Ensaio de Viriato Soromenho-Marques.
The “Future of the Welfare State” Project is a very positive contribution, allowed by the cooperation of a group of distinguished European Foundations, to shift the strictly financial disciplinary focus that since 2009 is prevailing both in political action and in the public debate on European issues. The triple approach provided by the three Working Groups (Economic, Social and Governance Aspects) helps to enrich the constellation of issues and public policies involved in the goal pursued by this Project. The aim of this paper, however, is to shade light on the more hidden and problematic features of the already long lasting European Union /Eurozone crisis. No positive outcome of our work in the realm of the Welfare State in Europe is to be expected, unless we fully understand the exceptionally threatening existential challenge the European coming together process is still facing. In this case the framework conditions of a persistent flawed monetary union design, if not profoundly amended, will remain as a clear and present danger to the prospect of a sustainable, prosperous and peaceful Europe in the decades to come. The content of this paper reflects only the views and opinions of the Author.
I. Where are we now?
In March 2000, a large and strong consensus was reached on the wording of what would be recorded in history as the Lisbon Agenda. The goal was to transform the EU on 2010 into “the most competitive and knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion” (“Conclusions of the Lisbon European Council”, 23-24 March 2000).
Fifteen years after the bold Lisbon promises, The EU as a whole and the Eurozone (EZ) in particular seem to have lost any kind of firmly believed common purpose of political destination. The international financial hurricane originated and declared in the USA in 2008, hit Europe with an overwhelming violence. By the end of 2014 the combined EZ GDP was still 1.5% inferior to its 2008 value. However, the greater decline is felt in the “social cohesion” dimension. Instead of convergence in the social dimension among the different EZ Member-States, the policies followed to tackle the financial and economic crisis intensified sharply the abyss between the surplus and the debtor countries within the EZ. In 2014, 9 countries (Estonia, Ireland, Greece, Spain, Cyprus, Malta, Portugal, Slovenia, and Slovakia) although representing less than a quarter of EZ labor force had to accommodate alone over 50% of the total EZ unemployment. In May 2015, the EU is still in jeopardy. Not only the financial and economic crisis is far from being solved (Greece is still struggling to stay in the EZ), but also new social and political fragmentary features are being added to it.
To non-European observers, especially to those coming from the business and investment sectors, the European Union today represents a growing danger, a kind of ticking clock bomb menacing to explode within the heart of the fragile fabric of global economy and the international system. Political wisdom seems completely absent from the vision and policies voiced by national governments and European political institutions. From inside the European crisis, we need to humbly accept how profoundly our leaders and public opinions apparently lack that profound connection between past, present and future that was experienced in the first decades of the post-war European integration process, from Jean Monnet and Robert Schuman to Konrad Adenauer or Altiero Spinelli. The crisis management style followed by contemporary leaders is extremely risky, because it lacks critical sense of memory as well as strategic vision for a common future deemed to be shared by the countries, peoples and citizens whose life is endangered by the erosive follow-up of a crisis without decisive answers.
II. About the Welfare State and its meanings within European thought and tradition
Is it possible to reverse the current dramatic European situation, or are we already beyond the tipping point that separates hope from destruction? Nobody can truly tell if the no-return point was already reached in the EZ/EU crisis. However, it is absolutely certain to assert that the presentation of a solid and sound social agenda, aimed both to help national policies reinvent themselves and to provide a shared European response to the huge social price that some EU and EZ countries are paying alone to the benefit of the general macroeconomic EU/EZ equilibrium, would be a positive factor, contributing to a possible hopeful outcome of the uncertain crisis we are trapped in.
There are several reasons in favour of a new European-wide social agenda:
- In spite of a triadic vision of the evolution of human rights, conveyed by a classical essay written by Thomas Humphrey Marshall, according to which a certain historical succession could be identified in the enlarging of human rights, from civic to political strata, and finally to the social and economic rights we usually acknowledge as part of the “Welfare State”, it is possible, however, to read economic and social rights as a common feature of European cultural and political traditions, independently of more or less liberal and democratic visions of the Government and its general tasks.
- In Hobbes, who always vindicated the need of a strong political sphere, the State should take legally binding responsibility for those unable to work and provide their own basic and vital needs. In 1651, Hobbes refused private charity proposing instead a positive public policy against poverty.
- In France social rights are also clearly expressed in the Bill of Rights of the second revolutionary Constitution, approved in 24 March 1793. They include, besides the support for those who are in danger of falling into the abyss of poverty, the government obligation to promote “the access of every citizen to instruction” and “public reason”.
- In Prussia there was also a strong emphasis in social rights, even before the full access of every citizen to civic and political participatory rights. We should not forget that the famous British Welfare Laws of July 1948 (the National Insurance Act, The National Assistance Act, and the National Service Act) were pioneered by similar bills enacted in Germany by Bismarck in the 1880s.
- Historically speaking, and contrary to the currently dominant mantra in the EU, there is no causal connection between economic crisis and the decline of the Welfare State. Inversely, many national Welfare bills and institutions were created precisely to fight against the social ravaging effects of economic downturn and Depression. That was the case for so diverse countries as Portugal (1933), the United States (1935), or Sweden and France (1936).
III. The Welfare State: The European scale that was forgotten during the EU/EZ building process
When we look backward to the EU and EZ building processes, departing from the precarious and fragile vessel where we are now embarked, it’s impossible not to underline the many mistakes that were made, in critical crossroads. Technically, the EU is a flawed proto-federal endeavour, paralysed by a crisis that was already contained in the seeds of its faulty structural design. In particular, the Eurozone is a unique experiment determined by sheer political voluntarism and the lack of basic political wisdom and prudence.
Indeed this perilous course of action, decided by President François Mitterrand and Canceler Helmut Kohl in 1990 – during the secret conversations that allowed the green light for the German reunification — gave birth to an ill prepared monetary union, in clear contrast both with the rational advice of theoretical research as against the lessons of history. Twenty years before, there has been already the Werner Plan for a monetary union to be established in a decade. Already in that stage, the wishful thinking prevailed against the reason and prudence. The criticism of Nicholas Kaldor regarding the Werner Plan could be used without any need of adaptation against the sad results of the EMU: “Someday the nations of Europe may be ready to merge their national identities and create a new European Union – the United States of Europe (…) This will involve the creation of a «full economic and monetary union». But it is a dangerous error to believe that monetary and economic union can precede a political union or that it will act (in the words of the Werner report) «as a leaven for the evolvement of a political union which in the long run it will in any case be unable to do without». For if the creation of a monetary union and Community control over national budgets generates pressures which lead to a breakdown of the whole system it will prevent the development of a political union, not promote it.”
In 1977 a new contribution was given to the preconditions needed for a truly economic and monetary union, by the team of nine experts who authored the MacDougall Report (from the name of its leader, Sir Donald MacDougall). The conclusions of the two volumes Report stated the enormous distance between the ambition and the real public finance infrastructure of the 9 countries Community. Three scenarios were presented, starting with a relatively modest “Pre-federal Integration” stage, which would require a common budget of 2-2.5% of the global GDO, going to a bold “Federal” stage, corresponding to a common public expenditure of 20-25% GDP. In the middle term there was the scenario of an “Early Stage of a Federation”, supported by 5-7% of the European GDP. Even in this case the authors underlined that “social and welfare services would nearly all remain at the national level”. In 1977 the EC expenditure was equivalent to 0.7% of the 9 countries GDP combined. In 2015, amidst the turmoil of the crisis, the EU expenditure corresponds to a mere 1% of the general GDP. 0.3% increase in 38 years! The Economic and Monetary Union is a truly “low cost” monetary union. No wonder that a safe landing for the crisis, if no fundamental shift is made, has the probability rate of a miracle.
To sum up:
- The creation of the Eurozone is a sheer example of political voluntarism. The historical experience of other monetary unions (being the lesson of failure probably more important than the lesson of success) was completely ignored. I this historic record that passed unnoticed we need to include the relatively recent collapsed trials of the Werner Plan (1970) and the Exchange Rate Mechanism (1992).
- In spite of multiple warnings coming from experts of several fields and disciplines, the EZ engineers, combined with the unbound ambition of some key political leaders, gave red light to embark in a societal experiment, neglecting fully both the the social dimension and the fundamental request of democratic legitimacy.
IV. Is the EU becoming a “many-headed monster”?
I feel that the best depiction of what is happening nowadays in Europe is given by the classical Thomas Hobbes distinction between two mythical biblical beasts, he used as political symbols for his understanding of the “state” as a “mortal god”. In 1651, during Cromwell’s rule, Hobbes published the Leviathan. It contained his vision of the ways to build a sound political order, drawing upon his vision of the natural equality of humans and the need of a “social compact” as source of the transition from “natural to civil state”. This compact was the path conducive to the end of “the war of all against all” and the dawn of a law abiding society, maintained together by the cohesive authority of a sovereign (“a man or a council”) whose powers derived entirely, by a kind of “power transfer” (translatio imperii), from the original compact between equal humans, wishing to overcome the permanent risk of violent death prevailing in the state of nature. We know well that the balance between security/safety and freedom, under the rule of the Leviathan, tended to discriminate positively the first over the second. Nevertheless, the guarantee of body and property, under Leviathan’s rule, was undoubtedly a strong progress in relation to the relentless fear and anguish prevailing in the state of nature. On the other hand, between 1666 and 1668, Hobbes wrote his Behemoth, about the long period of civil war that ravaged England from 1640 to 1660. Contrary to the Leviathan, a well ordered “mortal god” produced by human artifice and compromise, the Behemoth is described as a “many-headed monster”. The second great biblical gigantic beast was the symbol of a society divided by opposing interests and violent antagonistic passions. A society stripped of the idea of public welfare, destroyed by the clash of egoistic fractions. A society where the long-run perception of a better future for the whole community has been captured by the myopic sight of vested and sectorial actors, unable to see the global landscape, neither in space nor in time.
The dismal picture of a society that finds in the hubris of the Behemoth its totemic animal, matches unfortunately with accuracy the set of sombre events experienced by the European Union in the last four years. The shadow of discord and fragmentation is expanding all over Europe. The perilous divide within the Eurozone countries and the split between the EZ countries and the other EU Member-States that don’t have the euro as their currency are growing. The euro is far from being a driving force in the direction of unity. The existential uncertainty regarding the future prospects of the euro is setting apart the South from the North, the debtor countries from the creditor nations. Poverty is returning to many EU countries, where social welfare policies aren’t strong enough to diminish the social suffering caused by the severe impacts of an ongoing unsolved crisis.
The basic questions: “where is now the gravity centre of EU policies and powers, and what are the legal grounds from which those powers draw their actions?” can have only complicated and biased answers:
- The naïve answer would tell that the prevailing legal framework is the Treaty of Lisbon (2007), encompassing both the Treaty on the European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU).
- However, a candid perspective how political matters are being managed really in the field will tell us that the legal cornerstone of Europe today is the combination of two newly enforced intergovernmental compacts: The Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (commonly known as the “Fiscal Treaty”) and the Treaty Establishing the European Stability Mechanism. These two treaties, intimately connected, work together as a truly endless austerity bible for the ruling factions in Brussels, Berlin and Frankfurt. Since it is an intergovernmental Treaty it wasn’t submitted to any kind of participatory popular scrutiny.
- If we add to this process, the on-going intergovernmental process regarding the Banking Union we may correctly compare the current fragmented legal structure of the EU and EZ with the futile exercise of the Ptolemaic Astronomy, which tried to compensate its fundamental mistakes (the Earth isn’t at the centre of the solar system) with the multiplication of geometric spheres and other fancies, like the epicycles, equants or deferents.
The basic political question: “who governs today the European Union?” receives an even more bitter response:
- Indeed, today the European institutions are either stuck in their irrelevance, as is the case with the European Parliament, or were derailed from their original mission by sheer Machtpolitik.
- The European Commission unable to vindicate and protect the founding Treaties and the pristine spirit of the European building process has chosen, lest it grow irrelevant, to become the attack dog of the new de facto European powers.
- Today, the European Central Bank (ECB) is the most important European governing institution in the Eurozone, being at the same time the one most alienated from any kind of electoral scrutiny and accountability.
- And, finally, the rule of the game isn’t defined by the classical cooperative “community method”, but by the strong return to the rough manners of the old European balance of power, whose meaning today is the following: everybody may discuss issues for a while but, at the end of the day, it is up to the German government to take the final decision.
V. Wrong diagnosis, wrong therapy
There is a sad analogy between the current European turmoil and the First World War. Both historical phenomena may be deemed as structural shifts that found their birth in relatively minor triggering events. The murder of Prince Franz-Ferdinand in the Balkans, in the beginning of one of the most charming European summers ever recorded, seemed impossible to tear down the European political order built in the aftermath of the Napoleonic Wars. That order was first designed by Metternich, and reformed later in the century by Bismarck, who was wise enough to stabilise Europe after the consolidation of Germany as the key Western continental power. Germany rose from Prussia’s victories over Denmark (1864), Austria (1866) and France (1870-71) in the three military campaigns that ended up in the Versailles Room of Mirrors, where the new II German Reich was declared on the 18th January 1871, precisely in the 170th birth of the emergence of Prussia as a kingdom.
Similarly, in the current crisis, few understood the powerful and destructive forces that were set in motion with the disclosure of the forged Greek national public accounts, in the winter of 2009. Greece had a known record of unreliable ─ to be generous (or misleading) to be candid ─ economic and financial statistics. It hit the target deficit numbers with the support of international banks like the Goldman Sachs. Nevertheless, Greece represented a very small share of the total Eurozone GDP, and therefore it was hard to anticipate the tragic snowball effect that was about to be unleashed.
In both episodes ─ WW I and the current European crisis ─ the large and complex impacts of the events, have more to do with the profoundly lack of wisdom in the response to those small igniting events, than with the intrinsic harm they caused.
In July-August 1914, governments and rulers behaved in a rather unprofessional and intellectually lazy manner. Austria was unable to see the global picture while exercising its retaliatory hate towards Serbia. Germany, on the other hand, chose to abide by the Schlieffen Plan in an extremely rigid manner. In doing this it forgot the teachings of von Clausewitz, namely on the need of putting politics first, keeping political decision ahead of military strategies and tools. Finally, Great Britain, through its long standing hesitation and pusillanimity, gave the wrong signs both to allies (France) and future foes (Germany).
In 2010, the Greek problem turned into the “Eurozone sovereign debt crisis”, because the political answer increased the scope and gravity of the problem itself immensely. The German government of Mrs Merkel took the driver’s seat in the framing of the answer to the crisis. Unfortunately, the strength in the tone assumed by the political discourse contrasts strongly with the poor wisdom of the solutions imposed both on other EU and EZ Member-States, as well on European Institutions like the European Central Bank (ECB) and the European Commission (EC). During several months until May 2010, Germany refused to concur to a Greek rescue programme, always reminding the prohibition of monetary financing of public debt and the authority of the “no bail-out” clause (articles 123 and 125 of the TFEU).
In doing this, German and EU policy makers implemented an unprecedented policy shift: Eurozone member countries quickly moved from a Keynesian focus on demand expansion, towards an almost opposite crisis management “austeritism” strategy guided by the sole goal of fiscal discipline. This was inspired by a wrong theoretical framework, and stimulated by short-sighted policy perspectives. Consequently in the subsequent years the crisis spread all over the EZ, with growing intensity, and an extremely high social and economic cost.
The major mistakes made by the German government, the EC, the ECB and the IMF in the management of the EZ turmoil can be summarised as follows:
- To consider the excess of public spending as the driver of the Eurozone crisis is a typical confusion between causes and consequences. Indeed, if in the case of Greece we may identify an irresponsible budget policy, in Ireland the collapse of public finances was the result of the eagerness of bankers who forced the Irish State to the brink of default, in an effort to safeguard a financial system squandered by sheer speculation and mismanagement. Such effort, assumed solely by the Irish budget, prevented the systemic consequences of a financial meltdown of the Irish financial system that would affect the rest of Europe. In Portugal, expansionary budget policies pursued in 2009 according the EU economic recovery programme of 2008 brought the government as well companies and families to a debt trap once contagion by the Greek debt crisis took over the financial markets.
- The primary root of the Eurozone crisis lies in the core shortcomings of the ill designed EMU itself. Far from being a perfect monetary union, the Eurozone wasn’t equipped with institutions and procedures able to fight asymmetric shocks, like those that emerged in 2008 and afterwards.
- The EMU was ill-equipped, unfit one should say, to respond decisively to the crisis. The combination of its three elements failed the test of history. A single purpose central bank (the ECB was made with the only worry of fighting inflation), surrounded by a misguided code of fair conduct (the Growth and Stability Pact), and sustained by countries promising eternal good behaviour, proved to be a naïve and counterproductive expedient.
- The lack of leadership showed by five months of German hesitation regarding the Greek rescue programme (before May 2010) triggered the feeling within the financial markets that the Eurozone was unable to defend itself, given the dominion of narrow and egoistic national interest. The contagion in the bond market happened very quickly, affecting specially Portugal, Spain and Italy.
- The reason why the Eurozone didn’t collapse at the mercy of a credit crunch in 2011 or to a possible disruptive spread of government’s insolvency to Spain and Italy, in the summer of 2012, must be found both in the emergency rescue programs setup by the EU and the IMF and in the unconventional monetary policy measures taken by the ECB to respond to the sovereign debt crisis. Both the LTRO (2011), that gave access to three years loans to commercial banks, and the OMT promise of “unlimited” support to countries under siege in the bond market (2012), are good examples of decisions that, if taken before could have prevented many of the destructive consequences of austerity on which emergency rescue programs were based. Such programme could be less harmful if better mixed with unconventional monetary policy measures.
- The German government was never at the forefront of those unconventional measures that only bought more time to fight the crisis. Mrs Merkel understood the positive role of the OMT, but Jens Weidmann, the head of the Bundesbank is the permanent Mr “Nein”, regarding the LTRO (2011), the OMT (2012), the TLTRO (announced in June 2014 to be implemented until June 2016), or even the drop of interest rates that brought down the interest pressure in sovereign bond markets by the end of the summer 2014.
- Germany, however, is the only country in conditions to lead the EZ as whole in the road of economic, financial and political reform. If the German government stubbornly keeps its stance regarding the delayed and urgently needed reforms of the EU, the EZ will be condemned to fragmentation, and the EU project will also suffer a probable mortal blow.
VI. The European choice: Is there a bridge between federalism and collapse?
In his Memoirs, Jean Monnet offered many wise and acute reflections about the tortuous nature of European political culture. He believed that, in spite of the two world wars coinciding with great part of his adult and active life, the Europeans would end up finding the narrow path towards a truly federal union. However, he didn’t believe that the union would arrive linked to the name of an exceptional man (or an outstanding lady we may add…), but to the sheer and pressing might of “necessity” (nécessité). We will see, in the coming months and years, if the prophecy of Monnet will converge with reality, or if, on the contrary, will end up becoming another form, although with a sombre lucidity, of delusion about a positive outcome to Europe’s destiny.
We may make no mistakes. After five years of lost time and badly designed “solutions”, not only the Eurozone but also the European Union’s project still stands on the brink of an abyss. The German government’s leadership, accepted by every country and institution in Europe, is showing itself unable to meet the basic requirements to build a true response to the crisis. Germany refuses to understand that the federal design of its own Grundgesetz is a good receipt for the political path the Eurozone and the majority of the other EU countries should follow. Insisting in the “nationalisation” of federalism, Berlin will end up being caught in its own trap. Hegemony, the capacity of having always the last and decisive word in a decision process involving 28 countries and 501 million Europeans, is a huge responsibility. There is still time to shift the course, to share power with partners, to ask the contribution of other schools of thought. Germany’s power is more than enough to destroy the EU, but isn’t enough to save itself from the turmoil that will ravage the entire continent if the unwise and cruel austerity policy is pushed further to the point of no return.
Canceler Merkel is right when she repeats that fixing the European Union and the Eurozone malaise will take a long time. That’s why Berlin’s continuous refusal to put its might on the side of the political reform needed to avoid disaster is so completely outrageous. The remedies used to cure the European illness proved already that we’re only able to alleviate symptoms, but unfit to tackle the real causes of the illness. Going further down the one way road of austerity will bring a dwindling Europe to an irreversible collapse.
For the moment not one of the major European problems was solved but merely postponed. Even under an egoistic and morally feeble benefit-cost analysis perspective, the situation on the Old Continent is becoming a game in which all the players (Member States and citizens), in the end, will lose:
- There is still an imperfect EMU: there is no political union, no economic government and no true fiscal support for European wide policies.
- In spite of the bold steps of the ECB (LTRO, OMT, the radical cut in interest rates in September 2014, the 2015 QE in the area of public debt), that allowed the Eurozone to survive from 2011 to 2015, the growing financial and political fragmentation of the Eurozone increases and the double risk of public debt default, or of a new sudden disarray in a fragile bank system, is still looming.
- The asymmetry between surplus countries and deficit nations is far from being tackled. This results in mounting figures mirroring the spread of unemployment and naked poverty.
- Greece is now more than ever on the verge of abyss. The fall of Athens will start something similar to what is called “singularity in Astrophysics. An event of unforeseeable consequences.
- The crisis is conducive to the current process towards transformation of the EU promise of peace, prosperity and democracy in the political and brief nightmare of the EU as a political Behemoth. The violence of intrusive fiscal powers, unchecked by parliaments, is a toxic ingredient in the popular resentment against not only the national governments but also the European institutions and the idea of a shared European destiny.
I believe there is still a window of opportunity to draw a new strategy that could save Europe from the huge pains and uncertainties of a new European tragedy.
The path towards an EU, rescued from its self-inflicted hardships, has to combine small steps, but also an ambitious and far-reaching strategic vision:
- The better use of the ECB, even before and without reform treaty, can bring relief to the countries submitted to the savage Diktat of austerity. The ECB, in combination with the ESM (provided with a bank license) and the EIB can provide liquidity both to states and to development programmes that are urgently needed to fight unemployment, and to promote sustainable development projects of broader European benefit.
- The relief in current austerity policy being followed all over Europe, could avoid the risk of default in debtor countries, allowing for levels of growth conducive to a sustained harmonisation of interest rates both in the bond market as well in the access to funding from all other sectors, especially sound SME in the periphery nations, which are being severely damaged by their geographical position.
- A true federal solution needs to be supported by common citizens, who are the effective source of legitimate power, according to the democratic and republican values that are enshrined in the political culture of every European country. It’s time to start a three to five years process of reviewing the Treaties, shifting towards a true European Constitution. Individual Europeans will be at the centre of the process, both as citizens of their national polity and as citizens of the new political European architecture, with a two-chamber parliament as well as a government, checked by popular and legal scrutiny.
- The lack of democratic institutions which would be able to provide citizens with tools for effective political participation in key decisions about the EU future, is creating a strong resentment against the EU project as a whole. A strong proof of that negative feeling is the electoral victories of anti-European parties, both in France and the United Kingdom in the 25 May 2014 polls for the European Parliament. The eagerness for democratic participation either will be the driving force for new impetus and legitimacy to feed the much needed wave of European revival, or, on the contrary, will nourish the trend to fragmentation. The results of the Scottish National Party in the 2015 UK parliamentary elections are a good demonstration that the 18 September 2014 referendum in Scotland is far from being the closing stage of fragmentation process that may repeated and replicated in Catalonia and other European regions. If Europe isn’t able to organise itself as a federal polity, it will be not able as well to return entirely to its previous stage of relatively stable Nation-States. Entropy, austerity, and political dismal will dismantle many of the current 28 member-States in the following years, if the crisis is not stopped.
- The historical lessons from the American experience (and other federal polities) clearly show that European integration and prosperity can only survive with a proper Bank Union (rather different from the minimalist ongoing process), with a certain degree of debt sharing, with a budgetary software that keep a sound balance between more and least developed regions and with a ECB prepared to perform a double mission. Exercising not only the control of prices, but acting also as a truly guardian of broader European economic stability and employment.
- If there is room for Europe as a political actor in the coming great world challenges and tasks, the EU needs to combine a green vision of a fair society and a sustainable economy, with a truly federal polity design. Federalism and green economics are twin sisters in the new social compact that will need to be signed and nourished by European to open hopeful avenues into the future.
VII. A bridge for hope: The proposals of the New Pact for Europe Project
The distance between the grim problems we are facing in Europe and the magnitude of the federal solutions I am proposing is so overwhelming that some type of mediation is urgently required. I consider that the contributions of the New Pact for Europe Project, developed by a large transnational consortium of European Foundations, may play a key role in finding a narrow path of hope that may help political actors, both in national as in European levels, to overcome its current paralysis and the lack of working and effective perspectives for the future.
The Proposals of the New Pact for Europe can be summarised in a threefold program that could be implemented with minor or none shifts in the Lisbon Treaty. One of the strategic political avenues suggested deals precisely with the need to provide welfare policies with a European scale and dimension.
Let’s see three the reform triangle suggested by the New Pact for Europe Project:
“  An Enabling Union should foster sustainable economic growth and job creation (…).
 A Supportive Union should enhance the EU ‘caring dimension’ to address concerns that the crisis has hit some countries and social groups exceptionally hard, fuelling a sense of social injustice within and between Member States. The potential measures foreseen under this pillar would send a clear signal to European citizens that efforts to reform national economies and social systems will always have to respect minimum social standards and will not lead to a ‘race to the bottom’. Instead, a social compact including social convergence criteria and more specific measures to support those suffering most from the crisis – including, for example, a complementary European unemployment scheme, an obligatory minimum support scheme or a European Mobility Fund – would flank efforts to promote Europe’s economic competitiveness.
 A Participatory Union should strengthen the toes between the EU and its citizens by increasing its democratic legitimacy (…)”.
The New Pact for Europe Project brings us once again the forgotten idea that the coming together of European nations and European citizens demands the collective return to the pristine ideals – that helped European in 1945 onwards to re-establish their societies after two great world wars initiated precisely in the Old Continent – of a triple agenda, able to combine economic sustainable development with social fairness based upon the acknowledgment of welfare basic entitlements for every person, unified by an enlarged political sphere of democratic legitimacy. The latter is the only source of truly European political identity. There will be no future for the EU and the EZ if we aren’t able to develop a true feeling of belonging to a plural European identity, built upon a citizenship that triggers the friendly and synergetic combination between national and European loyalties.
VIII. Final Remarks
Europe has reached a crossroads. Without a federal compact, sooner or later, the fragile and isolated European nations will fall into irrelevance. Not only poverty and inequality will spread throughout the continent but also the democratic institutions will be eroded in many countries and regions. The drive for hegemony from conservative and undemocratic forces in Russia, not balanced by any Western strong polity in the Continent, could expand well beyond Ukraine, by the sheer use of energy and raw materials as political weapons. Overwhelmed by its self-inflicted decadence, European nations will fail to respond timely to the challenges of climate change and environmental scarcity. In contrast, federalism will pull together the forces of nations and the creativity of individuals. A federal Europe will also save the market economy, abiding by the respect of human rights and the discipline of sustainable development, as a powerful tool promoting investment and ingenuity in the fight against global dangers as climate change or unregulated financial global markets. As Hobbes wrote many centuries ago, political organisation is always an artificial endeavour. Political hardware can be either a “mortal god”, helping individuals in their struggle for peace and happiness, or become a “many-headed monster”, bringing Europe back to a new dark age. Between a federal Leviathan and a deadly Behemoth it’s up to us, Europeans of 28 different countries, to decide. The time is running short for the right choice to be taken.
May 22, 2015
Viriato Soromenho-Marques (1957) teaches Political Philosophy, Philosophy of Nature and European Ideas in the Departments of Philosophy and European Studies of the University of Lisbon, where he is a Full Professor. Since 1978 he has been involved in the civic environmental movement in Portugal and Europe. He is member of the National Council on Environment and Sustainable Development and was Vice-Chair of the European Environmental and Sustainable Development Advisory Councils network (2001-2006). Viriato Soromenho-Marques was the scientific coordinator of the Gulbenkian Environment Programme (2007-2011) and was one of the twelve members of the High Level Group on Energy and Climate Change on invitation of the President of the European Commission (2007-2010). He is member of the Lisbon Academy of Sciences, Class of Humanities (Letras) as well as of the Navy Academy. In 1997 and 2006 he was awarded the “Grande Oficial da Ordem de Mérito” and the “Grande Oficial da Ordem do Infante D. Henrique” by the President of the Republic. He was the representative of public opinion in the Press Council (1985-1987). To many Portuguese mass media, particularly, the Jornal de Letras, Rádio Renascença, the public television network (RTP), Diário de Notícias, Visão, and the Portuguese and Brazilian Sections of the BBC he has been a regular contributor. He wrote over four hundred works on Philosophy, Environment and International Relations matters and was speaker in over one thousand conferences in Portugal and twenty three other countries.
1 – This paper is a updated and extended version of an essay I wrote in November 2013, by invitation of the Heinrich Böll Stiftung: “Are We on the Way to Creating a European Behemoth? A Portuguese Perspective”. Url: http://boell.eu/downloads/BUILDING_AN_EUROPEAN_BEHEMOTH.pdf. All opinions expressed in this paper are of the exclusive responsibility of the Author.
2 – The text was underlined by the author (VS-M).
3 – Vítor Bento, “Eurocrise: Uma Outra Perspeciva”, Observador, 8 de Fevereiro de 2015.
4 – T.H. Marshall, Citizenship and Social Class and other Essays, Cambridge, Cambridge University Press, 1950, pp.75-85.
5 – Thomas Hobbes, Leviathan , ed. Richard Tuck, Cambridge, Cambridge University Press, 1991, cap. 30, p.239.
6 – “Déclaration des Droits de l’Homme et du Citoyen de la Constitution de 24 Juin 1793”, Articles 21 and 22, Les Constitutions de la France depuis 1789, (pésentation par Jacques Godechot), Paris, Garnier-Flammarion, 1970, p.82.
7 – We may also identify some type of “social rights” in the Prussian Landrecht (1794) as also in the political and juridical thought of Immanuel Kant: Die Metaphysik der Sitten-Rechtslehre, Gesammelte Schriften, ed. Königliche Preussische Akademie der Wissenschaften, Berlin, 1902, vol. VI, S. 326.
8 – Robert Mundell, “A Theory of Optimum Currency Areas”, The American Economic Review, Volume 51, Issue 4 (Sep.,1961), 657-665.
9 – Nicholas Kaldor, ”The Dynamic Effects Of The Common Market”, first published in the New Statesman, 12 March 1971.
10 – The MacDougall Report on The Role of Public Finance in European Integration, Two volumes, Brussels, April 1977. URL: http://www.cvce.eu/content/publication/2012/5/31/91882415-8b25-4f01-b18c-4b6123a597f3/publishable_en.pdf.
11- Thomas Hobbes, Behemoth: The History of the Causes of the Civil Wars of England of the Counsels and Artifices by which they were carried on from the year 1640 to the year 1660, The English Works of Thomas Hobbes, ed. W. Molesworth, London, John Bohn, 1839-1845, vol. VI. See also: Leonel Ribeiro dos Santos, “Hobbes e as Metáforas do Estado”, Dinâmica do Pensar. Homenagem a O. Market, Lisboa, Departamento de Filosofia da FLUL, 1991, pp. 217-242.
12 – Red Cross, Think differently. Humanitarian impacts of the economic crisis in Europe, Geneva, 2013, on line at http://www.ifrc.org/PageFiles/134339/1260300-Economic%20crisis%20Report_EN_LR.pdf. Accessed on 13 October 2013; OXFAM, A Cautionary Tale. The true cost of austerity and inequality in Europe, Oxfam Briefing Paper, September 2013, on line at http://www.oxfam.org/sites/www.oxfam.org/files/bp174-cautionary-tale-austerity-inequality-europe-120913-summ-en.pdf. Accessed on 14 October 2013.
13 – About the fight of Jens Weidmann against both the Long-Term Refinancing Operation (LTRO) and the Outright Monetary Transactions (OMT)see my article: “Weidmann contra a Zona Euro”, Visão, 16 05 2013, p. 28. The President of the Bundesbank is not alone, as may be seen by the opposition of many prominent German economists to the 2014 cut in the ECB interest rate: Hans-Werner Sinn, “Why Draghi was Wrong to Cut Interest Rates”, Financial Times, 13 November 2013. Germany is also opposing the Summer 2014 initiatives of Mario Draghi against deflation speading all over the Eurozone, including Germany: Jörg Bibow, “German Savers Have it Really Tough”, Social Europe Journal, 05 09 2014: url: http://www.social-europe.eu/2014/09/german-savers-really-tough/.
14 – «Le fédérateur ne porterait pas le nom d’un homme, c’était toujours la même puissance abstraite, multiforme, qui s’impose à tous les hommes: la nécessité. », Jean Monnet, Mémoires , Paris, Fayard, 2002, p.495.
15 – Viriato Soromenho-Marques, « Who are We, The Europeans ? What Europeans Can Learn from the USA about Their Own Political Identity”, Ideas of/for Europe. An Interdisciplinary Approach to European Identity, Teresa Pinheiro et alia (eds.) Frankfurt am Main, Peter Lang, 2012, pp. 413-423; Viriato Soromenho-Marques, Portugal na Queda da Europa, Lisboa, Temas e Debates/Círculo de Leitores, 2014.
16 – Towards A New Pact for Europe, Second Report, October 2014, 46 pages. URL: www.newpactforeurope.eu.
17 – Towards A New Pact for Europe, Executive Summary from the Second Report, October 2014, pp. 2-3. URL: www.newpactforeurope.eu.