While Europe faces the specter of overwhelming debt, another deficit lies at the heart of the inability to find a solution: a deficit of trust.
Europe’s citizens “have lost confidence and trust in their politicians and started to make their own contingency plans,” writes Andre Wilkens, the director of the Mercator Centre in Berlin, Germany, for openDemocracy.
Wilkens makes the point that “Europe has always been about trust,” and that this important resource that can’t be bought “is missing today” in Europe. Citizens, politicians, and markets are all lacking in trust and confidence that a solution to the euro zone’s problems can and will be found.
What is missing is “trust that we will master the crisis together, that the euro is safe, and that all euro zone countries will stick together,” Wilkens continues. “Confidence that the countries of Europe will work together in finding and using sustainable ways and means to stabilise Europe, rebuild prosperity, and thus create the basis for Europe to play a responsible role in the world.”
“Yet these sixty years have shown that Europe can do better,” he says.
And there are reasons to be hopeful that Europe will do so. “The combined public debt is lower than that of the United States and Japan,” he writes. “Inflation is low and under control. And on most governance indicators - such as functioning institutions, corruption and the rule of law - Europe is still leading by a long way.”
The real problem is that lack of trust is prohibiting a solution to the euro zone’s structural problems. With this in mind, Wilkens suggests that Europe focus on finding a “simple” solution, what he calls “a serious one-point plan.” This plan’s focus is “to recreate trust and confidence in European unity through joint action, honesty, reliability, fairness, and respect, and thus to initiate a positive self-fulfilling prophecy.”
“If we manage this, everything else will be possible,” he says. “But without confidence and the political will in European unity, even the technically best ten-point plans will be obsolete.”
He suggests that a symbolic statement would be important at this stage. “Why not give a joint statement before the European parliament? And why not do this while holding hands?” he says. “Historic times call for historic deeds – and symbols.”
And the positive vision that such a symbolic gesture of unity could provide could get Europe on the path back to trust and the prosperity it can bring.
Comments
I agree with Wilkens that Europe is at a crossroad. It needs that one-point plan, which is their Hamiltonian moment. This crisis is not just at a fundamental level but also a psychological one. It appears that more national solidarity is called for to reach social equilibrium and economic sustainability. But as many have suggested in books and articles of all kinds, there are political realities in Germany and in the peripheral countries that inhibited a Nash Equalibrum to take hold.
My suggestion is as follows: may the real Alexander Hamilton please stand up and say, "We are united via a one bond market."
By having a unified euro bond market we would not have the violent fluctuations in the currency exchange markets because this unified bond market would add legitimacy to a fiscal union in that region. The new Federal States of Europe would assume all European government debt and establish the need for balanced budgets at the State level. This new Federal States of Europe would also provide free flow of labor, commerce, social entitlements, and better infrastructural integration among States. At the present time the EU is a pseudo union with many obstacles of true integration.
In short, European nations need to stop thinking nation centric and begin to think federal centric.
The EU nations need to come to grips with the simple question: Are they European or not! If not, then they are constituted with a much different DNA than Americans.
Sincerely,
Paul Cottrell, BSc, MBA
Ph. D. Candidate at Walden University
Twitter: paulcottrell
YouTube: Paul Cottrell
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