I was recently reading an article in the FAZ which to a significant degree represents the core of the problem we in Europe are still facing, as we go into this New Year. The problem which has lingered since 2010 at least, has now manifested as a threat which we to the left of the centre ground can no longer afford to ignore. 2016 was rough; 2017 has the potential to be no doubt rougher still.

The commentator in the FAZ, Dominik Geppert, was critiquing the proposals of a German academic to save the eurozone from almost certain disintegration. In short, Herr Geppert does not believe the creation of a political and fiscal union to buttress the Economic & Monetary Union is the right course to be considering, if we are in fact to save the euro (and, I would add to that, the entire Union). This proposal of fiscal and political union, made by Emeritus Professor Claus Offe, as a means of re-balancing the burdens and responsibilities of actors in the eurozone, and in doing so constructing a redistribution mechanism at the Union level which could deliver something concrete for the average European, is, for Geppert, a proposal which relies on false assumptions and a poor understanding of history. It suggests that Europe, of significant diversity, can be bound together perpetually with political will. Instead, to provide lasting stability to the monetary union, the eurozone needs to be allowed to gradually converge.

I ultimately disagree with the above assessment by Geppert, even if I allow that he has made some important observations. But his counter-suggestion, to keep things exactly the way they are, hold steady the ship, and stay on course come what may, is a dangerous illusion if anyone actually thinks this is still a viable path. This kind of German orthodoxy is something we should dispense with immediately a fantasy and nothing more; Europe can no longer afford to wait.

The past year has come as a blow to many of us liberal-minded Europeans. We have found ourselves on a one-way trip back to a 1930s and all the toxic politics and flawed economics which plagued it. However, it seems not all have come to realise that the way out of this mess will be different from the way we came in. What do I mean by this? Well, there are some who believe the re-election of Angela Merkel will save Europe from the precarious slide in which it has found itself. They see her as the last standard bearer of the old liberal order which has seemingly crumbled after the Brexit vote and Trump, and note that, of the leaders of the Western World, she will soon be the last one standing. They are, nevertheless, wrong.

Matthias Matthijs made this point in a recent article in Foreign Policy, that in fact, a re-election of Merkel would, as the Geppert argued in favour of above, only perpetuate the status quo; in other words the status of disintegration. He points out that of the 4 crises that have plagued Europe since 2010 (Sovereign Debt, Ukraine, Refugees and Creeping Authoritarianism in Eastern Europe), she has mishandled all of them, without any broad strategic vision or priority given to the European interest. For me, the most painful of these has been Merkel’s attitude towards Europe’s economic crisis; she has been a symbol of German orthodoxy and sticking to painfully out-of-place rules, also known as ‘extend-and-pretend’.

Germany’s insistence on sticking to the rules can be likened to a House of Cards: the EMU was as fragile and prone to collapse as a house of cards for one. Secondly, a house of cards relies on nobody and nothing touching it – the slightest breeze could knock it over. So, before such an edifice collapses, preventing its collapse by sticking to the rules of not touching the house of cards makes sense. Once the house has collapsed however, to not touch the cards, and amend the previous rules, is the absolute worst course of action to take. Adhering to the rules and not touching the cards now leaves them in a pile, and no amount of political will or adherence to rules will raise them up back. In the eurozone’s case, the rules were fiscal discipline, low interest rates and stable inflation and exchange rates. Sticking to these rules was important while the house of cards was still standing, however, once it had collapsed, they are not only redundant but also counter-productive.

It’s important to be clear; the fact the eurozone is currently a house of cards is disastrous and was known to be by many from the beginning. The fact it was so unstable and had rules which would make it almost impossible to rebuild after a crisis was at best shortsightedness of monumental proportions. If Europe is to maintain its single currency, the old rules and the old design will have to go. Matthijs understands that for this to happen, Merkel will have to go, particularly, the Grand Coalition politics which have dominated Germany since 2005, with a short break between 2009 and 2013. If anyone wants to know the price of continued Grand Coalitions, simply look at Austrian politics, where neither the centre-right nor centre-left establishment party were in the second-round run-off for the office of the President this year. Matthijs’ alternative? Red-Red-Green, a coalition between the SPD, Greens and the far-left Links Partei. Recently, such a government was formed in Berlin, christened the Breites Linksbündnis in the press.

A left-wing government will be especially important in Germany if a left-leaning candidate wins the French Presidential elections in April/May. Wolfgang Münchau was recently musing about the novelty of the French presidential race in an article in the FT on Sunday. Interestingly, French politics is currently offering three distinct alternatives to voters, with Emmanuel Macron, François Fillon and Marine Le Pen all offering clearly delineated strategies. The Socialists will bring their man into the fray later in January, once their primary is finished. From this contest, I personally am hoping for Arnaud Montebourg to emerge victorious, for that will give the French four credible alternatives to the status quo which grows more stale by the day. Montebourg is calling for an end to Sparpolitik in southern Europe, and hopes to change the economic landscape of the eurozone in the process. Macron wants a more institutional solution to the monetary union’s current malaise, in creating the fiscal and political union spurned by Geppert earlier. Federalists may prefer the institutional solution over the Keynesian one, however for those who actually care about the outcomes of our politics, we have to recognise that an institutional transformation will only provide an alternative to austerity if it is supported by the anti-austerity ideas which Montebourg is championing. As we know, Le Pen wants to burn it all down. Of the four, Fillon is the most status quo candidate; regarding Europe, he has few ideas and opposing austerity or building new European institutions certainly aren’t among them. At home, Thatcherite market-fundamentalism is the order of the day. In some ways, Fillon presents the biggest threat to the Union of them all. He is France’s Merkel.

Unfortunately for France, the political winds appear to be blowing in a neoliberal direction overall, with Macron also supporting a deregulation of French business, slashing of corporate taxes and loosening up the labour market, though not as extremely as Fillon. I fear that in challenging this, Le Pen’s rhetoric will resonate more strongly than anything the Socialists can produce – its leadership became distrusted long ago and weak even before then. Germany’s political landscape isn’t looking much more promising. The likelihood of Matthijs suggestion prevailing, and the left coalescing rather than fragmenting further seems pretty small. There is a hope that Merkel will rely on the SPD again for her to form a government; a fools hope that the SPD will turn left rather than right. By my reckoning, for 2017 to be counted as a resounding victory, both a left-wing President in the Elysée and a left-winger in the Kanzleramt will be necessary to change Europe’s course, and for the discourse on the eurozone to dramatically shift.

As a reader of history, I know very well that everything has its time. As a politically engaged citizen, I am one to say that change is something to be welcomed from the old world order that has prevailed for the last 40 years or so; unfortunately, the change we saw last year was the wrong kind of change. I do not believe that we should defend the liberal world order as we knew it before 2008, now crumbling around us. But if we want progress, giving in to the ideas and rhetoric of the far-right is the wrong choice. To achieve that progress, trying to restore the status quo or defend the last bastions of the old order, the objectives many have tied to a Merkel victory next year, has to be rejected. When the opportunity to turn comes, we have to take it.

Sources: FAZ, FT, FP