April « 2013 « Euro

Archiv: April 2013

On Axes and Party Politics: the End of Europe’s Predictability

30. April 2013, von Almut Möller, Comments (0)

In a commentary last year on the eve of the celebrations of the 50th anniversary of the Élysée Treaty I wondered to what extent the notion of ‘the Franco-German axis’ was still a useful framework to analyse politics in Europe. I argued that in the course of the euro crisis, economic and monetary policies in Europe have become an issue of political majorities along party families rather than of axes such as the Franco-German. Much was at stake in rescuing the euro, I argued, and political leaders travelling to European summits were forced to be increasingly responsive to their electorates—which I believed was good news for democracy. Forget about the Franco-German axis and embrace party politics as a sign of political maturity of the European Union.

I have been challenging myself on this point over the past months on various occasions and, what can I say, I am not at all convinced. As much as those small pockets of europeanised party strategists would like to see it, there is no real alignment of the European left yet, determined to jointly win back majorities to shape a ‘social Europe’ as the new eurozone is in the making. Neither is there a solid conservative bulwark led by the German chancellor to europeanise the notorious Swabian housewife. Rather, the strategies that governments embrace these days in navigating the crisis reflect a much wider repertoire. And while it seems that the old and rather predictable game of summits, axes and treaty reforms is over, the rules of the new game are yet to be written.

In the German context, Peer Steinbrück, the social democratic candidate for the 2013 general elections, is far from leading Europe’s socialists in the reconstruction of the eurozone. Indeed for tactical reasons he chose not to even try and challenge Angela Merkel in what has become her domaine réservé. Or might he be pulling the strings behind Hollande, and the French Left is doing the messy job for him now? (Trying to undermine Merkel from the outside is likely to have the opposite effect, but quite frankly I don’t believe in the existence of such witty tactics anyway). Martin Schulz, recently branded “an extension of Adenauer by social democratic means” with a whiff of respect by, of all papers, the conservative daily Frankfurter Allgemeine Zeitung is in his ambition to become the joint candidate of Europe’s social democrats for the next president of the European Commission, doing a much better job. However, Schulz has just disappointed those looking for order on the Paris angle by seconding Angela Merkel when she was personally accused by leading French socialists of dominating and ultimately destroying Europe.

I still stick to the observation that in the course of the crisis, European Union affairs have been politicised to an unprecedented degree. Party politics matter. But for those (including myself) who predicted that the rather predictable old order (‘the Franco-German axis’ ‘the net contributors versus the recipients’, ‘the Weimar Triangle’ etc.) would make way to a similarly predictable order formed along political colours and ideologies have been proven wrong.

The truth is: things have become utterly mazy and therefore rather unpredictable. Now it is for Europe’s great minds to make sense of the new rules of the European power game, of political colours and ideologies, of institutional quarrels (prominently featuring the Commission president these days), of reflexes of national pride, of the new power of domestic constraints, of old balance-of-power thinking, of the shadow of history returning, and of a longing for rationality that is expressed in Europe’s elites turning to scholarly knowledge (and, not surprisingly, failing to find answers). Welcome to the politics of unpredictability.

One thing is for sure: Those who hold the key to understanding the new game will be shaping and, ultimately, winning it.

Europe For Citizens

“This project has been funded with support from the European Commission. This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.”

Dijsselbloem or DijsselDoom – a Dutch Perspective

9. April 2013, von Adriaan Schout, Comments (0)

I already presented my reservations against the appointment of Dutch Minister of Finance, Jeroen Dijsselbloem (Labour Party) as President of the Eurogroup. The public outrage following the bankruptcy of the banking sector in Cyprus has raised new questions concerning his ‘presidency’ (for which in Dutch the more modest ‘chairmanship’ is used). My initial doubts concerned the question whether this prestigious position would be in the interest of the Netherlands – and I was bold enough to propose Olli Rehn as possible candidate for a permanent chair after his departure from the European Commission in 2014.

The Cypriot turbulence in March immediately tested Dijsselbloem’s ability as a chair. He had become minister of finance in the Netherlands only in November 2012 and his appointment was almost immediately followed by rumours about his candidacy as president of the Eurogroup. In that respect, the criticism of his lack of experience and authority during the Cyprus crisis came as no surprise. For his two rescue proposals for Cyprus the media treated him on nicknames such as “DieselBoom”, “DijsselDoom” and “EuroBaldrick” (borrowed from the series Blackadder) as well as on appeals for his resignation. The fierce debates he provoked centre on the question as to whether the deposit holders are really completely safe. ‘True’ EU believers – and bankers who long for stability – would have preferred a banking resolution including European deposit guarantees in order to prevent bank runs whereas EU sceptics wished for the dismantling of the euro. Moreover, as was to be expected, Dijsselbloem was scorned as a Dutch puppet of Germany and blamed for defending the Dutch position instead of being a neutral chair.

Yet, in view of political realities like the upcoming elections in Germany and the public reservations against saving zombie banks and eurozone countries, the decisions of the Eurogroup to dismantle the Cypriot banks and to bail in seem inevitable. Moreover, given the lack of money in any country, it is highly unlikely that former Eurogroup President Juncker would have been able to orchestrate a different outcome. Approximately € 3 trillion is needed to stabilise banks in the eurozone. It is simply impossible to avoid more haircuts. Still, Dijsselbloem’s presentation of the measures appeared cold and his alleged Dutch bluntness provoked comments like the one by Juncker that you sometimes have to lie as chairman of the Eurogroup – as if financial markets preferred unreliability instead of predictability.

Also, the role of the chairman of the Eurogroup seems to be widely overestimated, if one has a close look at the EU power structure. A lot of criticism on Dijsselbloem is politically naïve in view of the strong resistance against the Cyprus bail-out not only in Germany but also in countries such as France where EU Affairs Minister Moscovici talked about “casino banking” on Cyprus. It seems widely regarded as reasonable to bail-in bondholders and deposit owners – particularly in the absence of an effective European resolution mechanism.

Hence, Dijsselbloem seems to have withstood the criticism well so far. Yet, there are issues for which he could be criticised, which in some cases can be blamed on his lack of experience. First of all, he made himself more important than he really is by ̶ during the hearing before the European Parliament ̶ taking the blame for the bailing-in of savings below €100 000 in the first deal with the Cypriot government. Firstly, the chair (President of the Eurogroup) is not a decision maker but mainly a spokesman: it was the decision of the Eurogroup to bail in those savings. Secondly, he referred to the bail-in of Dutch bondholders. A chair should be as neutral as possible and avoid telling the world how good his native country is in dealing with a crisis. Particularly Dutch politicians should take care not to be too outspoken. Dijsselbloem’s presentation of the Netherlands as a role model fuelled the criticism that he was pursuing a national agenda. Thirdly, he talked in terms of “core” and “periphery countries” as well as “the north” and “the south” whereas a chair should avoid divisions at any cost (as he later seemed to have realised).

Even though these issues are mainly issues of style and nothing serious, the international press once again saw a reason to complain about Dutch bluntness and about pushing through the Northern austerity agenda. Similarly, when Dijsselbloem, as Dutch Minister of Finance, attacked the Commission’s request for an additional € 11.2 billion for the budget for 2013, a question basically unrelated to the euro crisis, this led to head lines such as ”Dijsselbloem, president of the Eurogroup, joining forces with the UK” (EurActiv 3 April 2013). This shows that it seems to be inevitable that the chair of the Eurogroup is not regarded as neutral but as a national politician.

If Cyprus can cause an existential euro crisis overnight, it is very likely that more and more serious crises are to be expected. Against this backdrop, complaints about Dutch bluntness, accusations of Dijsselbloem acting as a German puppet or being part of the British camp, are particularly unhelpful both for the EU and for the Netherlands. What the Eurogroup urgently needs is a professional chair!

Europe For Citizens

“This project has been funded with support from the European Commission. This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.”

Blog Authors

Adriaan SchoutAdriaan Schout

Dr Adriaan Schout is Deputy Director Research/Europe at Clingendael, Netherlands Institute of International relations. (read more...)

Alexandre AbreuAlexandre Abreu

Dr Alexandre Abreu is a 33-year-old Portuguese economist with a PhD from the University of London. Currently he is a lecturer in Development Economics at the Institute of Economics and Business Administration, Technical University of Lisbon, and a Researcher at the Centre for African and Development Studies of the same University.

Almut MöllerAlmut Möller

Almut Möller is a political analyst in European integration and European foreign policy. She is currently the head of the Alfred von Oppenheim Centre for European Policy Studies at the German Council on Foreign Relations (DGAP) in Berlin. (read more...)

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