In a recent CER insight Charles Grant offers a number of criticisms of themes in my book, ‘Turbulent and Mighty Continent: What Future for Europe?’ My basic thesis in the part of the work he criticises is simple. The coming of the euro has created de facto economic federalism at the core of the EU. The eurozone countries have become irrevocably interdependent. New forms of collective economic management simply have to be set up to manage that interdependence – and to cope with the strains and conflicts it has produced. The Union is so far only in the early stages of that process, which will have to involve fiscal mechanisms, and not only a banking union.
Economic federalism, I go on to argue, is not possible in the longer term without political federalism – in some form or other – because otherwise it has no effective legitimacy. The euro may have been set up in the usual EU fashion, as a back-stage deal between a few major states, but the consequence has been to undermine that very way of doing things. The traditional problems of the EU – lack of democratic involvement of the citizenry, and the absence of legitimate political leadership – can no longer be simply swept aside or disregarded. The surge of support for populist parties has its origin in this new situation.
Economic federalism, I go on to argue, is not possible in the longer term without political federalism – in some form or other – because otherwise it has no effective legitimacy. The euro may have been set up in the usual EU fashion, as a back-stage deal between a few major states, but the consequence has been to undermine that very way of doing things. The traditional problems of the EU – lack of democratic involvement of the citizenry, and the absence of legitimate political leadership – can no longer be simply swept aside or disregarded. The surge of support for populist parties has its origin in this new situation.
