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Any account of the European project today will have to consider the reality of a deep crisis, the possible failure of the project of European integration and an emerging new political landscape marked by a certain fragmentation of Europe between what could be characterized as Old and New Europe, North and South, a two or multi-tier Europe, or a generational clash between Eurosceptics and Europhiles and different forms of political mobilization. This chapter is an exploration of the extent to which it can be said that the European project has entered a new stage in which a more divided Europe is emerging in the context of an age of austerity and of what it means to speak of a crisis. The aim is to offer a framework to conceptualize the current situation of Europe, which can be variously described as divided along national lines or according to some other geopolitical or sociocultural category such as creditor and debtor countries. The chapter is concerned with the economic dimension of the crisis of European integration and of the wider model of democratic capitalism. The argument is that there needs to be far greater attention to the relation between capitalism and democracy in the making of Europe and that this is now undergoing a major shift in an uncertain direction. If a certain model of social capitalism—which can also be termed democratic capitalism—was the basis of European capitalism in the post-Second World War period, this is now in crisis as a result of major changes in the economy in both Europe and worldwide. The promise of European integration was prosperity and peace; the second has been delivered but instead of prosperity the reality for many people is austerity. There is a strong trend towards neoliberalism in many countries, and the Euro currency has imposed severe restrictions on national autonomy for several countries. As European economies enter into a period of low growth, if not stagnation for some, the relationship between capitalism and democracy becomes increasingly tense as new contradictions surface. This is a development that is not merely manifest on the level of European integration, but also occurs in national contexts since it is a problem that all kinds of state formation are faced with. In this chapter, it is argued that modernity is underpinned by two kinds of integration—systemic and social integration—and that as crises on the first become manifest, crises on the second follow. European integration was based on system integration but as this now becomes crisis-prone, new crises in social integration are emerging and these are shaping the political field. Such movements can be understood in terms of Polanyi's notion of a "double movement" where by disembedding processes driven by the capitalism market produce countermovements seeking social protection. However, in Europe today these take two forms, negative movements aimed at social closure and positive ones seeking democratic renewal.

DOI: 10.1007/978-3-319-95435-6_14

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