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Broken Europe

Why the EU Is Stuck in Perpetual Crisis

Macron and Merkel at the NATO Summit in Brussels, July 2018. Kevin Lamarque / REUTERS

The European Union has always struggled to accommodate the democratic politics of its members. The problem became serious in 1999, with the creation of a currency union without an accompanying political and fiscal union. Then, beginning in 2011, the eurozone sovereign debt crisis turned what had been a real but manageable issue into a predicament from which the EU has no discernible escape. Stuck with an unworkable currency union, the EU can neither accommodate democracy in its member states nor suppress it. The result is likely to be the continuation of the pattern over the last decade: crisis after crisis with no lasting solution.

THE SICK MEN OF EUROPE

The confrontation between the Italian government and the eurozone authorities over the size of the Italian budget deficit is the latest example of the EU’s inability to cope with democracy. Both parties in the Italian coalition government, the Lega and the Five Star Movement, made tax and spending promises during the general election last year. But they cannot deliver on them, since doing so would mean running larger deficits. That would break commitments the previous government made to the European Commission and the fiscal rules enshrined in the treaties that set up the eurozone. Italy largely depends on the European Central Bank (ECB) to finance its borrowing, so it cannot simply defy the EU. 

Yet the majority of Italian voters will not readily acquiesce to European control over Italian politics. Indeed, it was only after 2011, when the ECB and German Chancellor Angela Merkel pushed Italian President Giorgio Napolitano to fire the recalcitrant Italian Prime Minister Silvio Berlusconi and appoint a technocratic government, that the Five Star Movement began its spectacular rise. Today, the Italian government believes that the more it stands up to the EU, the more votes it will win in next May’s elections to the European Parliament.    

Despite the euro’s obvious structural flaws, its member states cannot agree on what is wrong with it—let alone how it might be fixed. French President Emmanuel

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