Burman: In 2012 as in 1912, Europe still centre of world's fate - Toronto Star

Imagine we are now living in 1912, not 2012. Exactly a hundred years ago. The shape of the new century is still unclear, the pain of the previous one is still raw and the world is quiet but anxious. No inkling yet of the Great Wars to come or which superpowers will emerge to scar the decades ahead. But there are the first feelings of foreboding that the table for this new century is being set in ways that are out of everyone's control. In a New Year's editorial in 1912, The Times of London writes: "The world is at peace, yet all nations feel that the tranquility which they possess is precarious and ill-assured."

At the centre of the global story in 1912 was the fate of Europe, and so it is today.

There was considerable poignancy last Tuesday in Paris when France's leaders and bitter rivals, Nicolas Sarkozy and François Hollande, stood side-by-side during the singing of "La Marseillaise" at anniversary ceremonies marking the defeat of Germany 67 years ago. It was only a day after Hollande had been declared the winner of France's bruising presidential election, largely due to his rejection of the austerity program of Sarkozy and German Chancellor Angela Merkel. It is ironic that Hollande, who will assume office on Tuesday, will fly immediately afterwards to Berlin to have his first meeting as French president with the German Chancellor.

No one can predict the scale of the aftershocks flowing out of last week's European elections, but the odds are they will be enormous. The growing public fury at Europe's savage austerity policies and at its national political leadership was evident in the election of Hollande as France's first Socialist president in a generation. But it was even more apparent in Greece last Sunday where support for the country's mainstream parties completely collapsed. The prospect is now real that Greece will leave the Eurozone and delay paying off its international debts, imperiling not only the European Union and the Euro, but the global economy as a whole.

In the Greek elections, an astonishing 70 per cent of the voters turned their backs on the two largest parties, New Democracy and the Socialists, which had previously negotiated the country's severe austerity program with the rest of Europe. It was a dramatic rebuke to Greece's traditional political leadership, widely regarded as corrupt and incompetent, and there is now a probability of another election in June. It is difficult to see how the country can meet a series of financial deadlines which lie ahead. This would likely mean pulling out of the Eurozone.

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It is widely believed, even in Germany, that Merkel was the big loser of last weekend's elections. She is expected to seek some sort of deal with France's Hollande because of the importance of the Franco-German relationship. But there are no signs the German government will compromise again with Greece. Overwhelmingly, German newspapers were of the view that French and Greek voters "have overthrown Angela Merkel as the dominant force" in Europe. The conservative German daily paper, Die Welt, added: "The election results are proof that Europe doesn't work. Every country still debates within its own national borders because there is no European public sphere."

The election of Hollande in France has accelerated the debate about "growth" versus "austerity" as a way of dealing with the current economic crisis. Hollande himself has argued that too much austerity smothers job creation and consumer expenditure. Another view was introduced this week by Jeffrey Sachs, the distinguished American economist from Columbia University who helped guide Eastern European regimes from communism to free markets.

Sachs argued that, in this debate, there is a need to move beyond the current extremes: "The headlines cry that voters demand growth rather than austerity. Yet growth is not a policy but an outcome. A vote rejecting the incumbents does not define the policy alternatives." Instead, he calls for what he terms as "structuralism", which is "increased public spending paid for with tax increases rather than deficits, to increase the role of government in education, jobs and banking recapitalization."

The European economic crisis is no longer simply a European affair. Regardless of how it turns out, it will have potentially devastating implications for Canada and the U.S. As the economic crisis of 2008 taught us, a banking crisis in today's world is inevitably contagious. No one knows how contagious it would be, except to remember what The Times of London wrote about the state of affairs exactly 100 years ago: " . . . precarious and ill-assured."

Tony Burman, former head of Al Jazeera English and CBC News, teaches journalism at Ryerson University. tony.burman@gmail.com