Social Europe: The Troubling Transformation Of The EU

However, there are two quite different ways of thinking about the Commission’s proposals. For Macron, they were part of a vision for a “Europe qui protege” in which there would be greater “solidarity” between citizens and member states. In the context of this vision, the new European Monetary Fund would be a kind of embryonic treasury for the eurozone. But many in Germany, including Wolfgang Schäuble, seem to support the same idea for entirely different reasons. They see it as a way to increase control over EU member states’ budgets and more strictly enforce the eurozone’s fiscal rules and thus increase European “competitiveness”. If that vision were to prevail, “more Europe” would mean “more Germany” – as many of the steps that have been taken in the last seven years since the euro crisis began have. [...]

It is as if the EU is in the process of being remade in the image of the IMF. It increasingly seems to be a vehicle for imposing market discipline on member states – something quite different from the project that the founding fathers had in mind and also quite different from how most “pro-Europeans” continue to imagine the EU. Indeed, it is striking that, in discussions about debt relief for crisis countries, the European Commission has often been even more unyielding than the IMF. As Luigi Zingales put it in July 2015: “If Europe is nothing but a bad version of the IMF, what is left of the European integration project?” The transformation of the ESM into a European Monetary Fund may be the final, logical step in this process of remaking the EU in the image of the IMF. [...]

In particular, Merkel clearly believes that, in order to be “competitive”, Europe needs to cut back on the generous welfare state for which it is known. She likes to say that Europe has 7 percent of the world’s population, 25 percent of its GDP and 50 percent of its social spending in order to suggest that “it cannot continue to be so generous.” This logic is behind the imposition of austerity on “crisis countries”. For example, former Greek Finance Minister Yannis Varoufakis says that, in their first meeting, Schäuble told him that “the ‘overgenerous’ European social model was no longer sustainable and had to be ditched” in order to make Europe “competitive”. This “competitive” Europe bears little resemblance to the one of the “pro-European” imagination with its emphasis on the “social market economy”.

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