By Bruce Stokes, Special to CNN
Editor’s note: Bruce Stokes is director of global economic attitudes at the Pew Research Center. The views expressed are his own.
The Great Recession and the ensuing euro crisis have wreaked havoc with the European economy and now threaten to undermine the European Union itself. As Washington prepares to begin negotiations with Brussels on a U.S.-EU free trade agreement, America’s European partner has never been weaker. Europeans’ lack of faith in the European Project and the fissures that have emerged in European public opinion between the French and the Germans bode ill both for efforts to revive the European economy and for effective transatlantic cooperation in the near future.
Support for European economic integration – the idea that if nations lower their trade and investment barriers they will all be better off – is down over the last year in five of the eight European Union countries surveyed by the Pew Research Center in March 2013.
Fewer than a third of Europeans surveyed now think European economic integration has strengthened their economy. This includes just 11 percent of Greeks and Italians and only 22 percent of the French, the latter two citizens of founding members of the European Community. Since the fall of 2009, meanwhile, support for a more integrated European economy has dropped sharply: by 21 points in France, 20 points in Italy, and 16 points in Spain.
By Nicholas Walton, Special to CNN
Editor's note: Nicholas Walton is the communications director of the European Council on Foreign Relations. The views expressed are his own.
From outside, Europe looks the same as ever – more riots on the streets of sunny Southern European countries and a niggling sense that the Old Continent is still failing to face up to an existential crisis. From inside, the situation is certainly more complicated – and potentially far scarier. Not only is the crisis still very much alive, but it seems to have moved into a third and very worrying phase.
First we had a banking crisis; then we added a sovereign debt crisis; now we also have a political crisis, and one that strikes to the heart of what the European Union was designed to achieve.
Think back a few years to a time when Greeks and Spaniards (not to mention the Portuguese and many, many others) did not routinely head to the streets or go out on strike to protest against the personal disasters that many of them now face. Back then, the European Union brought the promise of a new model of international association that swapped the primacy of the nation state, via the surrender of a fair chunk of sovereignty, for a new way of doing things. At its core were the largest single market in the world and a belief in liberal democracy that united the people of (eventually) 27 member states, with others drawn in by the EU’s powerful magnetic field. The euro was another plank in the long road towards integration, and the Schengen zone of passport-free travel was another proud boast. Then the crisis hit, and the “project” has been creaking ever since.
By Jan Egeland and Judith Sunderland, Special to CNN
Editor’s note: Jan Egeland is the Europe director of Human Rights Watch. Judith Sunderland is senior Western Europe researcher and author of the new Human Rights Watch report, “Hate on the streets: xenophobic violence in Greece.” The views expressed are solely those of the authors.
“I realized it is so easy to die here. We came from so far away and it is so easy to get killed here,” Ali Rahimi, an Afghan asylum seeker, told us after he was stabbed five times in the torso in September 2011.
Ali is just one of many victims of violence in Greece. Amid the economic crisis and rising social tension, migrants and asylum seekers have become the targets of xenophobic rage. While researching our latest report we spoke to dozens of foreigners, including two pregnant women, who had been beaten, kicked, dragged off buses, and chased down the streets of Athens in recent months. Since late May alone, the media have reported seven brutal attacks. But many, like our Somali interpreter Saleh Ibrahim, whose hand was broken in an assault in late June, never report the violence.
Editor’s note: Will Marshall is the president and founder of the Progressive Policy Institute. The views in this article are solely those of Will Marshall.
By Will Marshall, Special to CNN
Despite all the attention lavished on the Greek election, the outcome barely registered in Europe’s financial markets. Everyone knows the eurozone’s fate won’t be decided by the shimmering Aegean Sea, but in drizzly Berlin.
Germany is the key, but it’s torn by conflicting impulses. As the main engine of European economic integration, Germany is determined to preserve the 17-nation eurozone. But as Europe’s lender of last resort, it’s loath to bail out countries that took advantage of the euro to borrow extravagantly and live beyond their means.
To avoid such “moral hazard,” German Chancellor Angela Merkel sternly insists that Greece and other debt-ridden nations, notably Spain and Italy, commit to stringent fiscal discipline in return for the loans they need to service their enormous debts and pay their bills. Greek voters were incensed by these Teutonic demands for spending cuts and tax hikes, but they narrowly chose to stick with the euro rather than risking a “Grexit” from the eurozone.
What the “Club Med” countries really need, however, is not a morally bracing dose of austerity, but the kind of structural adjustments that Germany itself undertook — during its “Third Way” phase — to meet the challenges of globalization. The fundamental problem isn’t that these countries are profligate, though some have been. It’s that their economies are uncompetitive, a reality masked until now by a strong common currency.
By Paul Ames, GlobalPost
As Band-Aids go, the 100 billion euro "bailout lite" for Spain looks pretty impressive. But it could be less than a week before the euro zone is confronted with its next existential threat.
Saturday's announcement of massive European aid to Spain's beleaguered banks led to an exuberant market opening on Monday morning. But rescue-weary investors quickly began fretting about the bigger picture — namely, a huge addition to Spain's debt burden. As the euphoria dissipated, European stock markets generally closed down on Monday, and interest rates on Spanish and Italian debt rose sharply.
Expect markets to drop even more next Monday, if Sunday's election in Greece leads to a far-left victory that opens the door for a euro departure.
Spain's rescue immediately became a factor in the Greek election campaign. FULL POST
Everyone is worried that Greece might default on its national debt. That's really not news. By one estimate, in the 180 years since it gained its independence from the Ottomans in 1832, the country has been in default or restructuring for half this period. The news is that this time, Germany is willing to bail Greece out.
Throughout the euro-zone crisis, it has been conventional wisdom to regard the Germans as narrow-minded, ungenerous and dogmatically wedded to prescriptions of austerity to treat Europe's problems. These criticisms are vastly overstated.
Everyone is worried that Greece will default on its national debt. That's really not news. By one estimate, since it gained its independence from the Ottomans in 1832, Greece has been in default or restructuring for half this period. The news is that this time, Germany is willing to bail it out.
Throughout the euro-zone crisis, it has become conventional wisdom to regard the Germans as narrow-minded, ungenerous and dogmatically wedded to prescriptions of austerity to treat Europe's problems. Those criticisms are vastly overstated. Consider that Germany is being asked to take its taxpayers' money–in a democracy–and use it to bail out a country like Greece, which is guilty of mismanagement, poor competitiveness and financial fraud. And it has said yes! In return for this, Germans are being called Nazis in Greek newspapers.
Can a president who's elected on a promise to be normal deal with Europe in the throes of a crisis of abnormality?
With France's Francois Hollande taking office, an all-star panel debates "Mr. Normal" and how the politics will reverberate across Europe in this excerpt from the past week's "Fareed Zakaria GPS." Watch the video above.
And is Germany taking too much of the anger? Here's what Josef Joffe, Die Zeit editor, had to say:
ZAKARIA: Josef Joffe, you know that much of the rhetoric and the anger is directed at Germany. The idea is the Germans are forcing all this austerity on Europe, European governments having forced to cut their budgets. It's causing misery, unemployment. It's even causing bigger budget deficits.
But you've sort of defended the German position, isn't it fair to say?
JOSEF JOFFE, EDITOR, DIE ZEIT: Well, I mean, Angela Merkel makes for a nice whipping boy for problems which are deeply rooted in the societies that we've just heard about [France, Greece, Spain]. ... FULL POST
By Paul Ames, GlobalPost
It was the scenario never to be named — a prospect so terrible that the mere mention of it would conjure up doom and destruction for the eurozone.
In the last few days, however, the risk that Greece could be forced out of the currency bloc has become too real to be ignored. The once-taboo subject has become an unavoidable topic of conversation among Europe’s financial leadership.
By Tim Lister, CNN
Greece may have given us the word democracy and many of the principles of civil society. But now it is "the sick man of Europe," and the people of other European democracies are asking whether it's worth saving with billions more dollars of their money. Put crudely, their argument is this: So what if Greece slides ignominiously out of the eurozone? FULL POST
The U.S. economy is currently on autopilot: A sharply polarized Congress and a tapped out Federal Reserve can't do much more to stimulate it this year.
But the economy may still hit turbulence after voters in France and Greece delivered a resounding anti-austerity message over the weekend to their governments.
That message, say analysts, is likely to have implications for the United States that extend from its fragile economy to its planned withdrawal from Afghanistan.
Hollande swept to victory Sunday, becoming France's first-left wing president since Francois Mitterand left office in 1995.
That was followed by news that voters in Greece dealt major blows to the country's two most established parties in parliamentary elections, leaving no party with anything approaching a majority.
The message from voters in both countries appeared to be the same: The current policy of deficit-cutting, reduced spending and cuts to benefits and public services is unacceptable.
The election results leave in question what happens now to the eurozone and its debt crisis. France is a key player in plans to navigate it. And Greece is a recipient of bailout by the European Central Bank that requires the government to slash spending.
Editor's Note: The following is reprinted with the permission of the Council on Foreign Relations.
Bank of Greece Governor George Provopoulos warned Greek political leaders that if the country were to abandon its strict austerity path following general elections on May 6, it could potentially force Greece to leave the eurozone (WSJ). His call comes amid mounting social unrest in Greece over government cutbacks and fierce opposition to the second EU bailout program agreed to by technocratic Prime Minister Lucas Papademos last month. The unrest is indicative of a larger EU debate over the balance of austerity and growth measures needed to combat the ongoing eurozone sovereign debt crisis. Meanwhile, the Greek central bank predicted the economy would contract by around 5 percent for 2012. FULL POST