PRISONERS OF THE EURO / THE NEW YORK TIMES OP EDITORIAL

June 1, 2013

Prisoners of the Euro

By ROSS DOUTHAT




TO its custodians and admirers, the European Union is the only force standing between its member states and the age-old perils of chauvinism, nationalism and war. That was the pointed message that the Nobel Committee sent last year, when it awarded the union a Peace Prize for its role in “the advancement of peace and reconciliation, democracy and human rights.” And it is the message hammered home relentlessly by the Continent’s politicians, who believe their citizens face a stark choice, in the words of Chancellor Angela Merkel of Germany, between continued integration and a return to “centuries of hatred and blood spill.”

But right now, the E.U. project isn’t advancing democracy, liberalism and human rights. Instead, it is subjecting its weaker member states to an extraordinary test of their resilience, and conducting an increasingly perverse experiment in seeing how much stress liberal norms can bear.

That stress takes the form of mass unemployment unseen in the history of modern Europe, and mass youth unemployment that is worse still.

In the Continent’s sick-man economies, the jobless rate for those under 25 now staggers the imagination: over 40 percent in Italy, over 50 percent in Spain, and over 60 percent in Greece.

For these countries, the euro zone is now essentially an economic prison, with Germany as the jailer and the common currency as the bars. No matter what happens, they face a future of stagnation — as aging societies with expensive welfare states whose young people will sit idle for years, unable to find work, build capital or start families.

The question is whether they will face ideological upheaval as well. So far, the striking thing about the aftermath of the 2008 financial crisis, both in Europe and the United States, is how successfully the center has held.

Power has passed back and forth between left and right, but truly radical movements have found little traction, and political violence has been mercifully rare.

In a sense, Francis Fukuyama’s post-cold-war declaration of the “end of history” — by which he meant the disappearance of credible alternatives to liberal democracy and mixed-economy capitalism — has held up pretty well in the last five years. Amid the worst economic disaster since the Great Depression, illiberal societies like Egypt and Syria have faced political crises, but the developed world has not. There has been no mass turn to fascism, no revival of Marxist economics, no coup d’états in Madrid or jackboots in Rome.

But you have to wonder whether the center can hold permanently, if unemployment remains so extraordinarily high. How must liberal democracy and mixed-economy capitalism look to young people in the south of Europe right now? How stable is a political and ideological settlement that requires the rising generation to go without jobs, homes and children because the European project supposedly depends on it? And for that matter, how well is the Continent’s difficult integration of Muslim immigrants likely to proceed in a world where neither natives nor immigrants can find work?

Already, the Greek electorate has been flirting with empowering a crypto-communist “coalition of the radical left,” even as a straightforwardly fascist party gains in the polls as well. Hungary’s conservative government has tiptoed toward authoritarianism. Spain has seen huge street protests whose organizers aspire to imitate the Arab Spring. And lately, Sweden, outside the euro zone but not immune to its youth unemployment problems, has been coping with unsettling, highly un-Scandinavian riots in immigrant neighborhoods.

These perturbations do not threaten democracy in Europe yet, and maybe they never will. Maybe the liberal democratic consensus is so bred into the bone that no amount of elite misgovernment can persuade Europe’s younger generation to turn against it. Maybe nothing can end the end of history.

But for the countries facing a youth unemployment crisis, that still seems like an awfully risky bet to make.

Yet there’s a Catch-22 facing Greeks and Spaniards and Italians looking for an alternative to just staying the course. As wrenching as it would be, the option that would do the most to defang extremists of the left and the right would probably be to abandon the euro immediately, with each country regaining control of its own fiscal and monetary policy and seeing what options open up. But at the moment, the only people arguing for that course are ... the extremists of the left and the right! 

For that to change, more of the Continent’s political elites would need to recognize that their beloved integration project may actually be threatening Europe’s long democratic peace. For now, there simply aren’t enough responsible people ready to unwind what should never have been knitted together in the first place. But with every increase in the unemployment rate, the odds get better that irresponsible and illiberal figures will end up unwinding it instead.