The legacy of Mário Soares for a Europe in a crisis of sovereignty.

The leader of a party that would assume a political dimension greater than its connection to tiny Portugal might suggest, Mário Soares, of the Socialist Party, died as president of all Portuguese people, and as one of the most important architects of the European Union and the Eurozone. Like other political leaders on the continent, however, he probably died without knowing that the poison of the euro, manipulated by Germany, would destroy the European project through the absolute dominance of neoliberal economists over politicians.

The overwhelming majority of citizens, in virtually every country, sleep under the illusion that the politicians who govern them are wise in everything, including economics. The stark reality is quite different. From the rise of neoliberalism to the present day, it is economists, through diversionary concepts such as minimal state intervention, public sector inefficiency, and the advantages of privatization and globalization, who dominate the scene, subjugating political leaders, just as Margaret Thatcher and Ronald Reagan were victims of this ideology in their time.

Mário Soares was also a tragic victim of neoliberal demagoguery. Curiously, in his rhetoric, he positioned himself against neoliberalism. The same had happened with the socialists François Mitterrand in France and Bettino Craxi in Italy, who, like Mr. Jourdain who wrote prose without knowing it, practiced neoliberalism without realizing it, led by Reagan and Thatcher. A politically united Europe is a neoliberal construct under the guise imposed by Germany, the only true beneficiary of the European project, especially after the 2008 crisis.

To understand the German project of hegemony in Europe, we must temporarily abandon political paradigms. Germany is a first-rate commercial power, capable of generating immense trade and financial surpluses for decades. Before the euro, and after the breakdown of the Bretton Woods agreements in 1971, the only thing that bothered it was currency instability. In fact, with currencies floating, there was always the possibility of commercial gains for its partners through currency devaluation.

Then the Maastricht Treaty was drafted, imposing fiscal and monetary austerity on the signatory countries, and signaling the objective of a single currency in a monetary system. When this arrived, it resulted in the equivalent of a tremendous currency devaluation for Germany in relation to its old currency, the Deutsche Mark. Already competitive in world trade, Germany became even more competitive. And here comes the second act of the story: the effect of the high trade surplus on the internal functioning of the German economy, within the framework of the euro system.

In fact, with the single currency, the German trade surplus automatically becomes monetary expansion, boosting the economy in an expansive way. On the other hand, deficit countries suffer the opposite effect: a deficit is equivalent to reducing the internal monetary circulation, as money leaves the economy to pay for that deficit. This is the tragedy of the euro area countries, almost all of which have trade deficits. Contrary to what Mário Soares might have thought, this is not a problem that can be resolved solely at the political level. It is an economic one.

The eurozone countries, by ceding their monetary sovereignty to the European Central Bank, effectively governed by Germany, have no way out of resuming their development except by breaking the single currency agreement. Politicians in the region who don't understand economics think this would be the end of the great European Union project. It isn't. It's perfectly possible to maintain the political objectives of unity in several other fields without the perverse influence of neoliberal economics. The problem is that everyone is intimidated by the economic power of the large German banks.

Of course, there could be a way out while preserving the single currency. It would simply require the European Central Bank to act in coordination with the treasuries of the member countries, ensuring each of them a monetary supply consistent with promoting economic growth and employment. This is how the American economy works, in perfect coordination between the treasury and the central bank. However, to implement this in Europe, in memory of Mário Soares, would require leaders who would eliminate the economic legacy of neoliberalism.