Friday, November 21, 2014

Europe and Anti-Europe

LONDON – The European Parliament election has set off a painful process of rethinking not only how the European Union works, but also what it is fundamentally about. The outcome made it clear that there are now two Europes: one in which the logic of integration is deeply embedded in the political system and the social order; and one that rejects the basic assumptions of pooled sovereignty.

The good news is that most of Europe is in the former category; the bad news is that the exceptions include two very large and powerful countries.

The debate about Europe is not simply a discussion of the merits of this or that institutional or technical solution to a problem of political coordination; it is about how societies can organize themselves successfully in a globalized world. Up to now, there has been too much emphasis on institutional design, and not enough on social dynamism and innovation.

Before the election, pro-Europeans regarded the upcoming vote as evidence that a new pattern of EU-wide democracy was emerging. Europe would look more like a country, with pan-European political parties proposing a top candidate (Spitzenkandidat as the Germans put it) to be the European Commission’s next president.

But Euroskeptics countered that the new political order would not work. Voters would treat the elections as they had in the past: an opportunity to protest – though not against Europe so much as against their own national governments. They would also vote against austerity, imposed as a part of the EU’s strategy to defend the monetary union.

Neither the optimists nor the pessimists were correct. No obvious European leader emerged from the election, and political haggling among EU governments over the next Commission president is likely to be prolonged and to look anything but democratic. At the same time, despite news headlines suggesting the contrary, there was no uniform wave of anti-Europeanism, or of disillusion with the European project.

Indeed, in many countries, including some of those most severely hit by the financial and economic crisis, voters turned out to endorse both their governments and the European project. The pro-incumbent effect was discernible in Spain and, most dramatically, Italy, where the new reform government of Matteo Renzi defeated expectations that Italians would deliver another big protest vote. In Eastern Europe, Poland’s governing Civic Platform outperformed the nationalist opposition, while voters in the Baltic states, where the economic effects of austerity were the most severe in the entire EU, endorsed centrist European Parliament candidates.

The unexpected weakness of the populist right in the Netherlands and the solid performance of the ruling Christian Democrats in Germany was a reflection of the same phenomenon: a new core Europe that is politically stable and self-confident.

Across the Rhine and across the English Channel, however, things look very different. In both France and the United Kingdom, the success of insurgent populist parties has shaken the political landscape. In both countries, the incumbent party – the French Socialists and the British Conservatives – were not only beaten, but finished third.

French Prime Minister Manuel Valls described the victory of Marine Le Pen’s far-right National Front as a political “earthquake.” And, though the Front’s triumph could easily be ascribed to the unpopularity of Socialist President François Hollande and his government, the parallel triumph of the UK Independence Party cannot be explained as a protest vote against the coalition government, which is delivering an economic recovery. The UKIP’s stunning victory was unambiguously a popular rejection of Europe, in particular of immigration from the EU.

The election outcomes in France and Britain reflect both countries’ deeper deviations from the European pattern. For starters, their imperial legacies constrain them to behave like nineteenth-century Great Powers, not as part of the globalized and inter-connected world of the twenty-first century. This is reflected in their economic models. In Britain, over-dependence on financial services reflects the view that finance is the central coordinating activity of economic life, which made more sense in the nineteenth century than it does today.

For France, the equivalent weakness is a proclivity for corporate gigantism. There are highly successful large industrial enterprises, most of them politically well connected, and tiny mom-and-pop businesses that are vestiges of a lost country. But the panoply of small and medium-size enterprises that make Germany and Spain entrepreneurial and economically successful is almost entirely missing in France.

Both Britain and France are having vigorous debates about how to change their economic models. Some reformers in government want more German-style apprenticeship schemes; there is talk of tax breaks for small businesses, and of easing excessively intrusive regulatory burdens.

It is difficult to see how either Britain or France can survive on the basis of nostalgia. Reforming both countries is as essential a task as reforming Europe’s creaky and complex political order. And that requires much more than just tweaking public spending and introducing some high-tech infrastructure projects; it means recreating the basis for a more dynamic society.

Domestic reform in Europe’s two large former imperial powers is also an essential element in making Europe work. While it is conceivable that the European project could survive without Britain, a united Europe without France is unthinkable.

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    1. CommentedCelt Darnell

      Re: "For starters, their imperial legacies constrain them to behave like nineteenth-century Great Powers, not as part of the globalized and inter-connected world of the twenty-first century. This is reflected in their economic models. In Britain, over-dependence on financial services reflects the view that finance is the central coordinating activity of economic life, which made more sense in the nineteenth century than it does today."

      Wow. You're as ignorant about economics as you are about history.

      Tell me, how is the Latinization of the United States coming along -- another nation whose imperial legacy constrains it to behave like a nineteenth-century Great Power, not as part of the globalized and inter-connected world of the twenty-first century?

      No wonder the American century is over.

    2. Commentedhari naidu

      I suspect if you don’t have historical perspective on EU/EEC integration developments, it’d be difficult to understand and appreciate the fundamentals of anti-EU votes in France and UK. Nationalism may be one factor but not the decisive constraint to *ever closer union*.

      France: Essentially it’s all about centrist structure of French politics. As long as Paris dictates ALL regional politics, it’s inevitable that centrist France will not survive globalization. In other words, it’s high time to decentralize France and its Amin Districts and invoke principle of subsidiarity and legally allow regional/domestic powers to originate policy and make final decisions. This is not going to happen without a real serious fight – Hollande is not the President to lead such a reformed French agenda.

      Recall, under Mitterrand, he was always Secretary of the Socialist Party, and never given a ministry to run. Why?

      UK: Limey’s never supported Maastricht Treaty & Euro currency introduction; they preferred their Sterling Pound and actually amused themselves at concept of Single Market and Euro! That’s 1980s! Now they want a FTA only – have your cake and eat it! - and no convergence on macro policy including Schengen and immigration. The decline and fall of Britain started long ago; UKIP may have found the ultimate anti-EU strategy to make a decisive move in that direction. And Scotland is going its own way too….

    3. CommentedSergejs Ancupovs

      Dear Harold,
      it is a very nice passage on two ways Europe an Anti. Let me add something to it. There is a very important reason In The Baltics for voting "for Europe", or better to say a reason created by the context with very different perception and reaction of recent geopolitical events. The Ukraine crisis. For all it is just a crisis. For Latvians (I am from Riga) - it is strongly connected with Soviet terror. It is a kind of subconscious fear growing in every heart of Latvians, fear of possible repetition of Stalin terror.
      This fear is a dominant factor which generates votes for Europe. Same in Estonia and Lithuania.

    4. CommentedDavid Olsen

      So Spain is the same as Germany, there is no 25% unemployment there.
      So Britain that has a conservative govt that has talked austerity but allowed its' central bank to finance the housing market by printing money and has its' own currency is the same as France that has a socialist govt that talks reflation but actually does austerity and is trying to encourage exports (that go to middle class rather than high end consumers), while french exporters are shackled by the euro and lack of demand in their core european export markets.
      The whole of europe cannot be a Germany or a Japan without deflating the world economy.

      Why try to group nations in the way that this article has? Oh, right to prove that all that is needed is structural reform (code for slashing wages) and then pretending that trying to export anything other than high tech, capital or luxury goods with such a high currency will actually be viable for a small firm.

      Stick your head in the sand if you like, avoid any discussion of reflation within the eurozone and see what happens.

      This political wave of discontent plus deflation equals disaster for the elites of the eurozone. I sure hope they don't listen to your advice.

    5. CommentedMK Anon

      I find very surprising to have yet another article that sum up the anti EU vote to an anti-migration or nationalistic vote.
      A comprehensive article would include the secret negociation of the Trans-antlantic market, the "detached worker" regulation and the bolkenstien regulation, the german lead monetary policy, the austerity, or the rejected-but-voted EU constitution, ...

      Mentionning also EU MPs wages and retirement plans, the >4000 lobbysts in brussels (for 700 MPs), the revolving doors in the commission and Euro central bank wouldn't hurt either.

      And what if all this anti-europe and far right/left protests was just a demand for democracy? The one that we are denied?

    6. CommentedZsolt Hermann

      Every healing requires an accurate diagnosis, finding the root of the disease, a so called "revelation of evil".

      As long as we maintain that there is a "good part" in Europe today, that there is a part that is truly working for integration in its pure sense, we are mistaken, misleading everybody.

      And this is the problem. If the European experiment truly was about integration, creating a mutually complementing Union, built from the ground up to benefit the people of the participating countries, it would have been plain sailing by now, with people, nations from near and far attaching themselves like bees to honey. Nobody would speak about separation, failure.

      But in line with the present human direction, thinking, goals the "Union" and subsequent expansion and all the decisions, "solutions" were and are about only the integrated markets and financial institutions.

      We forgot long time ago what human life is about, we think it is only about growth, aggregate demand, profit, the liquidity of banks and viability of markets. Only the "human", the fulfilled, happy human is missing from this picture.

      The European project does not need fixing, it needs a complete rethink and a new building from the foundations up.
      We will fail in any of our social, political endeavors until we do not put the human being, and the connection in between human beings as first priority.

      And in a global, integral world this connection and mutuality has to be global.

      If we managed to build a new system based on an optimally working, mutually complementing human network, our possibilities, prosperity would be endless. But one cannot build without secure and proper foundations.