Michele Marchi - 25/06/2012

     The summit held on 22nd June in Rome, between the leaders of the four main Euro area countries, was an odd one. Brought forward by a few hours because Merkel wanted to be at the Germany match at the European Football Championships in Poland and Ukraine, the Roman summit ended with unanimous satisfaction. We might even say: everyone’s happy, so in reality no one is at all! On the contrary, the summit has offered some interesting points and it can be called an important step in view of the decisive European Council meeting in Brussels on 28-29 June.

     The first element of a certain importance concerns the joint statement of the four leaders, which contains two stances that are anything but obvious.
Hollande, Merkel, Monti and Rajoy have solemnly stated that the Euro will not be abandoned and have taken a stance in favour of the allocation of a growth package worth 130 billion Euros (real money, already available to the EU that will be rapidly put into circulation and should contribute to the re-start of the Euro area). The second interesting point is that in the Roman summit the four leaders did not try to hide their divergences and points of view, even very wide ones.

     Monti and Merkel did not do so, with the Italian Prime Minister favourable to the purchase of public issues in a country whose yield spread is kept artificially high by the markets by the ECB, if this country has received the green light from the Commission on the stability plans, and the Chancellor who put forth her niet. Hollande and Merkel did not do so in regard to the contested economic union prior to the political union, the French stance opposed by Berlin. Why is this fat interesting? Because the clarity of the stances contributes to outlining several lines of development for Europe at a time when, even if it is on the edge of the precipice, the foundations are nonetheless being laid for a possible further step towards integration.

     The third element of importance is, however, precisely in regard to the complex situation. The financial markets are lurking in the shadows, the precipice is close and even revolutionary proposals like the project bonds, the opening of the services market and the transformation of the single currency into a union with common vigilance and guarantees, if too dilated in time will unlikely manage to prevent the unleashing of the “perfect storm.” In short, the situation is paradoxical and the Rome summit, if it has had a further merit, has indeed been that of displaying it.

     The European integration specialists often state that cyclically the process of construction draws new energy from the crisis situations. The current one would thus be the umpteenth re-start after a serious crisis, such as the common market after the EDC (European Defence Community) crisis, the new enlargements after a Gaullist decade or the single currency after a phase of “Euro-sclerosis.” These reflections, however, lose part of their meaning if they are not declined historically. In the current post-bipolar world dominated by global finance is there still time and room for a re-start, slow and elaborate, as occurred in the nineteen-fifties, in the early Seventies and the early Nineties?

     The impression is that the main national players, from Merkel to Hollande going via Monti, but the same can be said for those at the summits of the community institutions, from Barroso to Van Rompuy going via Mario Draghi, generally have good ideas and many good reasons when they present their points of view. Right now, however, we must pay attention to two inescapable factors. The first one concerns timing. There does not seem to be any time left. Even if a large number are ready to bet that after the “last resort” of the upcoming summit in Brussels, there will be a further “last chance,” in actual fact the money burnt by the markets, the credibility of the country systems and its wounds on the real economies have by now reached a point of no return.

     The time is over, more than the value of the decisions we need true and proper decisions and these must head in the direction of a triple acceleration: banking union, fiscal union and political union. The technicians have clarified this, it is down to the political leaders to offer its proper elaboration. The second is closely linked to the perception that the national public opinions have of the crisis. The recent survey commissioned by Il Corriere della Sera and by the French Journal du Dimanche, performed in the four chief countries of the Euro area (France, Germany, Greece and Spain), is indicative of a malaise and an underlying pessimism in regard to the rescue of Greece and the future of the single currency.

     Only the Italians (perhaps because they feel closer to the edge than the others) believe in the chances of rescuing Athens and defend its presence in the Euro area. The Germans and the French by now consider Greece destined to sacrifice. And yet, in such a gloomy scenario, three quarters of the interviewees in France, Italy and Spain and over 60% in Germany state they do not want to revert to their own national currency. Apart from the technical formulae and the financial recipes the leaders who next Thursday and Friday will meet in Brussels should have well in mind the fact that the single currency, one decade after its circulation, has become an important expression of identity at the community level.

     Without underestimating the errors made, that is having thought that once the currency has been created, the economy and politics would have come as though by default, it will be essential not to sacrifice what remains, without a doubt, the most revolutionary twentieth century project. Twelve years after the dawning of the twenty-first century the time has come for another leap forward. If not now, when?

Michele Marchi
(University of Bologna)