Five years later: Lisbon, the euro and the EU

For five years the European Union has been operating on the basis of the Treaty of Lisbon, which entered into force in December 2009. With this treaty the years-long commitment to modernize EU institutions and their required harmonization with rapid EU enlargement reached a “provisional” end. Hopes in a more dynamic European integration through improved decision-making process, however, was erased by the appearance, almost in conjunction with the entry into force of the Lisbon Treaty, of the monetary crisis which eventually escalated into a serious economic and political crisis.Institutional stability achieved with the new Treaty has nonetheless contributed to the ability to tackle the crisis with success, since it adopted a set of new rules and mechanisms useful not only for crisis management as they also integrated in the monetary union essential elements effective in time: the European Stability Mechanism (Mes) that, under strict conditions, can support Member States hit by financial difficulties; the fiscal pact, which commits the Member States to sound financial management and the reduction of their debts; the banking union, which requires banks to adopt specific rules and strict controls. Thus, there have been (or are in the pipeline) also important steps towards political union. All these innovations, born outside of the system of institutions and community processes to overcome the crisis, one day will be incorporated into the Treaty, provided they are included in supranational legislation and guaranteed necessary duration. This could provide the opportunity for a more substantial revision of the Lisbon Treaty, leading eventually the EU beyond the threshold of the political union which in this case entails, most of all, integration of economic and foreign policy in the Community decision-making process, with a majority vote by Member States. After the experience of the crisis of the last six years, and in relation to the new threat of Russian politics under the leadership of Putin, there should be no doubt about the need for this step. Whether it could be dealth with and whether it could produce results will depend on whether it will overcome the crisis. This will happen only if all Member States are ready to do their share, namely, all Member States – in accordance with the regulatory framework governing the monetary union – must review their national structures and policies in order to repair the damage and the negative consequences caused by wrong decisions. Which acceding State would get involved in a political union with partners who are unwilling or unable to comply with the rules adopted by common accord? Critics of the policy of reform – that is not easy to implement as it requires citizens of the concerned countries to undertake sacrifices and limitations – do not want to see this link. Instead they defame the necessaire austerity measures as if they were not a jointly agreed regulation of Member States, who have to struggle with great difficulty because of arduous demands for reforms. As an alternative to reform policies agreed in the context of the European Union, they support a policy of growth, which significant financial resources from the public sector should bring out of the crisis. They in short want to fight the crisis, which is in fact the result of excessive indebtedness, continuing to contract debts. But this may not work: although in the short term for interested countries, the situation would be somewhat relieved, the will to continue the necessary reforms would be cooled down. Thus, the crisis would worsen and prolong: long-term growth is possible only on the basis of a sound economic and financial policies. With upcoming elections to the Greek Parliament, tabled for the end of January,  debates on the best way out of the crisis escalated significantly, given that according to the polls, the party of the radical left Syriza could emerge victorious. Its leader, Alexis Tsipras, intends to back out of the already introduced, gradually effective reforms and backtrack on the changes and austerity measures promised by Greece, essential condition demanded by European partners for financial aid already given and the one to come. If the promises of Tsipras become reality, Greece will risk bankruptcy. The currency crisis thus appears to return to its origins. The testing period of the Lisbon Treaty and of the measures adopted in the crisis management strategies to rescue monetary union is entering a new phase.