Engraved on the U.S. dollar bill are the words “in God we trust.” The sarcastic extension of that phrase says “all others pay cash.” It seems that forces rampant in the U.S. and in Europe are trending toward a decline in trust in leaders, currency, and in governments overall. Public opinion polls tell us that people are disgruntled, disappointed, disaffected, and basically disillusioned by not knowing what to do about it all. Whether it is the uncertain economic outlook, the apparent incapacity of leaders to manage problems, or the tendency to want to place the blame elsewhere, the overall political mood is less than inspiring.

In Europe, the latest results from the Pew Research Global Attitudes Project (see Pew Report here) present evidence that public attitudes toward the European Union are at an all time low, but also that national leaders are losing significant traction among EU member states. The challenge to sort out the equation between these two trends is a hard one to decipher. The causes and the effects of the economic decline of the last few years have underlined trust in both the EU project as well as in the individual governments. Where the problems are most serious—in Southern Europe—the crisis of confidence is the greatest. But even in Germany, where Chancellor Merkel is enjoying a level if support her national neighbors might envy, there is still not clear certainty about her ability to ride her wave of support through the September elections into a third term. The appearance of blowback movements in Germany directed at the euro system (see my earlier essay on Germany’s anti-euro movement), as well as in signs of friction within Merkel’s own party and with her coalition partner, the Free Democrats, is evidence that there is room for a September surprise. The recent state election in Lower Saxony, where Merkel’s party lost by a razor sharp edge to the Social Democrats, has made many CDU members quite nervous for September.

There is no question that Europe is in a funk at the moment. France is unsure of itself under a hesitant President. The UK is unsure if it wants to stay in the EU, and its debate over that very issue will only continue to boil over the next three years before a potential referendum is held on membership. Hungary seems to be headed into its own identity crisis as it grapples with a power hungry leader rejecting the responsibilities of EU membership by cracking down on opponents, the media and other obstacles in his way. Then there is the governmental instability in Rome with an uncertain Italian government. Meanwhile, Spain and Portugal are struggling with serious political and social unrest resulting from dangerous levels of youth unemployment.

At the recent Economic Summit in Munich sponsored by CESifo and the BMW Foundation, the challenges Europe is facing were presented in sober terms. The need to regain competitiveness in Europe requires painful steps involving ending entrenched subsidies, labor market liberalization, and possibly even—for some states—a need to exit the euro zone. But can such steps be taken in the face of powerful vested interests and a public that is unsure what impacts these steps will have on them?  It can be argued that the necessary path toward stability might be clear, but the challenge for politicians, as European leader Jean-Claude Junker has said, is to figure out how to implement the steps and then get re-elected. How does the push for a more integrated Europe move forward with greater sovereignty yielded to Brussels, while at the same time strengthening Europe’s overall democratic framework? How do you make European institutions work without involving European stake holders who believe they have a voice in the process?

This problem for Europe is magnified by the fact that a number of sovereign democracies are trying solve this very issue all at the same time. Amidst all this, there is a serious deficit of persuasive voices trying to remind a half billion Europeans why the project is still worth fighting for. The centrifugal forces are even louder.

The Pew Poll suggested that there remain deeply embedded national stereotypes interfering with the process of getting Europe back on track. Germany seems to take a good deal of the incoming fire emerging from the continental crises, labeled by many as arrogant and self-obsessed with its own success. But then again, the Germans are the strongest economy and the most powerful political state in the EU. What do the Germans expect? Many Americans may have a message for their German peers: “welcome to the club!”

Yet the fact remains that Germany needs to make sure the European project succeeds. Berlin is well aware of this. In fact, the truth is this: even if many other Europeans don’t like the role Germany is effectively playing as chair of the European “board,” Europe would not have much of a board if it did not have Angela Merkel sitting in that seat right now.

So the trust trifecta now—declining trust in people, process and institutions—is causing some challenges: balancing austerity with solidarity, or solidarity with achieving solidity of the European project. In some ways, those equations result from the way the project was started with a political dimension preceding the economic union. If you compare the experience of German history, there was political union before there was a currency union. The past two decades in the EU illustrate the problems when the sequence is reversed.

These problems are causing Europe to be enormously self preoccupied with itself at a time when the wider world is not waiting around for the end of the deliberations. Add to that the serious demographic issues parts of Europe are and will be facing and you have a mounting list of challenges.

In the end, it will be the responsibility of politicians to sort this puzzle out. They will need to increasingly use the current crisis to promote awareness of the necessary steps, to stress the urgency with which they must be taken, and to point toward a better future. There will be unequal equations involved and dealing with the imbalances and inequities must be part of the solutions. Otherwise, vested interests assert themselves and tensions can rise (think 1789 in Paris).

There is one final step to avoid the trifecta: finding an answer to the question many Europeans now find themselves asking on a near daily basis. In the name of what are we pushing forward for? It cannot only be the common currency. Nor can it be for short term gain. Politicians have short term windows called elections. They are pressured to deliver in ever shorter time periods. They have to prove to voters that change is required in the face of those who may firmly see no need for changes. But if they can find the message, explain the method, and show the measurements for success, they can gain back the trust of the people. That is, after all, what political power and the responsibility to use it has to be based on. While some people may wish to abide by the adage “in God we trust” to reassure themselves, getting work done on this earth means being able to have trust in our leaders. A quote from President John F. Kennedy reminds us that “here on earth God’s work must surely be our own.” For today’s leaders, that work requires earning the trust of the governed.

Further analysis on this topic:

Political dysfunction spells trouble for democracies, by E.J. Dionne, Washington Post

  • K Bledowski

    “In the name of what are we pushing forward for?” is the right question for Europeans to ask. The disillusionment toward the EU that J. Janes cites is real. The average voter feels that in the past two decades or so the EU has bitten more than it could subsequently chew. That was certainly the case with the EMU and the Lisbon treaty. The various “unions” – fiscal, banking, etc. – are a veil hiding this failure.

    The EU cannot “push forward in the name of” peace because this is already an acqui that has been well discounted by voters. Common defense and foreign policy are out of the question. The EU cannot push in the name of political unity because a federation won’t fly. The one area where progress is feasible and offers immediate benefits is completing the economic union. Capital still moves with difficulty across borders, obstructed by regulatory patchwork and hidden controls. Goods and labor are free to cross borders but services face barriers. A major push to dismantle barriers to capital allocation coupled with freeing up trade in services could boost output, create jobs and … raise positive sentiment toward the EU. In fact, before the EU cuts a free trade deal with the US, it will have to liberalize its internal trade first.

    The EU has been putting the cart in front of the horse and chasing ambitious but unattainable goals since the late 1980s. The United States of Europe is not for today. A federation is a romantic siren’s call that distracts from the here and now. What the EU needs is a better allocation of resources and further extension of internal markets. That translates into jobs, euros, prosperity, and a more positive sentiment toward Brussels.