Will it Be Enough?

Wolfgang Streeck in Sidecar (Photo by Kevin Woblick on Unsplash):

It’s summer, Brussels pretends to be on vacation, but nobody believes it: clouds are gathering, no silver lining in sight, nerves wrecked all around. Forests are burning, rain is falling, rivers are flooding – the climate crisis has hit home, more undeniably than ever. Of the €750 billion Corona ‘recovery fund’, not a single euro has yet been spent and the fourth wave is beginning to unfurl. Time for a fiscal booster shot – but how to pay for it? The French war in Africa drags on, the failed states of Libya, Syria, Iraq and Lebanon continue to fail, German demands for a European asylum regime that protects Germany from having to live up to its moral rhetoric are as divisive as ever, regime change in Russia must wait since Putin won’t resign. And now Afghanistan: Good Uncle Joe has become Bad Uncle Joe, toute l’Europe being shocked: unilateralism! In Germany and the UK, governments are desperately trying to avoid explaining why, apart from following American orders, they have been fighting a senseless war for two decades in an ungovernable faraway country. And in the midst of disaster everywhere Angela Merkel, the European Union’s unappointed but all the more effective Super-President, who they say has somehow kept it all together, is to leave her office as German chancellor this coming autumn, forever.

Will ‘Europe’, or the ‘European project’ as embodied by the EU, survive Merkel? In the Realpolitik of Brussels, this translates into whether Germany will continue to fulfil its obligations as the EU’s hidden hegemon after her departure, meaning first of all whether it will continue to pay. This it can do in a variety of ways, many of which are designed to be maximally obscure: by letting its net contributions to the EU budget rise; by allowing the European Central Bank to engage sub rosa in state financing, in contravention of the Treaties; by agreeing to underwrite the Corona ‘recovery fund’, also outside the Treaties; by allowing that debt to be serviced by more debt in the future, letting the €750 billion, sold as a one-of-a-kind emergency measure, turn into a ‘historic breakthrough’ toward a ‘supranational fiscal capacity’ à la française – while, in order to keep interest rates low, intimating to the markets that if the worst came to the worst, Germany would be on-hand to offer ‘European solidarity’.

More here.