Andrei Markovits: Eurozone Breakup Would Set European Project Back 100 Years

Andrei Markovits is a professor of Comparative Politics and German Studies at the University of Michigan. Dr. Markovits has published multiple books and is an expert on the German political system and culture. We ask him for his opinion on the prospects of the dissolution of the eurozone and the resulting consequences such an event may have on the broader European community. On the great hope of the European Union:

I am a very attentive student of European history. I was born a few years after arguably the worst conflagration in the history of humanity. I am a child of Holocaust survivors, and in that context, what the European [community has accomplished]--starting with the EDC, the treaty of Rome, and what ultimately this has lead to--is nothing short of miraculous. Look at not even the long run, but the last century--what I would call the second 30-year European war (WWI and WWII obviously being very related). Just travel to the north of France; look at the battlefields, the millions killed. So, in that context, the fact that today war between Germany and France is totally unthinkable--if I were to say this to a young German or Frenchman they would think I was deranged. It's like saying a war between Michigan and Ontario--absurd! But it wasn't absurd, and that's all the EU. I have my major criticisms about some aspects of the European Union and the euro and so on, but in the larger picture, this is amazing. Moreover, its also the only state-building process (because that is what this ultimately is) that has literally proceeded without a single shot fired. Last I looked, it wasn't the EU armies that invaded Romania or Estonia. Basically, countries were dying to join. It has problems, but in this larger context, I cannot see how one would have anything negative to say about the European project (I would like to differentiate that it is not so much about the EU). The EU has many problems. One of them is, of course, that it is not democratic. It is an elite-run Enterprise. Virtually all decisions--starting with the Treaty of Rome--have been decided by elites. I think this democracy deficit is a big issue and one of the reasons why "the people" are becoming more and more disillusioned. I would see that as the EU's main problem--that it is not a democratic entity, that it's basically the eurocrats running things in a technocratic way. There is no affect that people have for this European project. No one goes ga-ga over the European flag; people's hearts don't beat faster. But that is ok. Who is to say that hundreds of years of identities should be overcome in five or six decades?

Do you see a connection between the eurozone's political problems and it's fiscal problems?

Yes--not directly, but I do. The euro, per se, is really an outgrowth of a particular post-Berlin Wall constellation in the context of the Yugoslav wars, and it basically was a deal mainly propelled by the French to keep the Germans tied to Europe. The fear was that Germany might once again lose its mooring and "drift." That was the fear--a huge Germany adrift. The problem for Europe for hundreds of years was the fear of a Germanized Europe. This European project has created a Europeanized Germany. It is in that context that the Germans recognized Croatia and Slovenia and broke up the status quo. Also, harking back to the Nazis, because the Nazis recognized a different kind of Croatia. This lead to a kind of panic, which lead to the Maastricht treaty--an effort to capture and keep Germany tied to Europe through the euro. The euro was totally unpopular in Germany. The Germans were proud of two things: the national soccer team and the Deutschemark. No one wanted the euro. People were dreading it, fearing exactly part of what has happened now. These profligate, irresponsible southerners (there's a lot of cultural derision here), that the Germans will bear the burden of the southern, fiscally irresponsible folks. This will ruin the Deutschemark and ruin Germany's great pride of the hard currency. This didn't happen with the euro per se, and the big problem that emerged was that by creating just a common currency without the accompanying fiscal structures, you created a real straightjacket which at the time people didn't quite see--although some were warning of this. It's almost like the Continental Congress in the US, where the states were still independent and there still wasn't a real structure to balance the states. That is ultimtately the issue, really. The big debate now is what's next. In my view, my hope--because I love the European project--is that what will come out of this horrible crisis is some kind of next step in the state-building process. Not just a central bank, but a central taxation system--some form of budgetary arrangement. This is a really difficult gig and it might lead to centrifugality and some form of dissolution, which would set the project back for a 100 years. Or it can take the next leap forward, which is centralized fiscal systems. Bringing back the Drachma and breaking [the eurozone] up would be a terrible defeat and a real setback.

On how Germany is holding the political cards for the future of the European state:

The nineteenth century's trouble was a restless, huge German Giant torn between Western and Eastern Europe. The German question was this frightening albatross that lead to a lot of trouble. The great advance on the part of the German elites was to realize that the only way Europe can in fact become this peaceful--and ultimately prosperous, important entity--would be if Germany becomes "palatable." To put it differently, if Germany will not create fear, Its neighbors should never be afraid of it anymore. That, has not happened. In an odd way, by Germany's size, it in fact has now become the savior, and hence also the bully--the one that throws its weight around. This is a very thin and difficult road that they have to negotiate. I was very impressed by Merkel's speech to the CDU. She basically realizes this, and says we have to be leaders but not bullies. The bullies in this case would be defensive. In other words, a bully would say "screw Greece." Believe me, that is what many people in Germany want. In a weird way, being a bully is actually retreating or pulling up your solidarity. If that happens, this is a major setback. It seems to me that the German policy of empathy or solidarity--in my view, the European forward-looking way is to be generous. Let's be clear, what I find so bad about the intra-German debate is that the EU is portrayed as being terrible to the Germans. The euro has been anything but terrible to the Germans. You see this in the press; in the media. More and more Germans want to get out of this and it's scary. It's partially driven by the media, this sense of if we are solidaristic with the profligate Greeks and Italians--who we love to spend vacations with but don't want to support--we, the poor German taxpayer have to come up with this. Well, yes and no--the German taxpayer is also bailing out the German banks who were tumbling over each other to lend money to the Greeks. Unfortunately, when the chips are down, all debate becomes highly particularistic. You start to revert to your family, you revert to your interests without looking how in fact this might really harm you. I am a huge proponent of taking the next step to overcome this terrible situation. The elites have to sell this to their people and it comes back to the democracy issue. People in Europe know nothing about the EU, and if they do, it is this distant messing with your food or demanding standards you don't really understand. At least the Federal government in the US has a flag. People put their hands on their heart and adore America (not everyone, but in the general sense). Because the EU has lacked the voting, or the mobilization, people don't know who the EU politicians are. People don't know about parliaments or what this European entity does. Of course, I'm largely irrelevant--a professor of political science loving the EU. What is good is for Joe Public to have some sense that the EU is not just a drain, a drag. For example, it would be very important for Merkel to sell the German public that the EU has been good to Germany.

Do you think armed conflict could arise in a worst-case scenario in the eurozone?

That is too apocalyptic for me. I don't foresee how this would lead to armed conflict. Say Greece exits--do the EU armies conquer Greece? It takes more than that. There I am relatively optimistic. They are too integrated culturally. There are no more borders, and people travel and speak a general lingua franca--a combination of English and Facebook. Anything is possible, but no one wants other countries' lands. In Eastern Europe they do--many Hungarians they covet parts of Romania. But this doesn't exist in Western Europe--it is not an issue. So to go to war, this would take a real cultural breakdown, a revival of hatreds and coveting of natural resources. These things are just not on the agenda anymore. You don't want to take over the Ukraine because of its grain. Creditor austerity is in the cards, which could lead to social unrest--it has already--but this doesn't mean it would lead to an armed conflict between the Greeks and the rest of the Europeans. It is not a pretty picture--I am weary of imposed austerity--but this would not be countries A, B, and C versus countries D, E, and F. This could lead to population shifts--people are leaving Greece by the way--but this kind of ossification of this state that basically got you off the hook from any kind of productivity is no good. Ultimately it stymies young people who want to get away from this kind of feudalism--you only get a job if you know your cousin's girlfriend for example. This can't work in a modern economy. I understand that imposed austerity would lead to frustrations or revolts--or a mass movement or something--but not war.