The currrent failure of the EU and Italy
Sergio Cesaratto is Emeritus Professor of European monetary and fiscal policies, International Economics, and Growth and development at the University of Siena
Originally posted in Italian in Il Sussidiario
Translated by BRAVE NEW EUROPE
Photo from the Audiovisual Service website of the European Commission and is licensed under the Creative Commons Attribution 4.0 International license.
The EU has decided to support Ukraine with a €90 billion loan, and its Member States will increase defence spending.
After meeting with Volodymyr Zelensky in Mar-a-Lago, Donald Trump said that an agreement to end the Russian-Ukrainian war could be reached in a few weeks. Meanwhile, yesterday the Council of Ministers approved a new aid package for Kiev, and the last European Council of 2025 ended with the decision to authorise a €90 billion loan to Ukraine (for the two-year period 2026-27), guaranteed by the EU budget.
According to Sergio Cesaratto, former professor of international economics and European monetary policy at the University of Siena, the latter is certainly not a good decision, “even if the other option, that of stealing Russian assets, would have been politically a definitive declaration of war – in fact, we have been at war with Russia since well before the Russian invasion of Ukraine. But many people are already saying this, even though 90% of Italian journalism is embedded, in servile good faith, of course. Everyone knows how to behave in order to increase their income. Let me approach the issue from another point of view, where I can offer added value as an academic’.
Could you please explain this.
Many years ago, I had the good fortune to teach Development Economics at a political science faculty. In the meantime, I had come across International Political Economy (IPE), a sort of bridge between the traditional study of international political relations and the rather dry study of international economics. I felt it was only right to devote a few lessons to IPE. I adopted a textbook on International Relations by foreign authors (an American and a Dane) who were above suspicion, published by a publisher linked to Bocconi University in Milan.
It was around 2008. Reading this text (and many others, of course) enlightened me on the existence of two fundamental visions of relations between states: the “liberal” one and the so-called “political realism” one.
Can you explain these two views in more detail?
In the first view, the world is composed of good and bad: the former are “us”, the Western democracies, the latter are “them”, the diverse rest of the world made up of regimes considered illiberal. Democracies are for peace, authoritarian regimes are aggressive. Two world wars would bear witness to this.
On closer inspection, however, it is precisely the banner of democracy that has been waved by Western democracies, particularly the US, to justify numerous attacks on independent countries, the lastest being Venezuela, culminating in the infamous notion of “humanitarian wars”. I owe to a book by the late philosopher of law and writer for Il manifesto, Danilo Zolo, the denunciation of the severe limitations of this view and the introduction to another worldview, “political realism”.
According to the latter, the world is not made up of good and bad people, but (generally speaking) only bad people. The world is dominated by greed and self-interest, mutual fear and the consequent search for security. This is even more true for the great powers, which fear one another. Security is the key word.
What a terrible world, Professor!
It is the world in which we live, but we can improve it starting from what it is, not from utopias, which often hide pitfalls. It is the world of Thucydides, the first modern scientist (I learned this in secondary school from Geymonat), who studied the wars between Greek city-states in these terms, basing his work on facts rather than on the whims of the gods; it is the bitter world of the founder of modern political science, our Machiavelli.
It is the world of Thomas Hobbes, who sees the state as a social contract to end the condition of Homo homini lupus, but also leads us to view the effectiveness of international law and organisations in limiting latent hostility between states, caused by fear, as essentially non-existent. Academia is divided between these two schools of thought, particularly in the United States.
So is it for this reason, the fear of ceding sovereignty to a third party, that supranational institutions such as the European Union are unable to evolve into sovereign states?
Exactly. Not to mention the failure of the League of Nations first and then the United Nations. This is sad, of course, but we must be realistic. A brilliant young American pointed out to me, I think it was at Cambridge in 1990, that the end of the Cold War, contrary to what I thought, was a disaster because it destroyed a balance of power without establishing another. We now know that the desire of the winning side to win by a landslide, crushing the losing side through NATO’s expansion to the East, was at the root of today’s conflict on European soil.
Returning to the textbook I mentioned above, it did indeed discuss the dangers of that expansion, which are very much present in the international debate – Prof. John Mearsheimer, the well-known exponent of political realism whom anyone with basic intellectual honesty should have read (there are many Italian translations available), was already cited. Luckily a number of not embedded Italian scholars share similar views.
The dangers denounced in the book were, above all, well known to European leaders who, in fact, long opposed Ukraine’s entry into NATO (for example, at the NATO summit in Bucharest in 2008), only to be dragged into war by Biden. Of course, the stature of European leaders has changed dramatically.
But Professor, one could argue to you and your distinguished colleagues that Ukraine has a right to make its own choices, that acquiescing to Russia could fuel its appetites for the Baltic countries and perhaps for Europe as a whole. The spectre of the Munich Agreement, the appeasement of democracies towards Hitler, who then betrayed the agreements, hangs over us…
Yes, we have all discussed this countless times over dinner with friends. There are two aspects to this. Since the days of Gorbachev and Yeltsin, Russia has been seeking security, basically the same security that was guaranteed to it and the US at Yalta. It asked for this once the USSR collapsed, and it is still asking for it. The Europeans, on the other hand, are raving about deploying intervention forces, which is precisely what is fatal for Russia (Russia is also asking for territory, but that is the least Putin must now offer his public after thousands of deaths; however, I believe that the request for security is the priority). Of course, this violates Ukraine’s freedom to join NATO.
Dear fellow diners, choose: do you want peace or war? Thucydides’ bitter message is that security (for the strong) and peace (for the weak) imply limited sovereignty for the latter. Has Italy not been a country with limited sovereignty since the Second World War? With peace in security and a minimum of restored trust between states, it is possible to build and prosper. War, on the other hand, is the end of everything.
And the Munich Agreement?
One of the founders of modern political realism, the English Marxist historian Edward Carr (1892-1982), initially supported the Munich Agreement but then changed his mind once Hitler’s broader ambitions became apparent. Political realism can also mean avoiding illusory appeasement. But what is this supposed to prove? Is it better to go to war immediately? And are we really sure that Putin has the conquest of Europe in mind or that, perhaps, the problem was the threat of the de facto and perhaps de jure extension of NATO to his borders?
I think these are things we have said to each other a thousand times over dinner. Of course, Russia will not be satisfied with security guarantees alone, but these guarantees and the prospect of reopening trade talks may well soften the Kremlin’s position. Is it possible that Trump understands this and many of my friends at dinner do not?
The point is that Trump, a businessman, is a political realist, while my friends, all former dreamers of socialism, are now enchanted by the simplifications of liberalism: “dying for Gdańsk” is a matter of principle, Ukraine has the right to decide its own destiny, whatever the cost (to us). The good guys against the bad guys.
I suggest instead that we seek appeasement and, if we are able to do so, use the 90 billion to strengthen European defences (with European weapons, research and investment), without identifying a pre-established enemy. Si vis pacem… Let us therefore play the peace card by proposing the resumption of economic and cultural dialogue with Russia. Europe’s problem is that it is unable to coordinate its defence or support a peace process.
For the loan to Kiev, recourse is being made to joint borrowing, and the ECB has shown itself to be in favour of Eurobonds to finance investments in EU defence… Isn’t it a little curious that for other purposes, debt mutualisation in Europe remains taboo?
Unfortunately, as political realism clearly explains, but my friends who were raised on communism and have now converted to liberalism fail to understand, Europe is a gathering of nation states that do not renounce their sovereign prerogatives, let alone pool their debt, armed forces or technologies. Look at France and Germany, which are unable to move forward with the new-generation fighter jet project because the former will not relinquish its leadership.
In the current situation, given the legal risks of confiscating Russian assets, there was no alternative for Europeans but to issue joint debt to support Zelensky’s ambitions. Let’s be clear: according to qualified international observers (such as Eurointelligence.com), the confiscation was a deliberate European obstacle to the American peace effort. And on that note, let me say a few words about Elly Schlein (the leader of the main opposition social democratic party).
Yes, do.
I do not like Meloni, who is the antithesis of all my values and attitudes. However, it must be acknowledged that her opposition to the seizure was the decisive factor in avoiding such an unfortunate outcome. Schlein and her party, which favours the continuation of the war (and whose leadership must unfortunately be attributed to President Mattarella), have proved to be unfortunate. All Schlein has been able to do is accuse Meloni of hospital waiting lists, etc., without openly expressing her views on what was at stake at the European summit, as if the continuation of the war would not have a negative impact on social spending.
The institutional left has left the banner of pacifism to the right, and that is the real tragedy. And where is comrade Landini, the leader of the left-wing trade union CGIL?
Meanwhile, in the autumn package of the European semester, some emphasis has been placed on the need for Member States to increase defence spending. What do you think about that? And what do you think of the safeguard clause that has been included in the Stability Pact for defence spending? More than half of the Member States have asked to be able to take advantage of it…
What I suggested above should please my neo-liberal friends: facilitate peace negotiations with Russia and use the 90 billion in common debt to slowly and systematically upgrade European defence systems, rationalising joint arms production in order to boost employment and technological progress in all countries (in the US, military spending is the main driver of innovation). But then I start to laugh.
Why?
What we would actually have is a disorderly increase in spending, some real, some fake, each on its own account, with no major military or economic effects, and with cuts in social spending.
What is your opinion of those considered to be the “leaders” of European institutions? The ECB, the European Commission, the Franco-German axis: who is leading Europe today?
Germany is totally incapable of leadership. It demonstrated this during the crisis of the last decade when it imposed unnecessary fiscal austerity measures on our country, and on others of course. In doing so, it caused itself and Europe to lose a decade in which China and the US gained a technological advantage. The European Commission lost the green challenge, which, although its objectives were clearly justified, was not well thought out.
The point is that Europe regulates, thinking that the market will do the rest. Germany thinks it can get by producing Leopard tanks instead of Audis. We know how that ended in the recent past. France is impossible to understand. They are all in disarray. Military spending, repression of dissent and external enemies are the classic palliatives for staying in power. And on the subject of repression of dissent, let me get two more things off my chest.
Many have already been removed, but tell me.
The first is the firm condemnation of the somewhat squadrist-style eviction of Askatasuna and other community centres. This erases realities that are often the only space for humanity and sociality in large areas of cities. Of course, unacceptable actions may have come from there, such as the assault on the editorial office of La Stampa, or the usual clashes following peaceful mass demonstrations (since I was a child, I have detested the autonomous fringes that caused trouble). But I do not believe that the leadership of such actions (if any) can be attributed to social centres as such. Unfortunately, they do not distance themselves from those who fall, either stupidly or consciously, into traps and provocations.
Unfortunately, I doubt that the press would investigate the positive and non-violent functions of these gathering places without prejudice. The same firmness is not used for much more violent, degrading and criminal phenomena such as football hooliganism inside and outside stadiums.
The second issue is the profound sadness and indignation at the substantial silence of the media and politicians regarding the genocide. The main cause of the genocide is the state of Israel and its armed forces: bombs, missiles, drones, bullets and now the embargo of most humanitarian help. This has resulted in further consequences: malnutrition, cold, disease and degradation suffered by the entire childhood and adolescence of the people of Gaza, who are growing up with incurable physical and psychological defects. Jewish brothers, stop.
And here I stop too.
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