Europe the Reluctant Tyrant

In the opening installment of this memo, we laid out the following theme:

"The questions before Europeans now are as simple as the politics are intractable: Does this moment of generalized crisis call for more integration, or less? Will the European Union move forward, or will it barb the seams of a flammable patchwork of petty nationalisms? And as dissatisfied electorates change the balance of national power election by election, can the center hold? Can pragmatism prevail over parochialism? And, well, should it prevail?"

For those who, on the balance, admire the European institutions -- if nothing else, acknowledging the role they have played in keeping a peace that was far from guaranteed on a Continent accustomed to war -- that last question can be hard to honestly fathom. For most mainstream political leaders in the 28 capitals and the supranational leadership in Brussels, such contemplation seems downright unthinkable. But europhiles may be pushing what was once glibly described as Europe's democratic deficit ever closer to the appearance of default.

A Face-Palm Moment in Portugal

How's this for optics: A pro-austerity incumbent in a small Southern European nation wins the most votes in an election, but with 28 fewer seats in parliament. Rumors begin to swirl about whether the opposition -- comprising a traditionally divided cluster of left-wing parties suddenly finding common purpose in defying European policies -- might be best positioned to form a durable government. The president selects the incumbent prime minister to form a government, following the letter of the law, which gives the top vote-getter first crack at a coalition. But in doing so, the president takes it a step further, declaring that votes aside, the left should have no say in the formation of the government. This is what happened in Portugal this October, and these were the words of Portuguese President Anibal Cavaco Silva:

"Mr. Cavaco Silva said a leftist government wouldn't guarantee the country's ‘stability, durability and credibility.

"‘Never in 40 years of democracy have the governments in Portugal relied on the support of anti-European political forces,' he said."

Echoes of Wolfgang Schauble: "Elections change nothing." But the German finance minister at least was saying that elections have to be balanced against rules. Cavaco Silva cleverly advances his own political prerogatives by citing the protection of Portugal's position in the Union.

Before it ever faced an existential crisis, Europe already had an image problem. National politicians prefer to use the Union as a scapegoat for their own political failings, while taking the credit when Europe-funded programs benefit their own constituencies, or using EU legislation to advance their own prerogatives by stealth. Take for example the British inability to explain how much of the regulation that comes under attack now for supposedly hampering national commerce was often enhanced beyond EU demands by national politicians with their own designs for restraining national sectors -- a process known as gold-plating.

In the past, Europe was too demure to claim credit for progress. Now its presence is more visible, but the image that is being received is too often that of Europe as a strongman. In Portugal, a national politician announced defense of the Union as a reason to govern athwart the spirit of national law. In Greece, Europe scored a twisted victory, sending Alexis Tsipras back to Athens as a standard-bearer for the reforms favored by Brussels and Berlin. And there's the recent controversy over qualified majority voting in the context of the refugee crisis.

This is all seized upon in Britain. The euroskeptic press will hammer home Europe's democratic deficit in the months to come. Witness the Telegraph, according to whom the European Union has crossed the Rubicon:

"Greece's Syriza movement, Europe's first radical-Left government in Europe since the Second World War, was crushed into submission for daring to confront eurozone ideology. Now the Portuguese Left is running into a variant of the same meat-grinder."

Europe has lost control of the narrative. For now, at least, it is able to stamp out opposition from peripheral countries such as Greece and Portugal. But elections are approaching in Spain, the eurozone's fourth-largest economy. Ireland votes in the spring. In Italy, Matteo Renzi, the most enthusiastically reformist head of state on the Continent right now, is pivoting to a confrontational stance with Europe as his personal approval ratings drop. And in the next two years, voters will be heard at the very core of Europe, with Britain's EU referendum on deck, and German and French elections lurking in 2017.

Europe has proven itself a champion of muddling through crises. It does so by governing from the top in a series of elite-led bargains. But now the European Union is locked in a campaign to explain and justify itself. It needs to do a better job.

Around the Continent

A blunt Dutch rebuke: Dutch Finance Minister Jeroen Dijsselbloem has his own approach to euroskeptics. His comments in the aftermath of as sweeping victory by Poland's Law and Justice party, cited by RealClearWorld's Kaj Leers, could serve as a rhetorical icon of characteristic Dutch bluntness:

"Like other countries in Eastern Europe, Poland annually receives billions of euros in subsidies from the European Union, distributed via structural funds. According to Dijsselbloem, Poland's stance on refugees could endanger that money flow.

Dijsselbloem said that Poland should show something in return for Europe's largesse. 'And if not, we could take a part of the EU's budget that flows to countries like Poland, the Czech Republic, and Hungary in the form of subsidies and use that money to help Turkey pay for the shelter it provides to refugees within its borders,' Dijsselbloem was quoted as saying.

"'You're in the European Union for better and for worse,' the Eurogroup chairman added. 'You can't just enjoy the benefits and walk away from the disadvantages when it suits you.'"

A Constitutional crisis in Britain? The House of Lords may have just triggered one. At issue is the Lords' vote to delay government cuts to the tax credits extended to lower-income families. The story obviously has legs, and it can be followed here and here. London Mayor Boris Johnson says the House of Lords is "playing with fire," and Prime Minister David Cameron wants a review of its powers.

Osborne's star fading? British Chancellor George Osborne is tabbed by many as Britain's next prime minster. But the controversy over tax credit cuts may have some fellow Tories taking a closer look. Sebastian Payne:

"Some believe the tax credits row has fatally wounded Osborne's reputation within the party, as well as his chances of succeeding David Cameron as Tory leader and prime minister. Others say he has done the right thing by refusing to perform a U-turn, and that his reputation will recover.

"One loyal Conservative MP says ‘the chancellor's reputation is still strong' within the party: ‘No Tory MP voted for Labour's motion on tax credits last week. The tax credit system needs reforming, he's set the course and by following through, he's showing strength. The needle on his reputation hasn't shifted for the worse.' Another Tory backbencher says 'I think a U-turn would be more damaging than ploughing on.'"

Merkel in crisis: Financial Times columnist and leading Europe observer Gideon Rachman thinks we may be witnessing the end of an era:

"Should the chancellor regain control of the situation it remains possible that in 20 years' time, she could yet be seen as the mother of a different, more vibrant and multicultural Germany -- a country that held on to its values when it was put to the test.

"However, if the number of refugees heading into Germany continues at its present level for some time, and Ms Merkel remains committed to open borders, the pressure for her to step down will grow. There are, at present, no obvious rivals. But a continuing crisis will doubtless throw some up."

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