The financial-cum- sovereign-debt crisis in the euro zone and the emergence of the troika have led to the perception that Europe is failing to deliver. There is no narrative beyond cuts, bailouts and fiscal austerity. Unemployment in the euro zone is at an all-time high. Growth is stagnant. In some countries such as Spain and Italy, youth unemployment has reached a staggering 50 per cent.
There is a growing divergence between the economic and educational performance of northern and southern economies. New cross-national tensions are emerging. Europe is becoming increasingly politicised.
This is unsurprising. Whole rafts of policy reforms and institutions have been created that directly affect domestic budgets. These include the European Stability Mechanism (ESM), the fiscal compact, the European semester; the two-pack, the six-pack, not to mention the outright monetary transactions of the European Central Bank, and proposals for a banking union.
These reforms may be necessary to enhance the strategic capacity of the union to deal with the crisis. But they also imply transferring more sovereignty to Europe than was ever previously imagined.
The policy choices faced by national governments are becoming increasingly narrow. This weakens and undermines the importance
of electoral competition. These policy reforms affect taxpayer resources, which makes them highly-salient political decisions.
But perhaps more importantly, most of the post-crisis policy reforms have taken place outside the EU treaties. They occurred through intergovernmental euro zone summits. This means they have weak formal legislative legitimacy. The outcome is that they give ultimate priority to the interests of bigger and more powerful states.
The commission is increasingly relegated to the sidelines. In Germany, there is growing concern with the ECB’s enhanced authority.
If this were not enough, the EU put pressure on directly elected governments in Italy and Greece to be replaced by technocratic administrations. National executives are being increasingly empowered at the expense of parliament. This reduces the influence of political parties and local governance structures, not to mention civil society organisations, in shaping policy choices. It gives priority to market confidence over citizens. Populist and Eurosceptic parties are on the rise, and look set to make significant gains in the European parliamentary elections.
Even before the euro zone crisis there was a hotly-disputed debate over the democratic legitimacy of the EU.
Many voters believe the EU was taking sovereignty away from directly-elected governments to unelected technocrats in the European Commission and the ECB. These were then blamed for directly imposing either a neoliberal or social market agenda.
Others argued this was a democratic choice by elected governments, and reflected the preference of voters. Delegating decision-making to regulatory agents such as the ECB was a general trend in western societies. The EU, policymakers pointed out, has no capacity to interfere with domestic tax and spending priorities.
The raison d’être of the EU was to guarantee political stability and to improve the economic and employment performance of member states, through shared sovereignty and mutual recognition. The treaty of Rome, the single market and economic and monetary union were perceived to have achieved these objectives. Furthermore, even if there was a democratic deficit, it was assumed that this would be resolved by the Lisbon treaty. Not so.
The recent turbulence is reflected in Eurobarometer data. The percentage of citizens dissatisfied with how the EU works has grown substantially. Distrust in European institutions is at an all-time historic high. Citizens are losing trust in both the function and democratic nature of institutions. If history teaches us anything, this does not bode well for social cohesion or economic stability. It is not unreasonable to suggest therefore that European democracy is in crisis. It is increasingly perceived as being neither effective nor democratic.
The forthcoming European elections will probably be the most politicised in the history of European integration. Europe needs a new social contract to offer its citizens. This can only come about through political contestation and the forging of new social coalitions. A debate on these issues and a keynote address by President Michael D Higgins will be streamed live from a Dublin European Institute symposium and relaunch in Dublin today (www.europedebate.ie).
This article originally appeared as an open-ed in the Irish Times.