Euro crisis: “Slowly the public is being softened up for historic change.”

While the euro crisis rumbles on, and with Frau Bundeskanzlerin promising that “We will do what is necessary, everything else will be discussed step by step”, the BBC’s Europe editor, Gavin Hewitt, wonders “what democracy in Europe means”…

If the eurozone group of countries heads towards fiscal union then a further question will surely follow. Can you have fiscal union without political union?

Slowly the public is being softened up for historic change. President Sarkozy was not a lone voice when he said recently “the end of the euro would be the end of Europe”. Whether that is true, of course, is open to question. But it prepares the ground for explaining that after the Lisbon Treaty, which was intended to settle the dividing line between what belonged at national and EU level, another shift in where power lies is being contemplated. It is worth recalling that Jean Monnet, one of Europe’s founding fathers, once said that Europe would be “forged in crisis”.

We have not yet reached that point of another giant leap towards further integration. Much of this belongs in policy papers and in the ferment of ideas that a crisis produces. What is unclear is whether, if there were a lurch towards fiscal union, voters would get a say.

When at the end of last year a permanent bail-out mechanism was being discussed, Chancellor Merkel insisted that the new structure had to be supported by treaty changes. Huge effort went into ensuring they could be called “limited” to avoid referendums; vox populi is seriously mistrusted in Brussels.

But what if the elites get it wrong? Some believe that the rise of populist parties across Europe is a direct result of leaders and officials ignoring the public mood towards immigration.

The economist Paul Krugman, who is a great admirer of what Europe has achieved, also notes that some of the mistakes made over the euro were because the architects of the single currency were engaged in “magical thinking”.

On the streets of Europe young people are frustrated and bitter, particularly over unemployment. Many see a lost generation without any certainty of work and facing the prospect of a future less prosperous than their parents experienced. Their protests are currently directed at their governments, although I have heard voices raised against the EU and the IMF. It is an interesting question what democracy would mean to them in a Europe of “ever closer union”.

Now, as I said, we may be getting ahead of ourselves. Only a couple of months ago Mrs Merkel’s office said “there are no plans and there is no desire for a joint fiscal policy”.

But the story of this crisis is how quickly lines in the sand are ignored.

Read the whole thing.

Pete Baker