Points of view: Making sense of the ‘European Crisis’

What are the causes of Europe’s ongoing financial woes and who is to blame?  What role has the continent’s political structure played? How much austerity can countries handle? And what legal and political reforms might help fix the EU’s problems? These issues and many more were discussed at a panel discussion,  “Taking Stock of Europe’s Crises:  Politics, Debt, Recession, and the Euro,” on Dec. 11  that included professors of economics, political science, history and law at the University of Michigan.

Here are edited excerpts from the discussion, moderated by Joshua Cole, director of U-M’s Center for European Studies:

Jim Adams, a professor of economics whose interests include the European economy and industrial organization:

“The real crises were not caused by Greece. They were not occurring in Greece. They are really crises that affect the more central and major players inside the European Union. If you hear me indirectly speaking of Germany and France, you have heard correctly. We tend to think there are these profligate countries in the south that don’t know what real and meaningful markets are and they don’t work hard and play by the rules. To use the terminology of 1960s America, they are like Cadillac welfare queens. But in fact, when we look at the ways markets function and the relationship between governments and business, we would be hard pressed to find a genuine and authentic example of true economic liberalism, in the European sense of the word ‘liberal,’ whether we look at a country like France or even if we look at a country like Germany.”

Dario Gaggio, an associate professor of history whose research interests include modern Italy, political economy, agrarian and environmental history:

“Europe has an opportunity to redefine what economic growth means. It’s clear that we run the risks of being locusts to our world and actually wipe it out. Imagine if the same levels of consumption were to be enjoyed in China or India as people do in Germany or the United States. There is no amount of resources that can sustain that. So in a way, Europe can be at the vanguard of this process of redefinition of what a just form austerity might look like.”

Anna Grzymala-Busse, a professor of political science whose fields of study include comparative politics and political development:

“The underlying institutional architecture of the EU is really a halfway house. It’s neither a federation nor is it a confederation. It’s something in between. The problem is the facts on the ground are not matched by the institutional architecture. So on the one hand, the EU has a common currency, but it has no common budget and no common minister of finance. We have common borders but no common immigration policy. We have common rules but the execution of these rules is left to the individual countries. All this leads a lot of people to ask, ‘How sustainable is Europe?’”

Daniel Halberstam, a professor of law and director of U-M’s European Legal Studies Program:

“In order to sustain economic responsibility at the member-state level, we have to make sure that member-state politicians will actually have the interests of the overall system in mind when they go spend money. That they just don’t go spend money hoping to be bailed out by the center down the road. They have to have the interest of the entire system in mind when they act. How do you do that? You have to make open pathways for politicians from the member states to the center. There has to be a rotating system where a member-state politician wants to become the next European Commission president or a member-state politician wants to become essentially the next foreign minister of the European Union. We have to have these pathways open so that when member-state politicians act, they actually take the center into account.”

Enjoy this video of the event:

The event was cosponsored by the Center for European Studies and the Weiser Center for Emerging Democracies at the International Institute.