Presidential candidates, European federalism and Charles Grant
In a recent CER insight Charles Grant offers a number of criticisms of themes in my book, ‘Turbulent and Mighty Continent: What Future for Europe?’ My basic thesis in the part of the work he criticises is simple. The coming of the euro has created de facto economic federalism at the core of the EU. The eurozone countries have become irrevocably interdependent. New forms of collective economic management simply have to be set up to manage that interdependence – and to cope with the strains and conflicts it has produced. The Union is so far only in the early stages of that process, which will have to involve fiscal mechanisms, and not only a banking union.
Economic federalism, I go on to argue, is not possible in the longer term without political federalism – in some form or other – because otherwise it has no effective legitimacy. The euro may have been set up in the usual EU fashion, as a back-stage deal between a few major states, but the consequence has been to undermine that very way of doing things. The traditional problems of the EU – lack of democratic involvement of the citizenry, and the absence of legitimate political leadership – can no longer be simply swept aside or disregarded. The surge of support for populist parties has its origin in this new situation.
Grant has several objections to this analysis. He doesn’t like talk of federalism, because it means ‘more Europe’. This isn’t something he wants, nor is it supported by the bulk of the electorate. He is not a fan of the European Parliament and he thinks the involvement of that body in the choice of a new president of the Commission is a mistake (he has made this point in a recent CER insight). Grant wishes to stick with the existing inter-governmental system, in which as he puts it, ‘the member-states (who in practice tend to be led by the big ones) should set the agenda and take key decisions.’
‘Politics in Europe’, he says, ‘remains largely national’. ‘Variable geometry’ (the principle that groups of member-states can integrate in particular policy areas, without the involvement of all 28) is the order of the day. Reform should be confined to such strategies as the greater involvement of national parliaments in decisions of European consequence. The euro, he continues, can survive and even prosper with the limited policies that have already been put in place. The antagonisms between North and South can be dealt with by relaxing austerity, encouraging economic reform and the writing off of a certain amount of debt. What Grant offers is more or less a business-as-usual scenario, give or take a bit of tweaking.
I find this analysis deeply unconvincing. The combination and the financial crisis and the travails of the euro have already transformed the political situation in Europe. Tinkering with the status quo is not going to resolve the issues that have to be faced up to. Such an approach recognises neither the scale of the problems to be resolved, nor the emerging forces that have irretrievably altered the political landscape. Largely because of the depth of its difficulties, the EU has become what I call in my book a community of fate. This is signaled by the fact that the EU is in the news almost every day in a way it never was previously – even in that most un-European of European countries, the UK. The challenge for pro-Europeans is to change that negatively charged consciousness into a positive one.
The recent European elections are the first to have been fought in some substantial part on European rather than strictly national issues. The populist parties that have arisen are mostly hostile to the EU and some want to see the end of it altogether. Some have noxious or wholly impractical ideas, or a mixture of the two. In an odd way, however, these parties are doing pro-Europeans a favour – at least if we respond in the right ways. They are helping to create a pan-European political space. Moreover, at least some of the basic issues the populists have forced onto the agenda are all too real. The system Grant seems to approve of – decisions taken by a few large states behind closed doors – is in fact a core part of the EU’s lack of accountability.
The leading candidate from the European Parliament to be the next head of the Commission, Jean-Claude Juncker, has been widely derided as colourless and a member of the establishment. Yet his name is in the frame as a result of a democratic process. If he is rejected as a result of horse-trading behind closed doors, the EU will be reverting to some of its worst traits.
Whatever happens, the involvement of the Parliament in such decisions is clearly no more than a beginning. If the EU is to achieve renewed stability, pro-Europeans simply must think more radically, just as the populists do. I want to see a lot of reform, even if it will take an extended period of time and, yes, ultimately treaty change, to achieve. I want an EU that is more open, democratic and flexible, as well as quick-acting in responding to a world of massive change. Federalism to me is more or less the opposite of what Grant takes it to mean. It is not about the centralisation of power but about finding a balance between effective leadership and democratic accountability. A new system of governance could and should be far more streamlined than the cumbersome and arcane set of practices that exist at the moment.
The eurozone countries should act as an avant-garde, since they can make significant innovations without treaty change. The work of stabilizing the eurozone is far from done – the euro remains vulnerable. For that reason, unlike Grant, I am sympathetic to the programme of far-reaching further reform set out by the Glienicker Group in Germany. As the Group observes, “Europe has structural problems that require structural solutions”. Contrary to what Grant says, there won’t be a great deal of scope for variable geometry, at least in sheer economic terms. I do not in fact argue, as he claims, “that most of the ten EU countries not in the euro will join it soon”. However, the majority of them are in line to sign up at some point and this expectation will inevitably shape their economic policy in a convergent direction.
A battle for the future of Europe will be fought over the next few years. To me the new narrative for the EU among pro-Europeans should be about maximising the benefits of intensifying global interdependence – which, short of catastrophe, is unstoppable – while muting its risks and dangers. I don’t accept that creating a more democratic, cohesive and effective Union means further sacrifices of national sovereignty. The picture is much more complex than this. One cannot give up something that has already been largely lost. Even when acting alone, member-states gain more sovereignty – real power to shape the world – by being part of the EU than they could ever hope to achieve as a disorganised gaggle of separate countries. To be effective in everyday politics, of course, these lofty thoughts must be brought down to earth and integrated with citizens’ concerns, hopes and fears. As the battle to reshape the Union unfolds, let’s take on the arguments of the populists in a direct way. Let’s do so by means of reason and the judicious marshalling of evidence; but let’s throw in a dose of passion too.
Anthony Giddens is a former director of the London School of Economics, a Labour peer and the author of ‘Turbulent and Mighty Continent: What Future for Europe?’.