Despite all the despair about Euro and Europe plenty of support for the general idea of European unity has remained in most countries that use the Euro Angela Merkel's austerity union will probably fail, but the very idea of a united Europe may perish with it. It's all about the democratic deficit.
Absence of democracy in EU has been a common complaint, but so far it has been manageable, because the stakes were not that high. But now Frau Merkel wants to have serious powers over national budgets of nation states without any democratic mechanisms. That is almost surely bound to fail, with potentially catastrophic side-effects.
Democracy means that people must have a voice in decisions that influence them. It is almost inconceivable that unelected bureaucrats from Brussels or politicians elected by voters in other states would manage to tell national parliaments what to do. They may try, but they are unlikely to succeed.
Democratic legitimacy will in the long run always win over international treaties or obligations, if there is sufficient will to ignore those international obligations. And it is hard to see how European Union could emerge victorious against a rebellious debt sinner. So EU slaps a fine? Debt sinner will not pay and that's it. European Union could stop payments of agricultural subsidies, structural funds etc. Debt sinner could then stop making payments to EU’s budget and again they are even. All further steps by EU will mean trouble not only for Euro, but also for the common market and debt sinners membership in the European Union, but nobody wants to expel anybody from the European Union.
So a nation state will always win, but the fight will damage the credibility of not just the ECB, but also of the European Union and the very idea of European unity. If EU will be seen by the public opinion of the debt sinner as an undemocratic and unelectable body that demands things voters in that member state don't want, then European Union will soon lose all support in that state and they may start thinking like the British – that they are better off alone.
The main problem is that those demanding painful sacrifice must have democratic legitimacy to demand it. Therefore the politicians demanding cuts and tax hikes must be elected by the people they tax. If Merkel wants cuts to be implemented from Brussels (or Frankfurt), then those European politicians demanding cuts must be elected by the people of EU. So elections for leadership posts for European Union, or at least to Euro zone, must be democratic.
I'm not too optimistic about the outcome of this democratic Euro zone. Even perfectly legitimate governments in Europe have difficulty pushing austerity through and leaders elected to rule Europe won't have the same legitimacy as politicians elected to rule member states. But at least a democratic Euro zone would have a better chance to succeed than the proposals presented either by Merkel or France's Nicolas Sarkozy. Ignoring democracy has always been a mistake in EU and now we are paying the price for that mistake.
We are unlikely to see democratic Euro zone and it's a pity. For that, as for many other current ills, I blame Angela Merkel. Sometimes it is said that German people or business elite have tied her hands, but ironically other politicians and business leaders in Germany sometimes have pretty sound ideas about saving Euro. Also, German people seem to be more reasonable then many think, because eurosceptical FDP has been punished at the polls, as has Merkel's CDU, while much more reasonable SPD or Greens are succeeding. So Germans are wiser then Merkel seems to think. So if Euro collapses, it's her fault.
And as a last thought – does Angela Merkel really think she will get re-elected if Euro collapses under her watch?
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