04. 08. 2011
Il Piccolo
Stefano Giantin

“The EU should strengthen itself or it will end up like Yugoslavia”

Joze Mencinger

His well-known countryman, the Slovenian philosopher Slavoj Zizek, describes the contemporary world in his last book as a “the end of times”. Zizek illustrates the collapse of the capitalistic system, the ecologic crisis, the social divisions of an organism in profound decadence, from which – one hopes – a better system will emerge. Joze Mencinger, famous economist, lawyer, politician, Minister of Economy in the first democratically elected government of Slovenia in 1990 and historic “euro-sceptic”, instead describes a worrying parallelism between the European Union and Yugoslavia before its collapse.

Professor Mencinger, from an economical perspective, what are the main similarities between EU today and Yugoslavia before its break-up?
First, the differences in the level of development in the EU are similar to the differences that existed within Yugoslavia. The inability to create a proper economic system and to have an appropriate economic policy was one of the reasons why Slovenia decided to leave Yugoslavia. Even the idea of creating a “Europe of two speeds” or “two trains” is not new. One can simply not overlook the similarities.

According to your opinion, what are today the main weak points of the EU in an economical sense?
In the last decade the whole development in EU went in a wrong direction. It was based on illusions that Europe can compete in the global competition with far more ruthless societies and it was expressed by the idea of creating “knowledge based society”, a senseless slogan of the two Lisbon strategies. Indeed, this implied that Europe would create and sell knowledge while China would buy knowledge and sell products. Look at the balance of payments and you can easily see that China does not buy knowledge, because knowledge is even more mobile than capital. And there is more knowledge in Shanghai than in Lisbon or Brussels.

Are there any other significant parallels between the two entities, the EU and Yugoslavia, in other fields, such as the political field or the institutional field?
Certainly. The EU is and will stay for a long time an association of countries and not of citizens, which implies that it is unavoidable to have discussions about whether the concepts of “one man, one vote” or “one state one vote” are democratic. These were also the discussions in Yugoslavia. Furthermore, in Yugoslavia, it was inappropriate to doubt in “brotherhood and unity” or in the “identity of interests”. Now, it seems to be inappropriate to doubt in the “Euro” and the “identity of interests in Europe”. When the Euro was introduced, there were no provisions for exit, the Euro became a symbol, it was considered that monetary integration in Europe was irreversible. Therefore no legal provisions for a country to leave EMU were created. This also reminds me of Yugoslavia, there were no legal provisions for the republics to leave.

Politically speaking, Yugoslavia wasn’t a fully democratic country, even though its citizens enjoyed a high degree of freedom. So, how can you still make a comparison between those two entities?
I agree though in the Eighties Yugoslavia was a reasonably democratic and open country. It is however clear that one of the pillars of the existence of Yugoslavia was democratic deficit of a different kind. However, democratic deficit is with no doubts also a pillar of EU stability and its enlargements. This was clearly shown in the constitutional debates some years ago. When the EU Constitution was refused by people in France and Netherlands, the EU bureaucrats found a kind of a bypass solution with the Lisbon agreement.

You recently spoke about a “Yugoslavian syndrome” in the EU, of a “everybody for himself”. What is it about?
In the Eighties, when Yugoslavia entered a period of stagnation and crisis, people began looking who is to be blamed for that and who exploited them. At the end, everybody or each republic was exploited by everybody else or by all other republics. You can now observe such signs of the “Yugoslav syndrome” in the EU. More and more people in Germany or in Slovenia will believe that they are, for example, exploited by Greeks, while Greeks will become convinced that they are exploited by Germans. Therefore, I am very much afraid of a long lasting crisis. Could EMU and EU survive a decade long lasting crisis?

Do you forecast a break-up of Eu?
I hope that the break up of EU will not happen. I do not believe that we are facing the last days of EU, yet. EU in 2011 is where Yugoslavia was in 1983. At that time, Yugoslav politicians were desperately looking for how to rescue the system and the country. They could not find a solution. Let us hope that EU politicians will find such a solution or that better times will come regardless of what they do.

What could the collapse of Greece mean for the future of the European Union?
I don’t think the bankrupt or the debt restructuring in Greece can put the the EU and the Eurozone at risk. It was clear from the very beginning that by “assisting” Greece, EU assisted French and German banks, and that their “assistance packages” are only pushing Greece into even worse disaster. The calculation is simple: if your debt is 160 percent of GDP and interest rate are much higher than growth rate, which are even negative, the debt can only grow or can be written off. How can somebody pretend that Greece will suddenly create budget surpluses and increase “competitiveness”?

Are you optimistic that the EU will cope with and overcome the crisis?
I do not know but I hope that EU will survive. I am afraid of its dissolution for two reasons: high costs and uncertainty. But the Union proved to be, despite weaknesses, a rather stable association, though the pillars of EU stability are rather strange: the already mentioned democratic deficit, the ability of EU to disregard its own rules, when needed, inertia, vested interests of politicians and bureaucrats in Brussels or at home, constant creation of new institutions, and reliance on empty slogans. These on paper seem to be shortcomings, which is probably true, but they are the pillars of EU stability.

How do you imagine the future of Europe after this crisis?
I do not know what will happen, but EU might differ very much. However, I do not think that poor countries would leave. Rich countries would more likely leave the poor countries behind by creating new arrangements. And there is another question? Will the crisis end at all or will we simply get accustomed to zero growth as a normal state of affairs.

You also compared the EU with the Habsburgic Empire. Why?
When I am asked about the future of EU, I usually only say that the European Union will certainly not last as long as the Empire did.

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