06/18/2012 06:15 pm ET Updated Aug 18, 2012

Europe's Real Problem: A Deficit of Democracy

Greek voters have spoken. Now it's the turn of the politicians to form a government and overcome the country's economic and financial problems. Or is it? I think not. In spite of appearances, Europe is not ruled by the people or by its elected officials. It is technocrats in Brussels, Frankfurt, and the capitals of the most powerful countries who call the shots. They demonstrated their power in the late 1980s when member countries committed to the Maastricht Treaty, and they displayed their influence yet again in the mid-1990s when they persuaded governments and the public that the common currency was crucial to attaining the dream of European integration. Now that this road of roses has turned into a nightmare, they have persuaded politicians that yet more integration is needed. The voters are divided as to how to proceed, as the Greek election returns clearly indicate.

It is hard to disagree with the idea that a fiscal union in Europe coupled with centralized supervision of banks and a European-wide deposit insurance scheme would go a long way to underpin the common currency. We must accept the inescapable logic that lack of integration can be overcome with more integration. This philosophy now permeates European decision making: problems are always constructed as the result of insufficient integration, and therefore solvable with more integration. Technocrats gained the upper hand in Europe during the crucial period the French left-wing Christian politician and Socialist Party member Jacques Delors served as President of the European Commission, which stretched from January 1985 until December 1994, the longest in its history. Meanwhile, the governments of the smaller and poorer member states on Europe's periphery were willing to go along with increasing demands for integration assuming Europe gives them what they wanted--subsidies. Only London, and to a lesser extent Copenhagen, remain in defiance of the technocratic dogma that any problem can be solved with tighter integration. This type of thinking is making it very difficult for European public opinion to even conceive of other types of solutions to the severe economic, financial, and social problems afflicting the continent. The trouble with believing that integration is the solution to everything lies in that in a bloc of 27 sovereign states there is a wide spectrum of opinions as to exactly how much integration is necessary for the single market, the continental-wide financial system, and the common currency to work properly.

I think that pursuing tighter integration as the solution to Europe's current problems is problematic for two reasons. First, there is little time left to design new European institutions before unemployment and economic misery become unbearable. And second, I wonder about the legitimacy of a European-wide fiscal authority--a common treasury--without the people being able to elect the European political leadership directly. At the present time, there is no such election of European officials. The European Union is a union of sovereign nation-states, which nominate and appoint European-level officials. As the political scientist and former Labour Member of Parliament David Marquand has accurately observed in his book, The End of the West: The Once and Future Europe, back in the 1950s the founding fathers of the European communities did not wish to suppress the sovereignty of the member states. Rather, they wanted to complement it by creating new institutions. This original idea of a Europe of united nation-states has mutated, especially in the midst of the present debt and monetary crisis, into an all-out attempt to remake Europe as one entity, doing away with whatever little sovereignty and autonomy for policymaking remains at the national and local levels. The technocrats' favorite strategy for having their way is to blame national governments for all present ills because of their fiscal profligacy, and to deprive them of resources by demanding harsh austerity measures. In so doing, they seek to thwart national opposition to their designs and to suppress public debate, effectively rendering any other alternative course of action unviable. Adopting a centralized fiscal and budgetary authority in Europe without European-wide elections of the officials running it will create a serious gap in terms of democratic legitimacy, and I simply don't think there is enough time to create the necessary institutions anyway.

At this grave hour in which the future of Europe and that of the global economy are at stake, let's not forget that European institution-building has always been more effective when based on the national interests of the member states, as the Princeton political scientist Andrew Moravcsik demonstrated in his landmark book, The Choice for Europe. The continent has gone from being an "embattled, mutually antagonistic circle of suspicious and introverted nations," as Tony Judt put it in his controversial 1996 essay, A Grand Illusion?, to becoming an uneasy bloc of nations resisting additional transfers of sovereignty to a bureaucracy that has yet to articulate why such a change is necessary. The technocrats are not interested in debating their ideas, only in implementing them. Europe is thus starting to suffer from a yawning democratic deficit which threatens to match the budgetary imbalances of some of its member countries. The integration strategy fueled by forced convergence, harmonization, and standardization of everything from markets to product regulations, and from social policies to monetary affairs, is simply failing to address Europe's unemployment and fiscal imbalances, and at the same time it is weakening its long-term viability as a democratic project. Moreover, the patient may pass away well before the new institutional framework is put in place. What Europe needs is to jump start the economies along its southern periphery by allowing slightly higher inflation. And above all, Europe needs to preserve its democratic practices and achievements. Let's not forget how difficult it was to bring democracy to the parts of Europe most deeply affected by the crisis.