Time is running out in the Eurozone

Untangle this knot if you can. In the next days and months, the future of the Eurozone will be decided by the verdict of financial markets on complex measures that are all the various European countries will allow their governments to agree on.

Country after country, parliament after parliament is raising its voice and saying thus far and no further. But Germany’s “must” is Greece’s “can’t”; Nicolas Sarkozy’s “essential” is Angela Merkel’s “impossible”; Slovakia’s red line is Spain’s indispensable minimum. And every day, this cacophony of national democracies is prey to the transnational superpower of markets.

This week, I watched — live, on my computer screen — two fascinating parliamentary debates on Europe: one on Monday evening, in the British House of Commons, and one starting at high noon Wednesday in the German Bundestag. At first glance, the contrast was great: the varnished wood and green leather of the opposing benches in the Westminster parliament against the cool, modern grays and blues of the segmented, hemisphere-style plenary chamber of the Bundestag; the old-fashioned pinstriped suits, paunches and plummy sub-Churchillian tones of Tory Euroskeptics against the almost color-coordinated light grays and blues of German parliamentarians, delivering their characteristic, long Lego-like phrases. Yet underneath, both had a common theme: democracy.

The German Social Democrat and former foreign minister Frank-Walter Steinmeier called Merkel’s treatment of the German parliament over the euro issue “shameless.” Speaker after speaker, including the parliamentary leader of the Greens, rose to insist — sometimes hitting the lectern for emphasis — that every new financial commitment Germany makes to save the Eurozone must be debated and agreed on “here, in the German Bundestag.” Do I hear a plummy “Hear, hear!” from the British Conservative backbenches? In both places, it’s absolutely clear that democratic authority for European decisions comes from national parliaments, not the European one.


And in both places, one also hears the drumbeat of popular dissatisfaction, as articulated and magnified through the media, in opinion polls, not to mention the tent village in front of St. Paul’s Cathedral in London and the protest-hardened square before the Greek parliament in Athens. All these national publics are demanding to be heard. The trouble is that what they want to say is hard, if not impossible, to reconcile with the demands of other European peoples.

Take Merkel’s speech. After belatedly acknowledging that the sacrifices of people in Greece should command Germans’ respect (tell that to the German tabloids) she went on to say that helping solve Greece’s problems will require not just “strict conditions” but also “a permanent oversight [Überwachung] in Greece.” Think how that German word sounds in Greek ears, with Greek memories.

Then she categorically ruled out the European Central Bank’s becoming the Eurozone’s lender of last resort, a kind of Euro-Fed. Loud applause followed in the Bundestag, but she had just dismissed out of hand the main direction in which France wants the Eurozone solution to go — and the one move that, beside German-guaranteed Eurobonds, would awe the markets.

Marching briskly on, she insisted that a satisfactory solution will require a quick change to the EU treaties.

But British Prime Minister David Cameron’s government is firmly committed to holding a referendum on Britain’s position in the EU if there is a treaty change. Is he afraid of that prospect? Is he, as Margaret Thatcher once famously put it, “frit”? You bet he is. And for good measure, Germany’s iron lady added that the German government supports a financial transaction tax — something that would not please the Conservative party’s principal funders in the City of London.

Does that leave any other European partners to be rubbed the wrong way, just to persuade your own German voters to do half of what is needed? Ah, yes, it would be necessary to take tough, intrusive measures to deal with countries that permanently infringe on the Eurozone’s stability and growth pact — “and Greece is not the biggest.” There’s one for you, caro Silvio.

And this is only one speech of one politician in one country — albeit the most important.

Don’t get me wrong. I am not saying that searching democratic national debates about Europe are a bad thing. Quite the reverse; they are long overdue. In Germany, doubts and questions about the euro have been swept under the carpet of political correctness for far too long. In Britain, we do need a referendum on our relationship to the EU.

Not only do I think these national democratic debates are a good thing in themselves; I also believe that, given time, the case for a sustainable continuation of today’s EU would win the argument. Although triggered by skepticism — -skepticism in Germany, a broader euroskepticism in Britain — both these nation’s parliamentary debates actually produced some vigorous articulation of the underlying case for “Europe.” We should not be afraid of open debate. Bring it on.

The catch is time. If this were just a matter of national parliaments and plebiscites, we would have time. But it isn’t, and we don’t. The markets could pull the rug from under the euro tomorrow. Bond traders are apparently already pulling back from Spanish, Italian and even French government bonds. A final irony is that they are doing so partly to protect the interests of European pension funds: that is to say, the long-term retirement benefits of some of the very same people who, in another capacity, as national voters, are making it so difficult to arrive at a solution that would impress the markets. Answers, anyone?

Timothy Garton Ash is professor of European studies at Oxford University, a senior fellow at the Hoover Institution and the author, most recently, of “Facts Are Subversive: Political Writing From a Decade Without a Name.”