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Home / Resources / News / How do you spell crisis?

How do you spell crisis?

This article is part of the Transeuropa Journal, the official publication of the Transeuropa Festival 2012

by Niccolo Milanese

The European economic crisis, most associated with Greece in the minds of the population, is also expressed in terms deriving from ancient Greek: krisis literally meant “to decide, to judge”, and the term was used for a turning point in a disease, the critical moment of going towards recovery or death; economy derives from oikonomia, meaning “household management”. The European economic crisis, then, is a turning point in the disease affecting the common European household, and the question is whether the disease will continue or whether a turning point towards recovery has been reached.

The sovereign debt crisis in Europe – which has filled the front pages of newspapers and the agendas of more and more European summits for the past two years – has revealed an underlying political crisis within the European Union. That political crisis is a crisis of sovereignty itself, a crisis in the very possibility of governance, which somewhat ironically expresses itself in a monetary form in the debt crisis.

An earlier version of this crisis arguably motivated the creation of the European Union itself already over 60 years ago: devastated by war, the governments of the founding member states of the Union realised they could not achieve domestic prosperity independently of one another, and that their political legitimacy relied upon that promise. The European Union was an answer. That promise, of course, has been realised unevenly and unfairly in the European populations as the European Union has enlarged, but it was sufficiently believable for enough people to more or less keep the political crisis hidden.

Now the promise of any further economic advancement is looking more and more like a chimera, and the gaping inequalities which have opened over the past 20 to 30 years are becoming bitingly unfair for those at the bottom end. The inequalities are the real poison of the disease, and all the recent signs show that the disease is getting worse.

The political crisis is above all at a national level. The pretence of the independence of the economy from politics is only half-willed, for the political powers at a national level can not totally control the economy and all its actors even if they want to. The reality is more like a Faustian pact, whereby political leaders have chosen to let certain parts of the economy freer than others (the financial markets in particular) on the promise of sufficient growth and in order to maintain a social contract with their populations. The distribution of the proceeds of financial capitalism has become increasingly inequitable, and spurred by the credit-crash of 2008-2009 this globalisation pact has now come undone with a sudden loss of faith on all sides.

The battle is now between those political leaders and financial institutions who are still getting some short-term profits from the failing system, and the classes of the people of Europe being asked to pay the price. The institutions of European governance, which were the expression of the compromise found between governments and markets in sharing sovereignty – in particular the European Council, the European Central Bank, the European Commission – have become dysfunctional, and are increasingly bypassed altogether. The newly agreed ”fiscal compact” – which is supposed to resolve the European economic crisis through enforced austerity and discipline – is a pure expression of the disequilibrium of power in the intergovernmental realm. The economic elites are beginning to abandon the European household and build a sweatshop next door.

A return to a national economy, just like a return to a national politics, is as impossible as it is undesirable for European countries, too small to prosper in an increasingly globalised world of regional actors, and already highly interlinked both economically and socially. The desire for a return to a mythical ”national model” is simply to support the current situation where the more economically powerful nations dictate the rest: only soon the club of ‘the most economically powerful nations’ may no longer include any European members.
The European citizens must see the legitimation crisis of European governments for what it is: the expression of a longstanding crisis that was covered over by the promise of wealth. We could say that the first victim of the economic crisis is democracy itself, but it would be more accurate to say that the economic crisis was brought about by a failure in democracy. The response must therefore insist upon democracy above all. In the occupy movements as well as other forms of citizens’ mobilisation, we have seen that many citizens understand the need to reinvent democracy at the same time as they demand a reinvention of the economy to a more equitable form.

Where the nation states and elites no longer see their interest in upholding the European household, the citizens must occupy. For the European construction, whatever its shortcomings and betrayals over the past years, offers the potentials for the foundations of a new and more democratic form of society fit for the 21st century: one that is based on solidarity and collaboration, not competition and exploitation, one big enough to regulate flows of global capital and build an alternative economy within itself which will influence the world.