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New Euro twist: A summit with a general strike

On the eve of a crisis meeting in Brussels, new data underlines the darker possibility behind the endless political wrangling: a lost generation of young people.

What if they gave a summit in Brussels and everybody in Belgium went on strike? Well, that's pretty much what's happening.

What if they gave a summit in Brussels and everybody in Belgium went on strike? Well, that's pretty much what's happening. Matt Fikse

Belgium is a hybrid, in some ways like the European Union itself. Here in Brussels the distinction between French speaking Wallonia and Dutch speaking Flanders can't be missed as one moves about. It's important to listen when entering a shop to ascertain whether to gamely stumble along in French or blunder through in Dutch (before ultimately resorting to English, at which point all are greatly relieved).

Belgium has proven so indelibly divided in language, culture and politics that the nation went more than a year without a government before the sides grumbled up a coalition. Brussels serves as the Capital of Europe but it's a conflicted city that now resonates with the vast mix of crises facing the 28 countries (Welcome, Croatia!) of the EU: economic, political, and democratic challenges that threaten the prosperity, perhaps the viability, of the European Union itself. Riding the train in, the conductor's usual three-language patter included a fourth this time: German. Central bankers and Eurocrats are in town; time for another European summit.

On Monday (Jan. 30), the leaders of the European Union will hold an "informal" meeting here. The main agenda: high stakes end-game brinksmanship between Greece, its creditors, and the EU institutions holding the bailout checkbooks that may firestop a financial meltdown should Greece default and trigger a cascade of credit-default swaps around the globe.

On Friday evening (Jan. 27), Germany put forward a stunning proposal to Greece, demanding that the country "temporarily" hand over control of its national budgeting to the EU, essentially ceding sovereignty to federal Europe. Greece quickly and firmly declined but it remains to be seen how Greece gets worked out in Monday's meeting.

Greece is serving as the canary in the coal mine for other countries in the EU. If a nation agrees to turn over budgeting sovereignty, then a rubicon will be crossed. If Brussels gets control of one country's budget, why would it stop there? It's all part of the problem of how the Euro came to be.

The common currency was created without a way for individual countries to correct trade imbalances or deploy their own printing presses to try to tune their economies through targeting inflation or deflation. More than that, no real cultural union was created in the minds of Europe's citizens, so no true union of political interests came to be, just a currency managed in a German way that brought prosperity for most, for a while, until the associated imbalances grew to breaking points.

At this summit, Euro leaders are expected to agree on the "fiscal treaty" that was proposed last December in order to ratchet down deficits. But as German-style austerity-for-all fails to breathe life into stalling economies, it now becomes politically vital to be seen doing something more. So a second theme of Monday's meeting will be for leaders to be viewed as working not only for the bond markets but also on behalf of ordinary citizens. Expect great flourish with the announcement of a 22 billion euro package of mostly already-planned for and non-binding programs designed to promote employment and education.

That's a start but far more will be needed. One illustrative case: Spanish unemployment. Last Friday's data showed that Spain now has more unemployed youth (51.4 percent) than employed youth (ages 16-24) — a shocking statistic in modern times. Overall, nearly 1 in 4 workers in Spain is now unemployed. Employment data are only marginally better in Greece and Portugal. Fears are rising of an entire "lost generation" of young Europeans with no real prospects.

Whether the collapsing economy in Greece, stunning rates of unemployment, or disgruntled Belgians calling a national strike   on summit day to spite the Eurocrats, there are signs of increasing social and political unease across the EU.

Some among the Davos set believe that Germany and the European Central Bank will ultimately pay whatever price is required to prevent the Euro from disintegrating. Others are not so sure. All the while, public trust in pan-European institutions continues to fall as European leaders continue to proceed incrementally and endlessly, frustrating nearly everyone.


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Comments:

Posted Mon, Jan 30, 11:26 a.m. Inappropriate

It's hard to find good local reporting on the European fiscal crisis. Thanks Matt and Crosscut for filling the void. A good supporting article on the plight of Europe's young workers appeared in the Guardian this weekend: http://www.guardian.co.uk/world/2012/jan/28/europes-lost-generation-young-eu

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