George Papaconstantinou / Oct 2019
When in July 2012 Mario Draghi strolled into the Global Investment Conference in London to make some short introductory remarks, few expected that his speech would be seen years later as representing the pivotal moment in the Eurozone crisis. His remarks that “within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough” succeeded where many previous attempts at staving off the crisis had failed; they set off a huge global market rally and sent the spreads on government bonds tumbling. It was the turning point for the crisis and the start of a slow economic recovery process.
Fast forward from 2012 to today; despite the recovery – in its seventh consecutive year – and the lowest EU unemployment rate in 20 years, a “European malaise” is unmistakable. We may be “post-crisis” but the crisis has not really left us. Partly as a result of policies adopted during the last ten years, the economic gap between “core” and “periphery” in the EU has widened considerably. And despite some substantial overhaul work of the institutional infrastructure during the crisis years, we seem today ill-prepared to face the slowdown when it inevitably comes, and even more so the next crisis with its inevitably new characteristics.
In a broader context, the global forces at work – technology, AI, shifting trade and investment patterns – have exposed a Europe that is not only economically unprepared, but is also composed of nations that often prefer to retreat unto themselves rather than seek solutions which bolster the EU collective, its tools and policy space. The problem has long spilled from the economy to society and politics. Populists of different political shades have been on the rise, fanning the flames of nativism, urging a retreat unto the nation-state and “taking back control”; and in the public debate, fact-based policy solutions have been replaced by loud and easy – but wrong – prescriptions to complicated problems.
What is more, politics is stuck. After a flurry of reforms during the crisis and a surprising – if delayed – willingness to throw out established truths when faced with unprecedented situations that required out-of-the-box thinking, politicians across European countries seem to have lost their nerve. They are frozen by the fear of political cost, unable to come to the important decisions that will safeguard the future of post-crisis Europe. And the ultimate irony: this is despite the fact that Europeans as a whole are shown today in polls more attached to the common project as well as to its currency than ever before, while at the same time not knowing exactly where Europe should go from here.
This is where Draghi’s words come in. At the time he uttered them, it was not just swagger; he put the ECB’s formidable power behind the euro project in a way that innumerable European Councils before him had not managed to do. But he was also successful because before him, the EU machinery was at work, painstakingly putting in place the kind of policy tools – such as the backstops for financial support - which were missing at the crisis outset. It was not just voluntarism; the words were backed up by sound policies and solid institutional arrangements. They expressed a combination of planning, determination and boldness; but beyond that, an understanding that what had been built required to be defended - at all costs.
It is this kind of audacity which seems to elude political leaders today. It is an attitude which understands there is no inevitability in the way Europe will develop; its political direction will be shaped by our collective decisions. Safeguarding the role of Europe in a distinctly different new global environment in fact goes much beyond economic governance issues, deficits and debts, or competitiveness convergence: it needs to address issues of security, well-being and freedom; jobs, economic and social justice, but also participation and democracy, in a future with shared prosperity, security and representation for all in a community of values.
At the end of the day, the issue cannot simply be about EU institutional mechanics and policy tools, important as it is to get them right. It is about reinventing the language of political discourse and giving ownership of the EU project to a larger number of people at European, national and local level. It is about developing a “new narrative” that builds on the great achievements of the last half-century – peace, democracy, prosperity – and fashions a political project for the next 20 years to which Europeans can emotionally connect. It is about finding the words that convince and bind; and the policies that turn them into actions.