Thursday, November 27, 2014

Europe’s Next Great Mistake

PRINCETON – In constructing Europe’s monetary union, political leaders did not think through all of the implications, which led to major design flaws. Worse, they do not appear to have learned from that experience, for they are about to take the same approach to the monetary union’s political analogue.

The logic of the financial crisis is driving Europeans toward greater integration, which implies new mechanisms for political expression. Well before the crisis, the European Union was widely perceived to be suffering from a “democratic deficit.” Now, with many Europeans blaming the EU for painful austerity measures, that complaint has grown more powerful – and Europe’s political leaders believe that they must act now to address it.

Unfortunately, Europe confronts another deficit: a lack of political leadership. The charismatic figures of the mid-twentieth century – Churchill, Adenauer, and de Gaulle – have no contemporary counterparts. Citizens associate the EU with, above all, bureaucratic grayness and technocratic rationality.

European officialdom is now responding to these deficits with an initiative to reform and democratize the European Commission. Current Commission President José Manuel Barroso suggests that ideologically like-minded political parties running in the next European Parliament elections should intensify their cooperation in political “families” that would then jointly nominate candidates for the Commission presidency. Voters would thus play a more direct role in choosing a new European chief executive. They would feel as if they were appointing a government. And politicians would need to beef up their charisma in order to be elected.

This approach has been supported by luminaries such as former British Prime Minister Tony Blair. Because it apparently does not imply any real loss of power for national governments, it has achieved a certain acceptance and seems close to being implemented. But that does not make it a good idea. In particular, the perceived need to channel Europe’s existing political families into a two-party system, with social democrats on one side and “people’s parties” on the other, is deeply problematic.

The two-party parliamentary model emerged in nineteenth-century Great Britain. Electors chose only a representative for the House of Commons, and the majority party then appointed the prime minister. The contemporary British comic opera Iolanthe celebrated the fact that “every boy and every gal that’s born into the world alive is either a little Liberal or else a little Conservative.” But what if not every little boy and girl is born that way?

In the stable British model, if a political party is too radical, it will lose the political center in the next election. The parties’ rivalry is healthy, though there is a built-in tendency to seek solutions that command a broad social consensus. But such an institutional outcome is not inevitable (and it probably no longer endures even in contemporary Britain).

British lawyers liked to recommend this model to other countries. They were especially persuasive in Britain’s former colonies, notably in newly independent African states. The results were disastrous. Citizens could not understand why they should be expected to align their political preferences along a simple left-right spectrum. Instead, politics was usually recast in terms of old inter-group or inter-ethnic tensions.

The contemporary United States also is not a compelling demonstration that competition between two parties leads to increasing moderation and political centrism. On the contrary, the partisan struggle can play to the parties’ extremes.

The two-party moderation thesis makes sense only if the main differences concern redistributive preferences in a simple model driven by an almost Marxist kind of economic determinism. The left-wing party wants to redistribute wealth and incomes more, and the right-wing party less; but both need to restrain themselves, and in appealing to the median voter, they become near-identical alternatives.

In a globally inter-connected world, however, a new politics has developed, in which both the left and right fringes fear that outside competition or influences will limit their ability to shape political choices. Their main political preference then becomes resistance to those external threats. The old left-right polarity no longer works.

Artificially creating a new European polity split between left and right would create new struggles – and intensify old ones – about redistribution. The only thing that would hold the left together would be the claim that there should be more redistribution: but to whom, and according to what mechanism?

Nor is it clear that Spanish socialists have more in common with German social democrats than with their fellow nationals. Each ideological grouping would most likely become factionalized along complex national lines – divisions likely to be reflected in the ensuing competition to be charismatic. Instead of encouraging new Churchills and Adenauers, the result might be new imitators of Hitler or Stalin.

There is a better model, one developed in a linguistically, culturally, and religiously diverse test-tube in the geographic heart of Europe: the Swiss model of Konkordanzdemokratie. In the Swiss system, several parties compete, but they do not aim to control the government exclusively. Instead, all the major parties are represented in the government, and are consequently obliged to hammer out compromises. Members of the federal government are driven by regional loyalties at some times, and by ideological commitments at other times; they all need to be negotiated when making decisions.

The Swiss solution of electing an all-embracing and balanced government tends to produce boring and uninspiring politics. Famously, few people know who even holds Switzerland’s annually rotating presidency.

Charismatic politicians act by polarizing, galvanizing, and mobilizing supporters; routine politics, by contrast, requires maintaining a low profile and being willing to strike compromises. Europe today does not need inspirational leaders who can whip up a populist frenzy. Instead, it needs locally respected leaders who are capable of working in a complex and multi-dimensional political world.

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    1. CommentedAntónio Correia

      The Maastricht Treaty was announced as a "great leap FORWARD". Since then, only "FORWARD moves" have been allowed in the Maastricht-born "European Union" - mainly the creation of the "single currency" and the birth of a Eurozone with more and more states involved, according to their will and their capability of meeting the doubtful set of "Maastricht criteria" when joining the "single" currency area. Any move which may be seen as a "backward move" has been strictly forbidden, even if nobody can take for granted that this disunited "European Union" is moving forward to something that looks like the promised land. In fact, it is increasingly clear that this road is a "road to nowhere", besides being increasingly painful for more and more member states - namely within the Eurozone - to go ahead, under the approach which has been adopted to "keep the markets calm" and "save the Euro", while avoiding the appropriate fiscal transfers and resorting to lending under AUSTERITY constraints. In these days, the European Union is again following the recommendation: "Keep moving FORWARD, either slowly or rapidly, either jointly or at several speeds!". The democratic choice of the future President of the European Comission is just another small, quasi-irrelevant step (in the "correct" direction!), since it "does not imply any real loss of power for national governments", namely the german one, and also for the European Council where they participate and make the crucial EU decisions.

      Yes, as Paul Krugman recently said, "The Euro is a shaky construction". Besides ignoring the macroeconomic imbalances within the EU, in the "Maastricht criteria" for Eurozone membership as well as in the subsequent "stability" pacts, the Euro has been designed and confirmed – by Delors et al and followers – as a "single currency" instead of a (much more realistic) "common currency". Now, it is very clear that this was a very bad choice, namely because other components of Delors's dream are missing - such as a European budget amounting, at least, to some "3% [!] of the European GDP".
      Two decades after the Maastricht Treaty, a COMPLETELY NOVEL EU TREATY is mandatory - not a mere set of "positive" , incremental amendments -, as soon as possible, so as to avoid a sad situation, in the near future, where the foreseen "European common home" becomes replaced by a true "European house of correction". We need to build a true European Union through a cooperative European disunion, where the Euro survives as a "common", parallel currency - including for the UK and the other nine "non-Euro states" - but no longer as the "single currency" for a fraction (currently 17 out of 27 member states) of the EU :

    2. CommentedMary-Ann Faroni

      I agree that Europe is lacking political leadership and that the Euro has major design flaws (and fiscal union will not happen).
      BUT, looking at the USA, the EU, and the Eurozone confirms to me every single day that I would much rather have our "boring and uninspiring" Swiss politics than the mess and chaos in other countries.

    3. CommentedSara Magdalena Goldberger

      The EU is currently hammering out the particulars for setting in place European Parties. Knowing Europe the result will probably lie somewhere closer to Switzerland than the US. But hopefully it will drown Baroso's idea and make the EU [slightly] more democratic.

      Also I am surprised that he seems to think that there is only two political systems in Europe, the UK and the Swiss. But what about France, Germany and small Sweden? There are three countries with a rather healthy debate, strong democracy, conflicting parties and sometimes quite charismatic leaders.

    4. CommentedSara Magdalena Goldberger

      The EU is currently hammering out the particulars for setting in place European Parties. Knowing Europe the result will probably lie somewhere closer to Switzerland than the US. But hopefully it will drown Baroso's idea and make the EU [slightly] more democratic.

    5. CommentedCarol Maczinsky

      The central issue is not EU figureheads but ideology. We will see a gradual ordoliberal takeover of what is currently governed by pro-competitiveness industrial policy at the Commission. Austrian school will rule. All nations and all parties have their Commissioners, and the European Parliament is extremely broad and diverse. It is not a two party system but a multifragmented system which works very well, because it leaves enough policy space for gifted Members of Parliament