Master’s Degree programme – Second Cycle (D.M. 270/2004) in International Relations Final Thesis The European Union between the dream of integration and the specter of dissolution Supervisor Ch. Prof. Francesca Coin Assistant Supervisor Ch. Prof. Duccio Basosi Graduand Carlo Geromel Matriculation Number 826761 Academic Year 2015 / 2016 Index Introduction.......................................................................................................................5 Abstract.............................................................................................................................7 1 The European integration process 1.1 The early post war period.................................................................................13 1.2 The Coal and Steel Community, the Euratom and EEC...................................19 1.3 The EEC Enlargement......................................................................................24 1.4 The slow road to the EMS and European Union..............................................28 1.5 The Europe of Maastricht.................................................................................32 2 The financial crisis and the age of austerity 2.1 Road to crisis....................................................................................................42 2.2 Europe caught in the grip of austerity and ordocracy......................................49 2.3 The role of Germany, the ECB and the euro....................................................60 2.4 A currency area without control.......................................................................70 2.5 Southern states and the effects of the euro entry..............................................73 3 The specter of the European Union disintegration The effects of the Europe of Maastricht and austerity on politics...................................83 3.1 The effects of austerity on politics...................................................................86 3.2 Economy over politics. The lesson of the Greek case.....................................92 3.3 The radical right new wave and the risk of balkanization.............................104 Conclusions....................................................................................................................112 Bibliography...................................................................................................................115 Introduction With this research I have analyzed the events that caused the European crisis of recent years. The ordoliberal architecture chose with the Maastricht Treaty, the imbalances between the union and the authoritarian answer to the 2008 crisis produced collateral effects for the health of the European Union. I chose to investigate this topic because I wanted to understand clearly what were the endogenous reasons that brought about the framework that has developed in these last years. I chose to study the contemporary events in order to add my contribution to the analysis of an historical process. I hope that in the future my doubts and the ones of those I consulted will be transformed into certainties. I have always thought that walls of cities talks to us. Last year I traveled the Balkans and in many towns I found the slogan “protiv Evropske Unije”, that literally means “no to EU”. Only later I realized that in each part of Europe the mistrust of the integration had already developed and I wanted to investigate why. Also one year ago I went to Frankfurt to demonstrate against the European Central Bank. I had a general idea of the reasons why I was there. Only with this research I understood completely what we claimed. In the first chapter I completely used academic works to reconstruct the integration process and I tried to compare the different points of view of the various authors. On the second I preferred to use authors with critical visions. For the third part, I used both academic literature and interviews (Primary research) and articles, that helped me to comprehend the positions of the single authors I considered. I used both the opinion of academic figures (Secondary research) and the idea of political subjects. In this chapter I compared and mixed the opinions of academic authors and members of social movements. In the first part I analyze the juridical and historical process of the European integration, from the end of the World War II until the Lisbon Treaty. The main actors, the positions that clashes during the negotiation, the divergences among states and the different enlargement. The enthusiasm with which founding fathers unified Europe but on the contrary the elitism that affected this project. I underlined the fact that the Europe of Maastricht created an order in which the supremacy of economy is imposed on the choices of governments. What really matters for the stability of Europe is not people wealth or 5 the level and the quality of employment, but the price stability, the control of inflation and the reduction of public debt. Then I underlined the economic and financial problems that produced imbalances among countries. The role of the European institution and their guilt in the choice of the policies adopted for the monetary union. The austerity measures that produced always more unstable contexts within member states, especially in Greece where the government was defeated by the threat of bankruptcy. The most popular narration of the sovereign debt crisis blamed governments for their laxity when, most of time, it was created by the inefficiency of private companies and financial institutions. Indeed, corruption, waste of public funds and nonrigid control on the effective use of state money contributed to enlarge the debt. Anyway, what most brought countries to the real indebtedness was the capitalization of private banks hit by the Wall Street crash. This produced an enlargement of the gap between “core” countries and “peripheral” ones that already existed before. The imbalance among these states was created because of the misbehavior of core governments that adopted expansive monetary policies. With austerity measures that cut public spending and structural adjustments that imposed liberalizations, European elites try to transform peripheral countries into supply-driven economies. The same thing Berlin did in the past. In the third chapter I have described the political situation after the crisis and the imposition of fiscal rigor on indebted states. The penalization of traditional social- democratic and liberal parties that have pave the road to new forces that contest the role of the European Union. With the attempt to create supply-driven economies all around Europe, or to create a cohesive big European supply-driven economy, the level of wealth was undermined. Austerity measures produced poverty, unemployment and precariousness. In this context movements that condemn the role of the euro and of the European institutions, that promote the return of national currencies and of national ethnic borders have developed. In front of the ordoliberal oppression, the alternative that became more popular is the comeback to nation state order, and sometimes it is the only clear alternative that can be understand by the lower and middle classes of Europe. 6 Abstract The European integration process began after the Second World War with the goal of uniting European countries and to avoid once and for all any form of armed conflicts among different states. This was the aim that founding fathers wanted to achieve, a Europe based on cooperation, brotherhood, integration of cultures and peoples, principles that European governments never applied until that moment, since the fact that nationalism was the predominant ideology to which states referred to and that caused two wars within the European continent. “A free and united Europe is the necessary premise to the strengthening of modern civilization, for which the totalitarian era represented a standstill” wrote Alterio Spinelli and Ernesto Rossi in the Ventotene Manifesto, still during World War II. But the post-war period geopolitical global changes influenced the European project, especially the bipolar order and the contrast between USSR and USA. In fact, according to many, the reconstruction of Europe and the following integration process was more a plan orchestrated by the US establishment than the real will of Europeans to unite themselves. The Marshall Plan and the Organization for European Economic Co-operation looked to Washington as a way to recover European markets and extend the American economy to the other side of the Atlantic Ocean, in the meanwhile NATO was established in order to create a mutual defense alliance. In fact, if Nazi Germany was defeated with the common help of nations, after the war the new enemy became Communism and the world that stood behind the Iron Curtain. The possibility of a contagion of western European countries was very high, even because in Italy, France and in Greece there were strong communist parties that in the early years could have won the elections. That is the reason why US governments boosted the recovery and the integration of western Europe, as a method to create a democratic and liberal pole based on free trade in contrast to the communist area of USSR, Warsaw Pact and Yugoslavia. The USA saw in the European project also the possibility to export their example in terms of economic integration; in other words, according to liberal theories, a larger market without constraints for