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Column: The European Union's unending quandary

By John Lloyd

(Reuters) - The pace of European disintegration continues to quicken.

Recession deepens in the 17-member euro zone. It is now the longest downturn since the currency was launched in 2000.

In Italy, a new left-right government, launched on an anti-austerity program, finds the neighborhood more austere than it had hoped.

In France, Maurice Levy, boss of the advertising giant Publicis, did a survey showing that northern Europeans - Poles, Germans, Brits - were moderately optimistic while southerners - Spaniards, Italians, Greeks and the French - were deeply pessimistic. France dipped into recession earlier this month, for the third time in four years.

The union is pulling apart. Nothing brings relief.

In the Netherlands, a TV show persuaded the country's deputy finance minister, Frans Weekers, to watch clips of Bulgarians boasting about how they had defrauded his country's government of welfare benefits. Bulgarians and Romanians, the poorest members of the European Union, will be able to move to any state in the EU next year. What had been presented to the poor as a new freedom is now an imposition for the rich.

Those who have been most enthusiastic for the union now proclaim that it is in grave danger. In an interview earlier this month the financier and philanthropist George Soros said European leaders, in trying to find exit routes from the crisis, have "generated political dynamics that are leading toward the EU's disintegration."

"Euro-skepticism" - Euro-fury is more like it - has grown. A survey by the pro-EU European Council on Foreign Relations (ECFR) shows that:

"Since the beginning of the euro crisis, trust in the European Union has fallen from +10 to -22 percent in France, from +20 to -29 percent in Germany, from +30 to -22 percent in Italy, from +42 to -52 percent in Spain, from +50 to +6 percent in Poland, and from -13 to -49 percent in the United Kingdom."

The ECFR sees the crisis as rooted in a "clash of wills" between northern and southern states - with the richer north no longer willing to pay down the debts of others without tight controls, and the southern countries resenting the call for centralized control of budgets, taxes, pensions and the labor market.

"Europeans now know," writes Levy of Publicis, "that none of us can count on others to resolve our local problems. It may take years before we manage to recreate a real sense of union that can carry Europe into the future."

British Prime Minister David Cameron is under pressure from the many in his Conservative Party to remove the UK from the EU. But he has embarked on a strategy that argues for fundamental reforms, mainly in the direction of returning powers taken by the EU to the nation-states. Other leaders, most obviously German Chancellor Angela Merkel, now take at least part of his point.

Left and right now propose different reforms. A German-inspired "manifesto for rebuilding Europe from the bottom up" is supported by, mostly, professors of the left led by the political scientist Ulrich Beck. Its call for the unemployed, the young, pensioners and low-paid workers to realize their European-ness (rather than protest against it) is good-hearted. But it's undercut by the demand, apparently without irony, that the elite institutions - the European Commission, European and national parliaments - "create a Europe of nationally involved citizens": the top down enabling the bottom to come up.

On the right, also in Germany, professors of the right have formed an anti-Euro party, the Alternative for Germany, which has signed up some 12,000 members but has so far attracted only some 3 percent of voters. Broadly, the right wants less Europe, the left wants more "Europe."

The problem, underneath the dreary economic figures and the alarming spikes in unemployment, is democracy, and the lack of it.

Pro-Europeans in every country - especially in what had been the motor of the union, the Franco-German alliance - would, off the record, quite cheerfully admit this was an elite project, but one conceived and implemented for the common good. It was formed to make another great European war impossible - and it remains inconceivable. It stimulated very large amounts of common action, common regulations, common approaches to problems. Its finest hour was in giving the former communist states that broke free from Soviet hegemony in the late 1980s an example and a challenge.

But the elitism of the project has been exposed, and at a time of adversity it becomes a handy target. The absence of democratic accountability and engagement of ordinary folk meant the elites felt free to accelerate the development of a more and more integrated union, of which the euro has been the largest innovation. Now, for many states, it's the largest burden.

The union will survive only by becoming minimalist. Europeans - who are first of all Germans, French, Italians, Poles, Brits and others - may distrust their politicians, but they know them. They know their faces, their backgrounds, their accents, their tricks, their virtues. They will not - cannot - transfer that loyalty to those they do not know. They will not allow them to make decisions on how to spend the taxes citizens pay. The creation of a more integrated Europe - which sooner or later will look like a state, act like a state and thus be a state - has to be a process of small steps. Or it won't be much at all.

(John Lloyd is a Reuters columnist but his opinions are his own.)

(John Lloyd co-founded the Reuters Institute for the Study of Journalism at the University of Oxford, where he is Director of Journalism. Lloyd has written several books, including "What the Media Are Doing to Our Politics" (2004). He is also a contributing editor at FT and the founder of FT Magazine. )

(John Lloyd)

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