On Europe And The Future Of International Relations

Tyler Durden's picture

Authored by Rodrigo Serrano of Rational Capitalist Speculator,

Since the 2008 financial crisis the foundations of the global economy have been in repair, translating into a prolonged period of economic frailty. Against this backdrop, social and political tensions have increased between citizens and government, international institutions and governments, and individual nation states. This murky political environment is fertile ground for international relations theory to: produce a better understanding of the forces affecting these developments, as well as offer potential solutions to these increasingly apparent conflicts.

The European debt crisis remains the largest challenge facing the global economy. A negative resolution emanating from the world’s largest economic bloc would cause harmful ripple effects worldwide in global trade flows. More importantly, it could also mark a paradigm shift in international relations, dealing a critical blow to what has been a relentless trend towards liberalism since the end of World War II, while providing fecund ground for a resurgence in realist ideology. Interestingly though, constructivism may be at the forefront in explaining the current dilemma between the European core and its periphery. It is therefore important for officials and institutions in leadership positions to analyze the situation through a constructivist lens.

Given the fast-paced nature of the political situation in the Eurozone, it is important to invoke a constructive approach when analyzing the competing forces affecting the region. Presently, we are witnessing a clash between long-standing and embedded “regulative norms” versus relatively recent “constitutive norms.” Both classes are best defined in Margaret Keck and Kathryn Sinkkink’s article: International Norm Dynamics and Political Change. “Scholars across disciplines have recognized different types of categories of norms. The most common distinction is between regulative norms, which order and constrain behavior, and constitutive norms, which create new actors, interests, or categories of action” (Keck and Sikkink 1998, p.891).

In peripheral nations such as Spain, Greece, and Italy, long-standing social welfare systems have served to entrench a cohesive array of regulative norms among society commensurate with a distinctive and generous standard of living. Meanwhile constitutive norms, such as the desire to erase the horrid memories of World War II along with the desire for economic prosperity, converged in the mid-to-late 1990s to create the European Monetary Union (EMU). Ironically, the bloc’s defining characteristic, the Euro, is now the impetus of the current conflict between these norms.

“Whereas Germany, still staggering under the financial burden of reunification, impressively massaged down its labor costs, trimmed its welfare spending, and became competitive again, many of the peripheral countries allowed their unit labor costs to soar” (Garton Ash Sept/Oct 2012, p. 3). In order to resolve the crisis, labor productivity must improve and labor costs lowered throughout the periphery to better compete in today’s demanding global marketplace. This means that social welfare systems in these countries will need to be substantially curtailed. In essence, for regulative norms throughout the periphery, the Euro and kryptonite are akin.

The discordance of these two powerful sets of norms has given rise to political activist groups such as Los Indignados in Spain and anti-Euro protesters in Greece, respectably demanding a softening of austerity measures and in the extreme case, advocating an exit from the EMU altogether. Like the Arab Spring, these groups bring to light what Ann-Marie Slaughter calls The New Foreign Policy Frontier. “But [Hillary] Clinton herself insists that 21st-century diplomacy must not only be government to government, but also government to society and society to society, a process facilitated and legitimated by government. That much broader concept opens the door to a do-it-yourself foreign policy, in which individuals and groups can invent and execute an idea -- for good or ill – that can affect their own and other countries in ways that once only governments could.” (Slaughter 2011, p.1-2). The aforementioned groups are having an increasing effect on German and European Union (EU) policy, with Germany’s Christian Social Union party leader Horst Seehofer recently softening his stance on Greek austerity and Angela Merkel appearing more receptive toward Spain requesting aid without further conditionalities.

Moreover, the conflict of these norms increases the threat of internal war, which adds another layer of complexity to the tenuous balance of power between sovereign states versus the supranational organization that is the EU. “As such, free trade that jeopardizes a state’s key industries or allows potential adversaries to become relatively stronger may not be in a state’s interest even if the economy of the state gains in an absolute sense. Better to subsidize an inefficient group of producers than face the threat of a violent challenge to the regime” (David 1998, p. 89). In simple terms, core countries demanding further austerity from an already recession-wracked periphery should tone down their rhetoric and give these countries a much needed breather or risk an anti-Euro political faction upending all progress up to date.

While examining the current situation in Europe through a constructive viewpoint seems most prudent, it does not significantly discount realism as a viable alternative when analyzing the current state of affairs. On the contrary, realism remains an underlying force in the current precarious condition between the core and periphery nations. “The economic expert, dominated in the main by laissez-faire doctrine, considers the hypothetical economic interest of the world as a whole, and is content to assume that this is identical with the interests of each individual country. The politician pursues the concrete interest of his country, and assumes (if he makes any assumptions at all) that the interest of the world as a whole is identical with it… Laissez-faire, in international relations as in those between labor and capital, is the paradise of the economically strong. State control, whether in the form of protective legislation or of protective tariffs, is the weapon of self-defense invoked by the economically weak” (Carr 2008, p. 74).

Furthermore, beneath the veneer of constructivist analysis and potential solutions that such analysis may provide, lies the specter of a powerful resurgence of crude realist ideology. A negative settlement within Europe could lead to a fragmenting EMU in tandem with a significant reduction in the perceived power of a panoply of liberal-style institutions such as the European Commission, the European Parliament, the European Central Bank (ECB), and the International Monetary Fund (IMF); dealing a critical blow to a bedrock of Institutional Liberalism, one espoused by Robert O Keohane: “Collapse is avoided because as Joseph Nye and I wrote in Power and Interdependence, ’a set of networks, norms and institutions, once established, will be difficult either to eradicate or drastically rearrange’” (Keohane 2012, p. 136). Additionally, the likely subsequent global economic downturn would create an effective incubator for a renaissance of realism not only in Europe, as discarded ex-EMU nations are once again left to fend for themselves, but abroad, as a worsened economic climate leads to declining trust and an increased focus on individual interests.

While liberals may point to the importance of economic interdependence as well as an eventual climatic repeat of “the Monnet method” as key factors in the ultimate creation of a political and fiscal union, the chronic competitive divide between European core countries and their peripheral counterparts increases the likelihood that austerity will continue, further fueling the popularity of nascent nationalistic political parties, such as the Golden Dawn in Greece, the 5 Star Movement in Italy, and both the Basque Nationalist Party and EH Bildu in Spain. At some point, one of these parties will assume power setting the stage for a repudiation of the country’s “odious debt”. As Dani Rodrik stated in The Globalization Paradox, “When globalization collides with domestic politics, the smart money bets on politics” (Rodrik 2011, p. 188).

From a realist point of view, Kenneth Waltz’s thoughts on the security of organizations deserve intense introspection. “Organizations have at least two aims: to get something done and to maintain themselves as organizations. Many of their activities are directed toward the second purpose… In making political decisions, the first and most important concern is not to achieve the aims the members of an organization may have but to secure the continuity and health of the organization itself” (Waltz 1979, p. 111 – cf. Diesing 1962, p. 198-204; Downs 1967, p. 262-70). Indeed, to ensure its own survival an institution is likely to “break the rules”.

An ongoing and increasingly appropriate example of this behavior is the ECB and its recent announcement of Outright Monetary Transactions (OMT), a policy that seemed unthinkable only a year ago. This policy ventures into the gray area with regards to monetizing government debt, which is illegal as per Article 123 of the bank’s founding treaty. While Mario Draghi continues to reassure that the bank will under no circumstance begin printing money to buy government debt without strict conditionalities from Eurozone governments, it would be naïve to confidently think that they would simply stand by if the survival of the Eurozone solely depended on committing to cap government bond yields. While there’s a significant probability that, if faced with extinction, the ECB would resort to monetary financing, would Germany, haunted by its past experience with Weimer hyperinflation (due to printing money), acquiesce to such a policy?

In the face of such significant and critical challenges facing the global economy and political order, what can be done? Using a constructivist approach, one must be cognizant of the strengthening trend of nationalistic sentiment and possible development of ensuing norms in periphery countries. It is of great import that these trends are arrested by implementing various targeted, profound, and didactic educational campaigns throughout Europe, most importantly in core countries, so as to encourage continued cooperation (fiscal stimulus?) in exchange for sustained efforts on the part of periphery countries to reconstruct their labor markets. Nations under intense economic hardship need to feel that core countries understand their dilemma and that they are committed to their long-term prosperity.

Demanding continued austerity without some sort of relief risks a breakdown of trust between both poles. Additionally, award-winning Czech journalist Jan Machá?ek, speaking at Columbia’s School of International and Public Affairs on October 4th, advocated educating European citizens about the constitutional structure of Federalism and the fact that it is not centralism. Perhaps these educational policies will lead to the socio-dynamic version of critical mass. All in all, these strategies require immense patience from all parties. An alternative policy may also lie in the realization that we have a tension between national democracy and global markets that is extremely close to its breaking point.

From Dani Rodrik’s The Globalization Paradox: “How do we manage the tension between national democracy and global markets? We have three options. We can restrict democracy in the interest of minimizing international transaction costs, disregarding the economic and social whiplash that the global economy occasionally produces. We can limit globalization, in the hope of building democratic legitimacy at home. Or we can globalize democracy, at the cost of national sovereignty… The menu captures the fundamental political trilemma of the world economy: we cannot have hyperglobalization, democracy, and national self-determination all that once… We cannot fudge the role of nation states and proceed on the assumption that we are witnessing the birth of a global political community… Hyperglobalization cannot be achieved, and we should not pretend that it can” (Rodrik 2011, p. 200). Perhaps it would be more sensible to pare back visions of supranational governance in exchange for increased flexibility within the current political order.

The financial crisis in 2008 has resulted in a protracted period of economic frailty, which has tested the resiliency of today’s global political order. Increased tensions, not only in Europe but also throughout the world, must be diligently analyzed to determine their causes in order to present effective and sustainable solutions to ameliorate their negative effects.

In a theoretical sense, liberalism helps little to solve the current dilemma in Europe. In fact, one could say that the region is experiencing an overdose, as institutions such as the European Parliament, European Commission, IMF, G-8, OECD have thus far failed to resolve the crisis. Today’s circumstances require thinking outside the box and embracing constructivism as a tool to both evaluate the brisk-paced nature of the Eurozone debt crisis as well as produce potential solutions that focus on educating the citizens of Europe on the intricacies of a currency union and constitutional federalism. It would also be wise to ponder the idea of whether a supranational government could exist. Proceeding down a path with a likely dead end would consume precious resources and lead to widespread suffering among every day citizens.

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Seize Mars's picture

This article is pseudo-intellectual.

Let's cut to the chase: "was is the health of the State." The more you consolidate power, the more you get war.

No central banks, no wars.

Know central banks, know wars.

In the words of Ron Paul, it's no mistake that the century of central banking is also the century of total war.

toomanyfakeconservatives's picture

Mr. JP Morgan himself and others financed and underwrote the destruction of Germany and other empires in WWI. The Lusitania full of passengers and live ammunition and all that jazz. Steel and dollars.

Dick Fitz's picture

The author, while pointing out the flaws and hoping that the EU can overcome them, has instead shown the fatal endgame.

A) Greece (or Germany) will leave the euro

B) Catalonia will leave Spain, sparking war

C) inflation will become so pronounced that the EU collapses catastrophically and regional wars break out

D) exogenous events precipitate A, B, and/or C

The supra-national game is over- the fans, the players, and the bookies know it, but they are praying for a Hail Mary before the clock reaches zero. And there's just :08 seconds left on the clock, and the winning team has possession and a 14 point lead.

(who says homos don't know their sports analogies!)

merizobeach's picture

"A negative resolution emanating from the world’s largest economic bloc would cause harmful ripple effects worldwide in global trade flows. More importantly, it could also mark a paradigm shift in international relations"

And here again is summoned the diabolical Smith (Agent, not Adam):

"Do you hear that, Mr. [Europe]?  That is the sound of inevitability; that is the sound of your death."

new game's picture

1st paragraph and out, like 3 and out, punt.

same garbage journalism - wish/think/ignore reality-history human dilema.

they don't give a fuck about you and that includes you...

Seize Mars's picture

Ok, quoting Special Agent Smith is good for a +1.

AnAnonymous's picture

This article is pseudo-intellectual.
_________________________

This article is written by an 'american' intellectual.

merizobeach's picture

Are we to suppose then that you, as the Chicom resident propagandist, are an example of the pinnacle of Chinese intellectualism?  I could accept that, (you stupid, inbred, government-cock sucker).

CloseToTheEdge's picture

almost wasted a comment/time on AA

(instead... got a fucking belly laugh off yours, mochas gracias)

 

 

falak pema's picture

so by your reckoning the american intellectual is not a pseudo; we are making progress! 

bank guy in Brussels's picture

Quite right, this article is « pseudo-intellectual » shite ... with a fantasy that intellectual structures are the same as reality ... and no real attempt to meet or illuminate that reality

It is written like a sophomore college end-of-term paper for a professor he is trying to please

Writer uses terms with meanings only clear in a sub-sector of college professor land ...

And then makes the mistake of presenting these 'college professor' categories as if they express some kind of deep reality, instead of being fuzzy college professor shite

Like his talk about 'realism' versus 'constructivism', without explaining these to a general audience (for some politics professors, 'realism' is that power politics is everything, while 'constructivism' is the idea that rules, legal principles and ideals have a strong role in shaping reality)

And then his talk about 'liberalism' which can mean about 20 different things ... in North America it means 'vaguely lefty' in Europe it can mean 'pro-free-market', to others it refers to kinds of political processes ...

We certainly have a farce here ongoing in Europe at the moment but this 'college essay' does not offer anything except pretence and confusion

Ghordius's picture

lol - I agree with you, nevertheless please note that this article is using all correct political terms and has a certain depth.

your comment about liberalism fits the problem: in describing politics you either use the correct and inevitably slightly-up-to-strongly ivory-tower language or you use the current everyday street language which has been tainted by endless partisan propaganda.

think about it: it's absurd that the very word "liberal" means twenty different things in the same language.

and note in the very wikipedia which you distrust so much how many permutations that the concept has. it's a maze. to dazzle and confuse.

compare it with other languages - something I've started to do every time -  and you get a funny ah-ha effect

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btw note how many use the word "globalist" here in ZH. pls also note that it's use is still US-only and it's still very vague

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btw, the very concept of an encyclopedia with cross-references was a radical revolutionary idea made to subvert conservative press censorships.

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btw the big whopper of the article is at the end with the proposal of a global government so that the demands of globalization can be fulfilled without parts of the globe going "fully-retard"-protectionist vs the dominant system that has to inevitably win because it's just so blabla etc

GCT's picture

No wonder we are in the shape we are in.  This guy needs to get out of the classroom and use the K.I.S.S. method.  To sum it up for me a simpleton in the world of academics he is merely stating get with the program you liberal people! You need to set some norms everyone can live with!  

Screw it this will all end in war anyways!  Soverign countries are going to adhere to whose norm?  Germany's, Spain's, USA's, whose norm are we now going to follow as we head into the gates of hell?

Zadok's picture

Lost me at the first part of the first line "Since the 2008 financial crisis the foundations of the global economy have been in repair,"

Translation: Devaluing people in order to loot and pillage wealth with the end result being war and destruction.  All efforts just buy time to this end while being sold as helping the doomed.  

Good luck all, it is likely to be quite rough for most of us, trolls included.  

MeBizarro's picture

Yeah there weren't wars between tribes or city-states or kingdoms before central banks.

andyupnorth's picture

No central banks, no wars.

Know central banks, know wars.

In the words of Ron Paul, it's no mistake that the century of central banking is also the century of total war.

 

Beautiful!

Yen Cross's picture

236 years ago , Our fore fathers gave their lives for our freedom.  FUCK YOU England. 2012-1776=236

  Fuck you Europe!

toomanyfakeconservatives's picture

We have little to learn from those sad, defeated nations. Beware of foreign influence.

john39's picture

too late. the us government is over run with dual nationals.

Hulk's picture

YC. you have been drinking again. haven't you !?!?!?

falak pema's picture

Bad day at the Forex. Four score and sixty minutes ago...

bank guy in Brussels's picture

Re « 236 years ago », significant date, no democracy or republic in human history has lasted over 240 years, dating back to Greece and Rome

So it is time for the US to be done and over, and it seems full dictatorship and tyranny is arriving there right on schedule

Tho there is a good argument that most of the world's trouble spots trace back to the British (the British setting up the Zionists in Israel, the extremist barbaric Saudis in Arabia, etc..)

But unfortunately, one of those global oppressive trouble-making countries, tracing back to British influence, is America

falak pema's picture

well the UK became a consitutional monarchy since 1689 bill of rights...just saying on a nominally factual basis. 

Being a democracy to its own people and a colonial, thus repressive, empire is nothing new; either for hegemonial Athens or Senatorial Rome.

disabledvet's picture

QEternity. Outright Monetary Purloining. Kamikazebonds. I mean it really is fun to make fun of these monetary clowns/er...authorities "making this stuff up" as they go along. Still, the purpose is the same and hence "you don't want to touch Government debt" period. USA Inc is dominating these two regions unlike anything ever before. The only question that needs answering is "what will the Federal Government's response look like...

Deathrips's picture

Saying its Europes fault is kinda like the European people writhing in pain and kicking you in the face as you writhe in pain (soon to kick them in the face). Its pretty late hour in this "game".

Just as the squid sucks life loving red blood, making zombies outa black ink in America...its not all "Europes" fault either. The fault is in allowing this bull to continue.

I wish we could just round em up and banish them to some desert island....

 

Fuckers.

The Navigator's picture

Why waste a perfectly good desert isle on those fuckers when we could put 'em on a rocket on a one-way mission to the Orion Nebula.

On the other hand, if there was a video feed, I'd pay the PPV to watch them cannibalize each other.

Cabreado's picture

In periods of extreme chaos, hiding behind "isms" comes naturally -- and ain't it interesting that it always takes so many words...

Damn the "liberal" crap, and pay attention to antisocial minds who know no "theory."

The gibberish is a source of laughter for them.

 

DogSlime's picture

"Since the 2008 financial crisis the foundations of the global economy have been in repair,..."

I haven't seen anything being repaired.  I haven't seen any attempts at repair.  The elite are trying to consolidate their positions before the structure collapses.  There are no attempts at fixing it - only at slowing the rate of collapse so that they can ride the gravy train for a little longer and strip even more liberty from the ordinary person.

To suggest that things are "in repair" is highly disingenous.  Deliberately so?

Yen Cross's picture

All I see is gas prices x2 and food prices x2 , and a whole shit load of people on SNAP cards! 

  It's been 4 years, and blame it on Bush is getting really old!

Conman's picture

Oh god. Hey if your brother cuts off your arm in freak chainsaw accident, is he any less responsible after 4 years? 8 years? Sure you figure out different ways to jerk off but your arms(buy buy buy consumer economy) is still gone.

AynRandFan's picture

In other words, it's Bush's fault forever.  Logic works better with premises that make sense.

Incubus's picture

Shit, so if if I rape some people, I'll be held less responsible for it as time goes by, because there's a new rapist out and about?

Ballin D's picture

If you brother cut your arm off 4 years ago and you decide to cut your other arm off now, you're still fucking stupid.

merizobeach's picture

There's plenty of blame to round; no need to deny Bush his fat share.

news printer's picture
Satellite photos suggest air strike on Sudan Arms Plant

Satellite is wonderful thing; one can see bombed site before and after

bank guy in Brussels's picture

That was covered on Al Jazeera already several days ago ... indeed highly significant, black-swan-ish

Israeli warplanes apparently bombing Khartoum, Sudan, and killing people ...

http://www.aljazeera.com/news/africa/2012/10/20121024142531802810.html

Interesting perspective on this from a wild, often-scorned Irish website ... suggesting the new war in the Middle East will be Egypt on the territory of Libya, Sudan, Ethiopia ...

The Egypt-Libya war idea is especially intriguing, as Libya is half-sunk in chaos after the Nato 'humanitarian bombing' that killed tens of thousands

Egypt is starving with tens of millions of people, and no money or oil ... next-door Libya has very few people, lots of oil to sell ... and Egypt and Libya were united before in the 'United Arab Republic'

Egypt trying to take over Libya to feed its starving people using the oil revenue money, does make sense

The offbeat 'conspiracy site' article, 'Egypt Prepares for Total War After Israeli Air Strike on Sudan'

http://www.whatdoesitmean.com/index1619.htm

Atomizer's picture

 

 

  • When labor escalates to become noncompetitive, jobs are outsourced.
  • When jobs are outsourced, employment levels rise.
  • When we outsourced those jobs to a country who loans us monies, compromises are made to benefit the financial aid donor.
  • When our economy begins to stop spending, a global rippling effect begins.
  • A socially engineering event will occur under a body of individuals who will tell new lies.
  • These lies will script language of financial stability and the necessity for continuity amongst a national security endowment.

 

We still have other current events, this is another upcoming debacle. Be aware!  

Q1 2013 or sooner.

Yen Cross's picture

Let the Russians and Chinese sort "Western Europe" out.  Fucking thankless people that allow history to repeat!

AynRandFan's picture

Ditto.  Wasn't long ago we were supposed to be embarrassed that we weren't more like Europe.  It may be the birthplace of western civilization, but it's been moving backward ever since.  From democracy to fascism to collectivism.  Punctuated by anarchic warfare of course.

merizobeach's picture

"it's been moving backward ever since"

I don't mean to nitpick, but I think they're still moving "forward" (toward collapse and muppeteered fascism), and they're still a few steps ahead of America (at least in the collapse; America seems to be still a pioneer in advancing modern fascism).

WeekendAtBernankes's picture

It takes longer in America because even today the sheeple are much more distrustful of the central government than typical Europlebs.  The American politicians have learned to eke out their agenda over a longer time frame.  America also has a stronger institutional resistance to authoritarianism which has taken longer to dismantle.  Most of Europe is much more new to the whole representative government thing and thus have lower hurdles for their rulers to overcome.

new game's picture

yen, think in simiplest terms; too many atoms in a a confined vessal; things go boom.

same everywhere else humans concetrate, but now we are talking 7 fucking billion atoms.

comonly called "hot spots", which has many, many meanings-hehe...

Atomizer's picture

Good night ZHers. Enjoy your weekend.

erg's picture

Good night Trav and Robo and Gully...

Terminus C's picture

This guys doesn't even know what liberal and liberalism means.

He needs to read "Wealth of Nations" by Adam Smith, then he can talk about "liberal institutions" like the IMF et al. 

What a joke.