance the Mediterranean circus. She is no lion tamer, and the crisis is a particularly wild beast.
The German fear is that the whole of Europe (or of the Eurozone) becomes like Italy, and especially like Southern Italy, which is among the poorest territories of the continent. Data on household poverty, youth unemployment, number of people with university degrees, and female participation in the workforce is lagging far behind the rest of the industrialized world. It’s a beautiful region that hasn’t yet been spoiled by real estate fury, but it also hasn’t developed for decades. Instead, Southern Italy has been syphoning off resources from the gentle Italian North, and at much higher rates than what Bavaria and Baden-Württemberg pay for the development of the former East Germany.
Some politicians and intellectuals from Southern Italy claim that is fair and just that Northern Italy pays, since Italy was unified some 150 years ago after the Northern state of Piedmont invaded the South and took the region by force. They claim that the eradication of Southern leadership in the wake of the Piedmont invasion is what led the South to chaos. Other interpretations claim that financial transfers from the North are actually the root of the problem, because they perpetuated a mentality of state dependence that made people “lazy” and criminal organization successful through a strategy of systematical seizing of public money.
Germany wants to avoid Southern Italy becoming Europe’s problem (although it already is, at least in part), and wants also to make sure that Italy, together with Spain, Portugal and Greece, does not transform into a big Southern European mess. It’s in Germany’s interest to prevent a political and intellectual bloc that keeps asking for money from the North. And we are with you, Angie. But the point is this: if the euro fails, it will fail because Germany has given up on its leadership role and has ceased to push for reforms in Europe.
Living in a world of fractured states
Ideologically, this means that fractional states will become the model for political organizing. If Berlin gives up on the rest of Europe, governments in Rome or Madrid will give up on the poor regions within their own countries. The Italian North, for example, would soon follow Germany’s example and North-South tensions within Italy would increase. The same agenda would probably be pursued on the Iberian Peninsula by independence movements, for example in (rich) Catalonia. Germany could also be affected: The rich states of the German South – Bavaria and Baden-Württemberg – increasingly complain about lazy artists and journalists in Berlin that suck up their budgetary surplus through a system of inter-state transfer payments.
In the end, this would be the European version of a fragmentation phenomenon that is already affecting other regions of the world: In the Middle East and in Africa, fragmentation has resulted in sectarian violence and bloodshed. Some states, like Sudan, have already split in two. Some, like Mali, are practically split. Some, like Libya, may soon fracture. Some, like Syria, will cease to exist as state-like entities altogether. At least one new state has been created from scratch – or almost created. It’s never quite certain what the UN means by Palestine’s status as a “non-member observer state.”
In Europe the split will not follow religious and ethnic fault lines but business cultures – that’s not a surprise in a post-capitalist world. If this seems improbable, just remember the Balkans.