Wednesday, December 26, 2012

The Dirty South

Flanders – future newest member of the EU?

I promise to return to the lighter, stranger, funnier side of German culture in 2013. But first, one more foray into the complex dynamics of an increasingly unstable European Union...

In my previous post about the chinks in the armor of the European Union, I mentioned reinvigorated regionalist and independence movements within national borders of EU member states. Among others, the Catalonians, the Flemings, and the Scots have made concrete moves in this direction in recent months (read this very interesting and informative profile of the movements from die Zeit. The author does a great job of concisely describing and comparing their situations and histories). Though I personally think the recent rise of referenda on independence have a lot to do with the present economic and cultural uncertainty in the EU at large, these local movements have long histories as well, and tell us a lot about the human story in general. Indeed, human nature seems to dictate that as long as one is comfortable and provided with basic needs and work, political and cultural differences can be and are put aside in the interest of larger political and cultural units. We probably also have to add authoritarian government to the list of unifying forces, as in the case of the USSR and Yugoslavia, which promptly broke down into their regional parts – and in many cases descended into serious conflict – following the weakening or downfall of the respective regimes.

Scotland's flag – a long history of resistance,
and finally an independent land?
So there were really two things that struck me when reading this piece in Die Zeit. First and foremost is the European – and I would argue worldwide – trend away from national identities and borders toward more localized structures. As any history student knows, the nation seems like an eternal edifice to us today because all of us were born in an era where the world would look completely foreign without national borders. But of course in many cases in Europe, the nation wasn't even born until the second half of the 19th century, so the memory of a pre-national society is much more salient in many Europeans' collective consciousness; I think there are lots of places in Europe beyond the above-mentioned territories where you could ask residents with whom or what they identify most intimately, and the answer wouldn't be Germany, Italy, or Spain, but Bavaria, Lombardy, or Andalusia (or even Munich, Milan, or Granada). In the United States, even as regionalism is being muted by increased long-distance and urban migration, states such as Texas are reasserting their historical rebellious identities in the face of the clearly-tyrannical Obama administration. In China alone there are perhaps a half dozen examples of regional movements struggling against a government that spends much of its time and effort trying to hold together and justify the idea of one China. There are countless other examples in post-colonial Africa, the Middle East, etc. The case of regionalism in the EU is particularly interesting, though, because its constitution has specifically encouraged the preservation of these unique identities, perhaps to the detriment of the Union itself. Interestingly, if the Flemings want their own country, the 'Belgians' – or whatever is left if the Flemings separate – would have to agree to their entry into the EU along with the rest of the member states. Likewise, Spain would have to agree to Catalonia's legitimacy as a state. Can the EU really survive if the regionalism ball gets rolling and gains momentum? I can think of quite a few other regions that could gain momentum if these first regions successfully gain independence (South Tyrol, Friesland, Basque, etc.).

The Catalonians – funding Madrid amid
economic instability in Spain.
The other thing that struck me as I read about these referenda was just how often regional and cultural divides are defined by a north-south border. Italy, Great Britain, Germany, the U.S., and indeed the entire continent of Europe have distinct cultural and political borders that run horizontally. Though the south of Germany breaks the mold by being the richer region in Germany, the southern regions of all of these examples are viewed by their northern counterparts as being less productive, more provincial, or less economically successful parts of their respective nations, just as southern and Mediterranean Europe is seen by the North as the delinquent participants in the European Union. In this context, I couldn't help but remember Jared Diamond's book Guns, Germs & Steel, which, though flawed in many respects, does a pretty solid job of outlining in broad strokes the tendencies and trends of human movements, the proliferation of technologies and disease, and the distribution of cultures. In short, he points to the fact that all of these things tend to move much more readily and rapidly horizontally than vertically. This idea is based largely on the fact that weather and climate are huge factors in determining which microbes, plants, and lifestyles are possible or likely in a given place (geography and just plain chance also admittedly come into play). This is why a New Yorker would most likely feel more at home in London than in Savannah, Georgia, and it also reinforces itself because people from northern climes and cultures have a lesser tendency to migrate from north to south or the other way around. 

So I think my point with all of this is that I think that so much of the conflict within nations and continents is based on this inherent, fundamental difference between the sober, determined, industrious, colder, cleaner North, and the emotional, profligate, lazy, hotter, and dirtier South. At the small scale and the large – that is, at the continental or national, or even state level, these differences continue to strengthen and reinforce these regional (and linguistic!) identities. Where that leaves us in the globalized age remains to be seen, but I feel like humans – being animals that by nature organize in smallish groups – will always have a strong desire to identify with something on the local level. This tendency seems to be gaining traction again, perhaps as a backlash to the pervasiveness of global economies, culture, and technology. The question is whether the nation really has any relevance in this hierarchy as technology continues to render its borders irrelevant. The European Union just might be the perfect place to keep an eye on to find out.

Tuesday, December 11, 2012

European (Dis)Union

Greek discontent with German euro policy (or just the Germans?)
     Now that the U.S. elections have passed, and the Americans haven't yet peeked over the edge of the fiscal cliff, the Germans can get back to the business of discussing the euro, austerity, the fiscal responsibility of their southern neighbors, and the general future of the European Union. When the grand European project began in the wake of the Second World War, it was clear that Germany and France would have to be the core of the union. In the opening decade of the EU, Germany relished the chance to resume it’s role at the heart of Europe’s economic and political world. Indeed, the euro opened with a bang and quickly established itself as a consummately stable currency, despite the fact that cost of living pretty much instantly increased in all member states. Exports were strong, the elimination of trade barriers and international investment leading to booming economies in countries like Ireland, Spain, and later in the former Soviet territories. What lurked beneath, however, were some very key structural flaws in the common currency that have left the euro – and the Union as a political/cultural entity – where it is today: the currency remains stable against the equally fragile dollar, but it's future as the EU's common currency is quite uncertain. The Union itself, I would argue, wavers amid doubt that the differences between the countries (or perhaps regions) of Europe are just too great to reconcile. I even saw these chinks in the armor when I was living in Austria in 2006 and writing about the EU on the unfortunately now-defunct 'Stusie' blog.

     So if we boil it down to a nice, viscous goo, the problem in the European Union is that it is probably now too united to drop the common currency (read: boot Greece, Portugal, Italy?, Spain?) without inducing a domino-effect run on the banks of the rest of the Mediterranean, which would in turn surely send the world economy back into a spiral. On the other hand, it is not united enough to control a common currency the way it should be governed. Now, I'm no economist, but I do understand that when an economy in a given country stagnates, interest rates and a number of other currency controls can be manipulated to navigate and hopefully reverse the downturn (just as overheated economies such as China 5 years ago can be cooled). The planners of the euro – perhaps due to oversight, perhaps resulting from naivete regarding the debt boundaries set prior to the euro's debut (even the solid German economy is now hovering above the 60% of GDP debt limit set by the Maastricht Treaty) – did not foresee the fundamental differences between the member states' economies. The 2008 crisis shined a floodlight on these differences, but over time – even had the crisis not happened – this problem would have emerged anyway. In essence, with the euro pegged to the economic trends of the most 'core' members (Germany, France, the Netherlands, etc.), the rest of the countries were left powerless to react in an agile manner to the drastic effects of the downturn, or any other hypothetical financial event that may happen.

     Greece has become the face of this problem in Europe, and their economic failings have been attributed (mostly by politicians) to everything from corruption in the public and private sectors, excessive pension programs, and general laziness and profligate spending. The EU's (read: Germany's) response to this problem has been to scold Greece and the other 'problem states' for the above-mentioned shortcomings, and to institute austerity measures to quell debt. In a way, I think Merkel might feel like she's in a strategically stronger position advocating austerity: if it fails, she can simply point to the Greeks' inadequate implementation of the recommended steps. However, I'd like to set aside the debate about whether one can actually 'cut' one's way out of an economic crisis (for commentary on this, see nearly any column written by Nobel Laureate economist Paul Krugman) and have a look at the cultural complications brought about by Germany's response.  
     As the EU (read: Angela Merkel, having 'convinced' France and 'the north' to acquiesce) redirects money toward the south in order to calm market fears about those countries' economies, the general populations of both contigents are increasingly resentful and angry with the other side. The Spaniards and Greeks wield placards depicting Merkel in Nazi garb, believing that it is the intention of the Germans to 'punish' the Greeks for their impropriety. In Germany and the rest of the 'paying' customers, an already-present-but-latent air of superiority toward the lazy and profligate South has become more and more prevalent. In my experience, the average German is not aware of many of the advantages that Germany's economy derived from having free reign in the less-developed economies in Europe, and therefore view the ECB bailouts as pure-and-simple charity given to the problem states. In effect, I think both angry groups are missing part of the story, but who can blame them for being livid about losing their livelihood/jobs/tax revenues? 

My point in all of this is that the crisis with the euro, in some sense, has served to bring all of the underlying non-economic problems to the European Union to the surface. Now that business isn't booming the way it was in the early 2000s in Europe, the South-North divide has reemerged, Great Britain has suddenly walked back its participation in the Union, and perhaps most importantly, a number of historical intra-national local/regional independence movements (the Basque/Catalonians in Spain, the Flemings in Belgium, the Scots in England, etc.) have gained huge momentum in the past couple years (watch for my next post on this topic). Though peace persists on the large scale, all is not well in the Union, and I'm here to tell you that austerity won't bestow satisfaction on the North for having taught the South a valuable lesson in fiscal responsibility. Likewise, the debt-ridden states will find no resolution of their economic woes until the underlying shortcomings of the common currency are addressed.

Update: another interesting contribution to the debate from prominent economist Joseph Stiglitz in Slate magazine.