The Single Currency, a tool providing spiritual momentum for European unification
Jacques Delors denounced the origins of the euro crisis in his acceptance speech when receiving his honorary Doctorate at the Catholic University of Paris on 24 November. Some extracts of his speech are given below.
When the people of Europe decided to move from the achievement of the Single Market to the adoption of a Single Currency, they were fully aware that this was a radical leap forward. The justification was plain to see: perfecting economic integration, making it easier for people to travel around and for capital to be transferred, strengthening the advantages of the European Union in its relations and negotiations with the rest of the world. (….) But the spiritual momentum given by the founding fathers of Europe did not go as far as removing the barriers of national sovereignty, nor reducing the weight of history and of different diplomatic traditions. Due to its power as a symbol and its accessibility, the Single Currency was able to participate in the spiritual momentum, however bizarre this might seem. After all it is by its very nature a common good, the fate of which determines not only the degree of the Union’s power but also the living standards and conditions of Europeans.
The spiritual dimension and the spirit of cooperation
In close liaison with the subject of this conference, I can never place too much emphasis on the link between the spiritual dimension and the spirit of cooperation. But the cooperation was – and still remains – the weakest link, and this explains to a large extent why the euro is in crisis. Given that the step to a Single Currency was not accompanied by the creation of a European entity responsible for its management, the success of the enterprise depended not only on the rules defined by the Treaty but – above all – on the will and the capability of the governments to steer their own policies in the direction of convergence. This was supposed to guarantee both solidity and stability for the euro, while also realising the social and economic objectives of Economic and Monetary Union.
Putting it in simple terms, the EMU was supposed to stand on its own two feet: one monetary, with an independent Central Bank, and the other economic, thanks to an efficient cooperation between the Member States. That is the reason why I argued strongly in 1997 for a pact to coordinate economic policies which, with its own rules, would have stood side by side with the monetary stability pact. This proposal was rejected. Nevertheless, during the first ten years of its operation, the Economic and Monetary Union still managed to achieve some commendable results as regards growth and inflation. But, the zone was not able to catch up on its backlog with regard to competitiveness, when confronted with competition from developing countries and the impact of American economic power.
A moral mistake
Around that time, in fact in 1998, I dared to use the phrase “the euro protects but does nothing to stimulate.” And I used to add “It even protects us from our stupid mistakes.” Put in another way, the responsible body, the Council of Ministers for the euro, saw nothing of what was coming; neither the exponential rise of the public debt, first in Greece then in other countries, nor did it notice the growth of private debt in Ireland, Spain or Italy. In other words, in the euphoria and the folly of financial neo-liberalism, we were looking in Europe at a distortion of the same type as the one experienced in the United States, on a quite different scale, which was to lead to this world-wide crisis.
I have always maintained that this was a matter of a moral mistake committed by the Council of Ministers, of forgetting the heritage of wanting to live and act together, precisely for the common good. Since that time, the euro has been teetering on the brink. Governments have not accepted this idea that moral responsibility entails political responsibility. For three years now they have either been intervening too late or they have taken too little action. And equally ominous, they shower us with declarations that are not coordinated, which only leads to the cacophony which gets the markets so jumpy, which feeds speculation and fills Europe’s citizens with worry and cynicism.
Hence we now have upsets in the institutions, the abandon of a working method which proved its success in the dynamic periods while Europe was being built, and, just recently, a seizure of power by the Franco-German duo. (…)
We as Europeans are only halfway across the ford. We have left the river bank of the old Europe undermined by its civil wars and under threat of loss of all its influence, and we are still trying to reach the other bank, that of a powerful and generous Europe which is a model both in its internal organisational methods and in its relationships. As for the world, it is moving away from the post-War river bank in order to reach in a disorganised manner, the other bank of the global village. Our ambition should therefore be to say a very clear ‘no’ to the moral and political decline and to recover our proper direction, that is to say, the true meaning of human activity. Without this spiritual momentum, nothing that is either grand or permanent can ever be achieved./p>
former President of the European Commission (1985-1995)
Founding President of the Notre Europe Foundation
Translated from the Original French
We would like to thank the Notre Europe Foundation for their permission to reproduce extracts of this speech in free translation from the French.