ou know what's in bigger trouble than Herman Cain's marriage? The global economy.
This may be the week that decides whether we stumble into — or avert — a second Great Depression. May I entice you to pay brief attention to a possible solution? Afterwards, we can quickly return to our regularly scheduled sex scandals.
On Monday, Polish Foreign Minister Radek Sikorski gave one of the most important speeches yet delivered on a way past the euro crisis. Sikorski happens to be a good friend of mine, but I'd think the speech important even if I could not pick him out of a police lineup.
The speech demands to be read and studied in full, but the plan has three main elements:
1) The European Central Bank would assume ultimate responsibility for providing every member state of the EU the liquidity it needs to meet its obligations.
The most troubled countries in the Eurozone are seeing their local democratic decision-making subordinated to a remote bureaucracy elected by nobody at all.
2) The European Union would gain power to supervise the national finances of deficit countries — including automatic sanctions, and potentially also including the ability to strip voting rights within the EU.
3) The EU institutions supervising national finances would be made more democratically accountable by electing the key figures at the EU level.
Along the way, Sikorski said some remarkable things, including this:
What, as Poland's foreign minister, do I regard as the biggest threat to the security and prosperity of Poland today, on 28th November 2011? It's not terrorism, it's not the Taliban, it's certainly not German tanks. It's not even Russian missiles which President Medvedev has just threatened to deploy on our border. The biggest threat to the security of Poland would be the collapse of the Eurozone.
And I demand of Germany that, for your own sake and for ours, you help it survive and prosper. You know full well that nobody else can do it. I will probably be first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity.
You have become Europe's indispensable nation.
You may not fail to lead.
Of everything he said, it is the third point — the call for European democratization — that is most haunting.
The European Union is not a democracy because until now it has been regarded as an association of democracies. The institutions at the center of Europe existed to serve democratic governments, not to replace those governments.
When the euro currency was proposed back in the 1990s, opponents of the euro warned that different countries cannot safely share one money. Either the euro would crack up under pressure (as, say, the Scandinavian cracked up in 1914 after 40 years of Swedish-Danish cooperation) — or else the EU itself would have to evolve into a single polity.
Proponents of the currency pooh-poohed those warnings. Those euro advocates included not only the usual array of Brussels technocrats, but also America's own leading business newspaper, The Wall Street Journal.
Now the issue has been put to the test. The proponents were wrong. The critics were right. The euro now threatens to plunge Europe and the world into financial crisis followed by severe recession. Threatens? The crisis is here, and the recession may already have begun.
Again as the critics warned, there is no easy way back. Quitting the euro will be painful for the countries that go — and even more painful for the countries who stay. Banks will be ruined, governments will step in, taxpayers will be called upon. The technical term for the unleashed process is "adjustment," but that bloodless term really means unemployment, loss of savings, squeezed public benefits, higher taxes, and years of slow growth.
But to go forward toward a more integrated Europe — just as the euro critics warned, just as the euro proponents promised would never happen — is dangerous, too.
The most troubled countries in the Eurozone — first Greece, now Italy, soon Spain, potentially France — are seeing their local democratic decision-making subordinated to a remote bureaucracy elected by nobody at all.
That will not be acceptable or accepted. We may see populist movements of the Left and Right mobilize to oppose these imposed changes — as people always oppose painful changes in which they feel they have had no voice, which they feel imposed by powerful outsiders. Along with "no taxation without representation," people also resent austerity without representation, pension cutbacks without representation, harder work for less reward without representation.
Yet when people are represented, when they do have voice, they can also show amazing responsibility and self-restraint. Europe should never have needed such a voice, because the euro gamble should never have been taken. Now, the options dwindle to an ugly few. More participation is the one way to make those options a little less ugly. Europe needs a euro democracy as much as it needs euro bonds and euro budgets. Things should have been otherwise, but Europe and the world are where they are.
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