Solidarity in the European Union, Germany in 2022 and Greece in 2010*
By Philip Sahinidis
The successive crises of the last twelve years have led the EU countries to review and revise many of the options of the past to ensure its cohesion: From the supervision of financial markets and the role of fiscal interventions in recessionary conditions to the adoption. health sector in the years of the pandemic.
Today the EU and its cohesion are being tested again because of the energy crisis. Russia uses the energy dependence of EU countries as a strategic weapon in order to achieve its goals in Ukraine and possibly in the EU itself. The intensity of the current crisis is due to choices made by Germany in the distant past. In order to pursue cheap energy for its export industry it overlooked the risks of energy dependence on Russia.
On the occasion of the cut in the flow of natural gas from Russia to the EU countries, which mainly endangers the German economy, the political leadership of this country asked for the solidarity of the rest of the EU countries. German Chancellor Olaf Scholz with the statement he told him that everyone is affected by increases in the cost of energy and one cannot claim that this issue affects only a few countries (Financial Times 22 July 2022).
These statements were made on the occasion of the reactions expressed mainly by Spain and Portugal to the Commission’s initial proposal for a voluntary cut in natural gas consumption by 15% in the next eight months compared to the average consumption of the last five years. A cut which, according to the Commission’s original proposal, could become mandatory.
Olaf Solz’s argument – proportionally – is identical to the work of Greek Prime Minister George Papandreou in 2010. At that time, Greece was asking for EU solidarity saying that the financial crisis started in 2008 by the USA does not only affect Greece – despite the mistakes in its economic policy before 2009 – and it will soon spread to other EU countries.
Then the EU was too late to react. When he finally took initiatives he used strict measures for Greece to avoid moral hazard from future lapses in compliance with fiscal rules. The result was that Greece and its citizens suffered the consequences of a long-term crisis, while other EU countries were subsequently led into economic adventures.
The arguments of Germany and its “frugal” allies in 2010 that Greece was living beyond its means and therefore the EU has no obligation to bail it out, Spain’s applications today to avoid implementing its initiatives. In an open letter to the European Commission, the Spanish Minister for the Ecological Transition, Teresa Ribera Rodríguez, opposed its proposal, saying:
Solidarity must be at the core of the Commission’s proposals to secure energy supply. However, this cannot be done without assessing whether it leads to an unequal distribution of burdens between EU countries. Unlike other countries, Spain, in terms of its energy needs, did not live above its means all these years .
Countries that are actively much less dependent on Russia, using the arguments of the “frugalists” of 2010, are in turn trying – on the basis of moral hazard and unequal burden-sharing – to justify their reservations on Germany’s call for solidarity . .
A move that would solve, to some extent, the problem of meeting Germany’s energy needs, would be to reconsider the decision to shut down nuclear plants for electricity production. These are scheduled to close at the end of 2022. If the proposal to extend their operation is accepted, Germany’s governing coalition risks falling apart. The closure of nuclear plants is at the core of the programmatic positions of the Green party. A retreat by them on this issue that created intense existential problems.
The aforementioned shows that the concept of solidarity between member states referred to in Article 2 of the EU Treaty receives a different interpretation in each crisis. The content of solidarity – as experience shows – is usually not determined by the EU Treaty but by the national priorities and interests of the countries.
In the last twelve years, the EU has a history of a deficit in the practical manifestation of solidarity. In 2010 with the crisis in Greece and in 2015 with the refugee crisis. However, it also has options such as the initiative for the joint supply of vaccines and the creation of the Recovery and Resilience Fund that the EU can move in the right direction.
At the present juncture Germany and its frugal allies may better understand the need for an institutional solution to the question of the interpretation of the concept of solidarity. It is right that there should be solidarity now because otherwise the cohesion of the EU will be at risk and Russia will achieve its goals. However, it is necessary for the European Commission to proceed with an institutional interpretation of the concept of solidarity.
Otherwise in every crisis we resort to ad hoc interpretations of it. To establish if and when the solidarity should be done, to create a permanent mechanism in the EU to support the countries in crisis conditions and how the burdens should be distributed between the countries. This will be the most effective response to Euroscepticism but also to the rise of populism that threatens democracy and the prospects for further integration of the European project in a period of rapid geopolitical and geoeconomic rearrangements.
The article was published on liberal.gr on August 8, 2022
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