A few months back I briefly commented on the ways in which different political science paradigms approached global issues differently, as illustrated by the TRIPs survey of academics:
IPE folks are the most convinced that at least one country will leave the euro. More than half of us. Meanwhile, only about 37% of IO folks and 30% of Europeanists think a country will exit the common currency. ...
I find this interesting for a lot of reasons, but mostly because I think provides a pretty stark reminder that political scientists think very differently about politics. This could break down along paradigmatic lines -- the authors of the report note that constructivists tend to be comparativists, while realists tend to be in IR. I still think that a materialist conception of politics carries me farthest down the road I wish to be on, so I think it is fairly likely that a country will drop the euro if things continue to deteriorate.Today comes two developments that are relevant to this discussion. First, and as recently expected, Nicholas Sarkozy lost the French presidency to Francois Hollande in an election that was widely viewed as a referendum on the EU's approach to the ongoing debt crisis, and in particular the Franco-German alliance to push Euro-wide austerity. Hollande has promised a new direction that focuses on growth, rather than austerity, and an unwillingness to let French economic policy be determined by Berlin. As such, the vote appears to be a rebuke of Sarkozy's cozy relationship with German Chancellor Angela Merkel, and a reinforcement of French sovereignty over European solidarity. (Ms. Merkel's party lost another local election, indicating that her citizens aren't especially thrilled with her policy course either.) The election was also notable for the fracture in France's right-wing parties, as the far-right nationalist National Front party received nearly one-fifth of all votes.
In Greece, meanwhile, things have taken a disturbing turn:
Greek voters appeared to radically redraw the political map on Sunday, bolstering the far left and neo-Nazi right in a wave of protest against the dominant political parties they blame for the country’s economic collapse.
The parliamentary elections were the first time that Greece’s foreign loan agreement had been put to a democratic test, and the outcome appeared clear: a rejection of the terms of the bailout and a fragmentation of the vote so severe that the front-runner is expected to have extreme difficulty in forming a government, let alone one that can either enforce or renegotiate the terms of the bailout.You can see what you want to see here. If you think that materialist concerns will dominate European identity in determining the path of the European Union, then there's plenty here for that: the rise of far-right nationalist parties especially, and not just in France and Greece. On the other hand, you could view Hollande's election as a sign that the austerity regime is on the verge of being replaced by a more generous system of transfers that will reinforce European solidarity and identity.
The elections were seen as a pivotal test, determining both the country’s future in Europe and its prospects for economic recovery and the outcome, along with that in France, could resonate far beyond Europe, possibly leading to more upheaval in the euro zone. The early results were also a clear rebuke to European leaders that their strategy for Greece had failed.
Many Europeanists have been expecting such a transformation of identity, from a nationalist identity to a European identity, over time. This is certainly possible in the long run -- think about how we used to refer "These" United States and now refer to "The" United States -- but there are a lot of short-run pitfalls that the European project will have to overcome first. We've had many reminders of these difficulties over the last few years, and for now it appears that the materialists have the upper hand.
I would be shocked if markets didn't respond negatively to these developments, and ultimately markets (and German voters) will decide the eurozone's future whether anyone wants them to or not. Greek voters have lashed out a number of times, but each new incoming leader finds themselves operating under the same constraints. They need money, and to get it they have to do what the lenders want them to do. If German and French voters decide that they're sick of paying then it doesn't matter who runs the Greek government... they'll have no choice but to default.
That, to me, is still the most likely outcome.