A new map of Europe
12 February 2010
This week in European politics will not be forgotten soon. For the first time ever, the EU's 27 member states have decided to extend a helping hand to one of their number in financial difficulty. The significance of the guarantees granted to Greece, which were announced at the extraordinary summit in Brussels on 11 February, cannot be understated. The fact that Germany, encouraged by France, has accepted to underwrite a debt stricken country, is the expression of paradigm shift in the management of the eurozone, which could herald enduring change in the EU.
This current emergency, which is likely to be one of many in an economic crisis that is not yet over, has marked the emergence of a geography of the EU. The markets, or more precisely some market players like the speculative funds that aim to undermine certain bond values, have become the de facto enemies of the European project. Right now their focus is on the weaker economies in the EU, but these economic players have demonstrated that they constitute an existential threat to stability everywhere in Europe. It is on this basis that the crisis has the potential to prompt a renewed drive to balance the creation of wealth and harmonise economic practices in Europe's 27 member states.
Having managed the economic life of the euro zone for years, notably through the setting of interest rates, the European Central Bank, which does not have a mandate to intervene in a situation like the current Greek malaise, has been forced to defer to the authority of Europe's member states. There are some problems that cannot be solved in Frankfurt. The same applies to the new European Commission, approved earlier this week, which played no significant role in the drafting of the rescue plan. As far as Brussels is concerned, the Greek crisis is a matter for the European Council.
Given that the United Kingdom remains outside the eurozone, London, both as a political capital and financial centre, has remained on the margins of discussions for decisions taken this week, which has reinforced the authority of the Paris-Berlin axis. It remains to be seen what Nicolas Sarkozy and Angela Merkel, who do not always see eye to eye, will make of their reinforced leading role.
The need for a common economic policy, which has long been postponed, is now more acute than ever. And there is plenty of evidence to suggest that an economic federation is beginning to take shape behind the borderless map of Europe's Schengen Area. In the wake of the snub constituted by the cancellation of Barack Obama's visit, the EU is embroiled in debate about the nature of its own future. In the bid to recover its prestige, it must take into account the new geography resulting from developments in the global economy, if it is to function correctly and reassert its authority in the arena of international affairs. Eric Maurice