It is premature to sing dirges for the European Union (EU), but the path-breaking grouping that blazed a new trail after World War II and took a war-spattered Europe to a new trajectory of peace and prosperity is facing an existential crisis. What started as Greece’s financial meltdown impacting on the common euro currency has spawned an unprecedented soul-searching for answers.

It would appear that the EU has exhausted itself in tackling the Herculean task of completing the Lisbon Treaty process, itself a pale copy of the original new constitution rejected by French and Dutch voters in referendums. Indeed, the sense of anti-climax was symbolised by the low-key nature of the man and woman appointed to the supposedly high-profile new jobs as the EU chief and the foreign policy and security head respectively.
Even as the Union expanded to its present strength of 27, those in favour of a loose grouping of states, rather than an integrated Europe of the dreams of men like Jean Monnet and Jacques Delors, seem to have won the day. But the problem for Euro-sceptics is that states have given many of their sovereign powers to the EU without giving it the authority to police the economies that have joined the common currency.
The bad blood between crisis-ridden Greece and the main paymaster Germany has been caused by the starkly changed nature of the European landscape and Berlin’s assertion of its rights as a nation state. Germany gave up its precious Deutsche Mark for the euro on the strength of a strong central bank that would place fiscal prudence above politics.
Unlike in the early post-war years, Germany does not have to prove that it is a good European, and over recent prosperous decades, Berlin has tired of being the perennial paymaster. Behind the prevarication of Chancellor Angela Merkel was the great unpopularity of bailing out spendthrift Greece and the ultimate package announced cost her party victory in an important state election, with the federal coalition losing its majority in the upper House.
With the increase in members, the traditional argument between those in favour of deepening and others for enlarging the Union had become irrelevant. There had in effect come about a Europe of several speeds, ranging from those in the common visa-free Schengen regime for the outside world and belonging to the euro zone. In addition, countries like Britain obtained opt-out clauses to soothe their nationalist nerves.
Whatever one’s views on the kind of Europe that should exist, the present is the un-heroic age for the Union. The earlier ambition of forming a Rapid Reaction Force for policing duties and humanitarian intervention, which had met American frowns when first mooted, seems to have melted into thin air. And with the entry of many former Communist East European countries with their historic anti-Moscow bias, the EU became a house divided, as proved dramatically over the American invasion of Iraq.
Yet the gains of the European Union have been so enormous that no one wants to see it disappear or atrophy. The immense benefits the grouping has brought to members in the economic and trade fields are undeniable. It so happens that adversity following the world economic meltdown of last year, originating in the United States, has sharpened national divisions leading to sharp tempers and a search for scapegoats.
The economic and trade aspects of the Steel and Coal Community, which evolved into the European Economic Community and ultimately the European Union, were only one part of the European dream. It was to build the edifice of a powerful political organisation that would have teeth. Perhaps that dream was already shattered in the transition from France’s Jacques Chirac and Germany’s Gerhard Schroeder to Nicolas Sarkozy and Angela Merkel.
Where does the Union go from here? Despite the President and foreign policy chief being armed with new powers under the Lisbon Treaty, the EU has trimmed its ambitions. There are simply too many divergences between member states and, as far as the euro is concerned, the common currency has not been underpinned by effective policing mechanisms of members’ policies. And it must be recorded that Germany and France themselves had initially breached the strict deficit rules.
The Greek crisis and its repercussions are a wake-up call for the EU leadership. The European tragedies of the 20th century must remain a reminder of where national animosities can take the continent. No one wants to hark back to the bad old days, but the question the present crisis poses is how to re-inject a measure of hope and idealism to the European project. That cannot be achieved merely by common economic and trading arrangements. The problem is to re-invent the European dream.
A new European dream would face two major hurdles: Difficult times breed fear and suspicions and we seem to be living in un-heroic times, with a paucity of leaders of stature and dreams. The latter is symbolised by the choices for the enhanced presidency and foreign affairs chief.
The old arguments about “deepening” or expanding the European Union are all but forgotten; the latter have won hands down. Yet there is enough life left in the European dream for idealists to hope that the EU will emerge out of its present blues as something more than a convenient economic and trading arrangement. If nothing else, we must honour the memory of the original European dreamers.