Stephan Shakespeare: Where is the political leadership on the €uro?

The experts tell us we're in a 24-carat financial crisis spearheaded by the loss of confidence in the euro. Two signs of our impotence and confusion are the high price of gold and the fact we draw solace from the possibility of China's intervention. In Germany, where there is a fierce euro debate, a YouGov poll for Bloomberg showed overwhelming opposition to bailing out the potential defaulters, and keeping the euro was supported by only a tiny margin – 48% to 44%. In the UK, by contrast, discussion has been muted. We should remember just how significantly we too will be affected by what happens in the Eurozone.

I argued here last week that it is incredibly hard for leaders to go against public opinion – not because they are weak or cynical but because all humans are hard-wired to crowd-source our decisions, we are dopamine-trained to think collectively within groups. In the traditional model of political leadership we imagine heads of state gathering their expert advisers together and working out rationally what the situation requires, without regard for public opinion. They then formulate a plan, and implement it within a strong communications campaign for support. But this rarely happens.

What is actually happening right now in Europe is rather different. Rational analysis by top experts does not yield a clear path. There is no consensus among leaders about the direction they believe is right; there is no clear dynamic of public opinion about the wider issues of Europe (a YouGov poll for the German newspaper Die Zeit a few weeks ago said that 43% would oppose a ‘United States of Europe’ with 35% in favour, while that proportion reversed in France). Even though the markets are telling us that the decision-less drift is further damaging the situation, and could itself drive recession, no-one wants to act under these conditions.

Angela Merkel feels committed to the Eurozone as currently configured but feels she cannot move without popular support. She is waiting either for a consensus to emerge, or for outside forces - the markets – to force the choice between uncomfortable and unpopular options. What neither she nor her fellow heads of state will risk is making a decision based on rational analysis (whatever that tells them) and then boldly leading from the front with open persuasion and action. They are navigating, not leading, public opinion. People are more concerned about being aligned with others than with rightness. And this isn't a criticism: natural crowd-sourcing is how society progresses, and certainly with this crisis anything else would be a mere gamble - both an electoral gamble and a gamble with our economy. On big contended issues, there is no rational best path. Not Treasury wonks nor financial traders nor Nobel Prize-winning economists know the answer. It is by the process of following each other, of being influenced this way or that by a myriad social clues, that we come to some collective decision which then allows leaders to act.

For the bold (or the foolhardy), today's public anxiety creates an opening for what we might regard as old-fashioned leadership. But it also increases the risks. There is little appetite for any risk right now. That leaves one positive thing our leaders can do: have a big public row over Europe. This won't happen, of course, but the party conferences really should start discussing Europe again, setting out the options and the likely consequences and then getting people – including their MPs - to really argue it out. That's the way to maximize the likelihood of coming to the right collective decision. Of course it's highly unlikely to happen, which is why we make such bad decisions about Europe.