Economic history reminds of just how strange the recent fetishization of the free market really was. A free market based on economic ‘laws’ was always an intensely political object – constructed, regulated and protected by states. Yet investors accepted the premise because it let them ignore messy political questions and instead operate in an abstract realm of quantifiable probabilities. This pristine arena, promised and supported by finance-led globalisation and its flawed economic models, has in the last few years been trampled into a muddy field, mined with socio-political hazards. As Gillian Tett argues persuasively, we have entered a new age of volatility, in politics and society as much as in finance and economics.
What do people in Asia really think about the EU? What does Asia mean to Europeans? These are the kind of question that the Asia Europe Foundation (ASEF) was born to answer. Each year, the Singapore-based think tank commissions studies that investigate ‘the EU through the eyes of Asia’ and ‘Asia through the eyes of Europeans’. The projects gather information from thousands of news reports, hundreds of interviews with opinion leaders and an online survey of more than 12,000 citizens.
The results of this year’s studies were presented at a recent talk at the foundation’s HQ. They show that, unlike ‘Africa’, ‘Latin America’ or ‘North America’, Europeans don’t really conceptualise Asia as a regional entity at all. Instead, the rise of Asia is conflated with the rise of China, as the emerging giant dominates both news reports and Europeans’ ‘top-of-mind’ statements about the continent.
Europe’s financial, sovereign debt and political crisis shows no sign of abating and could yet trigger a fresh global catastrophe. The range of endgame options runs from a costly and contentious closer union among members of the Eurozone to its chaotic fragmentation. There are no good solutions, and no agreement on what might be the least-worst one.
We have had the hamartia – the tragic flaw in the system that allowed high-spending countries to free ride on low interest rates. We have had the hubris – the belief the good times would never end. We have had nemesis – disaster. We now need the anagnorisis …
So says the proud Eurosceptic, classical scholar and Mayor of London, Boris Johnson. But the epiphany for which he yearns is “the moment of recognition that Greece would be better off in a state of Byronic liberation, forging a new economic identity with a New Drachma. Then there will be catharsis, the experience of purgation and relief.”
In the last year alone, the force of the Eurozone debt crisis has pushed reluctant EU policymakers across a series of political Rubicons – Greece has been bailed-out, a temporary eurozone rescue mechanism has been installed, that mechanism has been activated for Ireland, and agreement that a permanent replacement scheme is needed has been reached.
In keeping with Jean Monnet’s dictum that ‘Europe will be forged in crises, and will be the sum of the solutions adopted for those crises’, each of these measures, even the agreement on the need for a permanent financial facility for troubled states, was compelled by overbearing market pressures. Together they amount to a major change in the way the EU functions.
As Europe’s financial crises bed down into economic malaise, a portion of attention turns from fixing the continent’s financial and regulatory systems to reforming its systems of governance.
Faith in politics in Europe is at a historic low. Eurofound, the Dublin-based EU agency devoted to improving living and working conditions, has charted an average 12% decline in people’s level of trust in their political institutions over a two-year period to September 2009. Ireland was one of the worst-affected countries. One can only imagine how that decline has accelerated in the months since.
But there are now a few signs that the economic trauma inflicted on citizens has begun to percolate upwards and to induce change in national institutions. Governing elites that have to varying degrees been discredited now seek to augment parliamentary politics with more direct, deliberative and participative forms of democracy.