Monday, February 27, 2012

Europe’s Fairness Crisis

BRUSSELS – Slowly– far too slowly – politicians in Europe are beginning to understand that the deep crisis gripping the European Union is a game changer. Even an eventual resolution of the eurozone crisis will not bring a return to the established political order. Europe’s crisis is about fairness, with widespread and growing discontent over wealth disparities now being highlighted by cases of real hardship. The pay and privilege gap between Europe’s rich and poor has been widening since the 1980’s. Most EU countries have targets aplenty on which the public can vent its rage – whether bankers’ bonuses in the United Kingdom, or multinational corporations’ tax rate of less than 6% in Belgium, whose citizens are the most highly taxed in the OECD.

These grievances are exacerbated by austerity policies, and the political consequences are set to be far-reaching. First, the EU itself risks being scapegoated by public opinion as a source of peoples’ economic woes. Second, voters are likely to accept tough spending cuts only from newly elected governments, rather than from incumbent leaders who can be held responsible for the crisis.

For many years, Europeans viewed the EU as a catalyst for economic growth and greater “cohesion” through policies that primarily benefited Europe’s poorer countries and more backward regions. That seems less and less true of public opinion today: it is doubtful that EU institutions are still widely regarded as champions of the underdog.

The perception that the EU somehow brought about the eurozone crisis is unfair, but the eurocrats in Brussels have been doing little to dispel it. The Commission’s low profile on tackling the near-meltdown of the banks and the sovereign-debt crisis largely reflects the limits of its political mandate, but it also creates the impression that Europe’s executive hasn’t been championing the interests of the under-privileged.

More than 25 years have passed since Jacques Delors, the Commission president at the time, introduced the idea of a “Social Europe,” which the Union’s array of policies today has made into much more than a slogan. But its image has become faded, and it seems to lack any connection to the idea that the EU could somehow be softening the impact of its member states’ austerity measures. More