Saving the euro required two things: a clear political decision that would put an end to the speculation about its future; and a financial mechanism that would make such a promise credible. In 2012, after several years of doubts, clumsiness, and mistakes, Europe's leaders did both things: on the one hand, German Chancellor Angela Merkel accepted the idea of moving toward banking union; and on the other, European Central Bank (ECB) President Mario Draghi was allowed to buy as much debt accumulated by member states as necessary to save the euro. These two decisions prevented the euro from slipping off the cliff edge, returning it to a stability it hadn't known for a few years.
The euro's strength, albeit temporary, explains why the shock waves from last week's elections in Italy were relatively benign. We should not forget the impact of the outcome of Greek Prime Minister Yorgos Papandreou's decision in October 2011 to call a referendum on the austerity measures being imposed on Greece by the troika of the EU, the ECB and the IMF: this sent some of the measures of market uncertainty monitored by financial analysts to levels higher than those that followed the attacks of September 11 in the United States. Nor should we forget the Greek elections of June 2012, when the likelihood of a win by the Syriza left-wing coalition was seen as a financial Armageddon. Italy may currently be chaotic, but the euro is holding on, at least for the moment.
The euro is simply a means, not an end in itself: the end is the
The outcome of the elections in Italy, as with the temporary improvement of the euro, is also a reflection of Europe's political fragility, and points to a crisis of legitimacy that looks to be the pattern for forthcoming elections throughout the bloc. Surveys carried out by the EU's Eurobarometer quarterly opinion poll clearly show to what degree confidence in the European Union has fallen.
In countries like Spain, "net" trust in the EU (a measure calculated by subtracting the percentage of those who have trust from those who do not) was 42 points in 2007 (65 percent trusted, and 23 percent didn't). Today, the figure is 52 points, with 72 percent having no trust in the EU, and just 20 percent continuing to trust it. A spectacular fall.
Trust in the EU plummets
"Democracy is an intangible value that is being devalued in Europe," says French economist Jean-Pau Fitoussi, one of the leading voices among critics of an EU that has been able to save the euro but unable to avoid widespread discontent among the electorate. This growing anger can be seen on the streets and in opinion polls, in particular among the jobless, and now in the way people are voting.
The facts speak for themselves; whether anybody is listening is another matter. Polls carried out by Eurobarometer show that trust in the EU is plummeting as the crisis deepens, even in countries that have traditionally been pro-Europe. In 2007, two out of three Spaniards said that they trusted the EU; in the latest, 72 percent say they no longer have any trust in the bloc. The story is the same throughout the EU - even in Germany and France, albeit with big differences.
Asked if they like the EU as it is today, if Europe meets their expectations, and if economic policy is correct, Europeans invariably say no, no, and no. But if the question is whether they would therefore like to leave the EU or the single currency, the answer is also no. Never. No way.
The heart of the matter is that people are unhappy with the stunted growth that has come out of unbridled austerity. And even though we have heard the story a thousand times over, people do remember the peace, the stability and the welfare policies that the EU has brought to them: nobody wants to bury those advances by carrying out dangerous experiments, say senior EU officials.
The pundits have been talking for months about the appearance of a major anti-EU force in European politics. Above and beyond the polls, the outcome of the elections in Italy reflects anger at Brussels' one-size-fits-all policies, which have mired the bloc in recession. The European Commission insists that the cuts approved by a prime minister virtually appointed by Brussels and Berlin have nothing to do with the uncertainty created by the outcome of the elections, with the emergence in Italy of the former comedian Bepe Grillo and Berlusconi's umpteenth resurgence. The rise of the UK Independence Party has coincided with growing calls for a referendum on remaining in the EU in Britain.
The vice president of the European Commission, Antonio Tajani, insists that Italy has not voted against Europe per se , but told EL PAÍS that the vote was "against the policy of sacrifice, sacrifice, and more sacrifice. In the first place, Italians voted against corruption. Then they voted to reject austerity policies - policies that do not stimulate growth."
Leaving the single currency aside (at least for the moment), the crisis seems to have set off a carefully orchestrated plan to dismantle the welfare state. This, say the analysts, explains the widespread mistrust in the EU.
"The survival of the euro has been achieved at the cost of destroying social institutions and by creating huge numbers of unemployed in the peripheral countries. This is a disaster," notes the economist J. K. Galbraith. In response, Brussels says: "There is no alternative to consolidation. The reforms will be the same regardless of who is in office."
This massive drop in trust requires us to think seriously about the future of the EU, particularly in a country like Spain, which has always been pro-Europe. But on the basis of the graph showing that this lack of trust is to be found throughout the euro zone, we all need to be thinking about the future. In Greece, Portugal, Ireland and Cyprus, the EU is regarded with the same degree of mistrust as in Spain. Importantly, this increase in mistrust is to be found not just in debtor countries, but also in creditor nations, or those in a better financial situation, such as Germany, Austria, France, the Netherlands and Finland. In other words, lack of trust in the EU is not a question of some countries versus others. As things stand, everybody seems to be losing, and nobody winning.
We are facing an unprecedented crisis of confidence. A political system cannot make all of the people happy all of the time. Government is about choices, about assigning priorities, taking painful decisions, benefitting some at the expense of others. Legitimacy means that a government's decisions are accepted by the electorate even when they may not be to their benefit in the short term. This acceptance may be based on a feeling of belonging to a wider group, on considerations of justice and equality, or on agreement with and acceptance of the procedures that led to these decisions being adopted.
In Europe, where collective identity, shared values and democratic procedures are still being formed, legitimacy has largely been won through economic growth: the more our economies have grown, the more support there has been for European integration. This means that our capacity to believe in the system, by being almost exclusively based on economic growth, is weak, and tends to evaporate at times of crisis.
This is exactly what is happening at the present. On the one hand, the austerity programs may be successful in terms of reducing public deficits (although not debt), they do not produce growth or employment, as a result of which they do not win the support of the electorate required for them to continue to be implemented. What makes things worse is that as governments are forced to systematically break their electoral promises and to govern on the basis of policies that do not reflect their traditional political outlook, they also contribute to undermining the legitimacy of our democracies. As we have seen in countries bailed out by the EU, political systems are being degraded (Spain and Portugal), or are falling apart, as in Greece or Italy.
As for the creditor countries, where there is also no growth, the widespread feeling is that the countries of the periphery are a drag on their economy, absorbing their ever-scarcer resources and pulling them down.
It is under these conditions of disaffection and mistrust that the EU must now press ahead with political and economic integration. The euro has been saved, but it will not survive in the long run without a banking union that includes crisis resolution mechanisms and guarantees of deposits throughout the euro zone. Nor will integration happen without proper funding, debt sharing and much better coordination of economic policies.
But these are decisions that require exactly what Europe currently lacks: trust in the EU.
For Europe to function, people in the north, the south, in both the creditor and debtor nations, must be prepared to give European institutions the right financial instruments; and at the same time, governments must be seen to be efficient and legitimate. That said, if German taxpayers are to support Spanish savers, and a Spanish saver's money is to support deposits in Greece or Portugal, we need levels of trust in Europe that are currently sorely lacking.
In June 2014, just over a year from now, Europeans will go to the polls. If by then trust has not been re-instilled in the EU, we could be in for a nasty surprise. Saving the euro was essential, but the euro is simply a means, not an end in itself: the end is the EU's people, and a euro without them doesn't amount to much.