26 June 2012. The European Union’s economic and monetary policy is suspiciously reminiscent of the Rocky Horror Picture Show. In the refrain of the “Time Warp” song, it says “It’s just a step to the left. And then a jump to the right.” Whereas on stage this start of a leap in time is a reason for being performed and applauded time and again, it simply dissolves into laboriously concealed stagnation in the reality of European policy-making.

Well, not quite. Even though we are daily horrified by the squabbles, polemics and seeming sideways movements instead of steps ahead, the EU has for a considerable time no longer been where it was at the time of the decision to become an economic and monetary union in 1989. Two examples will suffice.

Stability pact and risk monitoring
Firstly, the stability and growth pact, which was introduced at the insistence of Germany and then ignored first by Germany, with its limits to indebtedness fixed by rule of thumb, has been given more bite by new European ordinances. However, what is meant to improve monitoring procedures also gives more power to the European level. From now on, it will take a qualified majority of member states to prevent the EU Commission from interfering in the government of any national field of policy with the objective of balancing macroeconomic differences.

Secondly, the structure of risk and financial monitoring has been significantly extended in the last few years. For macroprudential concerns, there is the European Systemic Risk Board; for microprudential aspects, the trinity of the European Insurance and Occupational Pensions Authority, the European Banking Authority and the European Securities and Markets Authority was set up.

What is substantially more visible than the many-layered mechanism of financial supervision on the European stage, however, is the euro bailout fund, which is the centre of attention. It is not only a brief formula for verbal monsters in the EU fashion (keyword: European Financial Stability Facility) and for the increasingly less transparent complexity of Europe’s institutional structure. Primarily, it is meant to provide five countries with protection from the caustic movements of the financial markets from this week onwards.

The politics of small steps
All in all, step-by-step political decisions and institutional changes in the direction of a stronger European level thus appear to be the maximum permitted by the differing interests of the Netherlands and France, Finland and Greece, Slovenia and Portugal, and Germany against all of them. So far, this has proved of very little help for finding a way out of the crisis.

In more recent times, more and more voices have also been raised which according to the motto “now or never” want to subject the elite project of European integration to a democratic fresh cell therapy through recourse of the voice of the people – undoubtedly a venture that has long been overdue. Yet it may be doubted that the EU’s most serious crisis is the right time to solve the fundamental problems of its democratic legitimation.

“Time warp” for the EU summit
What, then, can be expected of the day when the heads of state and government meet for the umpteenth time – albeit with different personnel on the French and Greek sides? A time leap in European integration in the form of a banking, fiscal or even economic union?

We are very likely to be pleased if instead of the daily Rocky Horror politics of “Let's do the Time Warp again!” a clear signal along the lines of Churchill’s famous “Let Europe arise!” were to be emitted by the European summit. This would have cult potential, but only if the joys and sorrows of proposed political solutions were explained to Europe’s citizens in a comprehensible manner.

Photo: Photocase / Krockenmitte