Guest Post: Europe’s Soft Coup d’Etat Part 2

21 Feb

Editor’s Note: This is the second of a two part analysis of the politics of the euro-crisis by James Heartfield. Part 1 found here.

In this current moment some of those who are standing up to the EU’s austerity packages have shouted about the attack on democracy. They think that the EU is attacking democracy so that it can push through its spending cuts. So it is. But much more so it is using the debt crisis to push through the abolition of national sovereignty. So often it has.

Two and a half years ago a very prescient sociology professor Ulrich Beck wrote ‘The crisis cries out to be transformed into a long overdue new founding of the EU’. Beck went on: ‘until now there has been no joint financial policy, no joint industrial policy, no joint social policy – which, through the sovereignty of the EU, could be pooled into an effective response to the crisis’. The only real barrier, thought Beck was ‘the national self-delusion of its intellectual elites’ who ‘bewail the faceless European bureaucracy’. (Guardian, 13 April 2009)

December’s Brussels summit, drawing its moral imperative from the sovereign debt crisis, ended with a commitment to create a much-greater coordination of economic and financial policy. Under the agreement national governments must submit balanced budgets, and face ‘automatic penalties’ if they do not. The thesis behind the agreement is that the southern European countries’ spending and indebtedness has undermined confidence in them and because of that in the Euro.

Shifting the blame onto Greece, Spain and Italy for the Euro crisis twists the truth. Throughout the buoyant years of the noughties the success of the European periphery was cited proof that the European Union was working. More, exporting countries, including Germany, were glad that easy credit boosted Greek and Spanish buying of their goods.

Apart from the economics, though, the important shift is towards ‘stronger economic union’. When the crisis began Greece’s troubles suggested to many that the European Union would ‘fall apart’.Professor Beck’s intuition that the crisis would drive the greater integration of economic policy proved to be as insightful as the fears that the whole thing would fall apart. Where he misleads us is in portraying this movement as a greater democratisation ofEurope. On the contrary, the trajectory is towards a much-diminished role for democratic oversight, and a much enhanced role for unelected officials dictating terms to elected governments. ‘Automatic penalties’ is European code for ‘not subject to political negotiation’.

The reason for the ‘automatic penalties’ is that as national elites European governments do not have the authority to see through tough measures. For many years now, governments have leaned on the European Union as an extra-national source of authority. Governments that are not willing to make the case for tighter budgets honestly in their own terms, have hid behind the claim that they must make adjustments to meet the external restraints imposed by Europe.  That is what Italian Minister Guido Cali meant when he said that ‘the European Union represented an alternative path for the solution of problems which we were not managing to handle through the normal channels of government and parliament’.

Not just Italy or Greece, but Britain and Germany sought again and again to ‘tie’ or ‘bind’ themselves into European Union rules that would limit the political temptations of excessive spending. Quite why sovereign states should choose to bind themselves and their successors in obligations that they cannot change or renegotiate is a conundrum for students of international relations. The answer to the puzzle is that these elites no longer derive the same authority that they used to from national electorates or constituent assemblies that once they did. Instead it is in the international summits, most notably the European summits that leaders feel secure, bound together in their mutual fear of the unruly electorates.

Fear of economic crisis is driving the integration of European policy, and it is not being consolidated as a democracy, but as a technocracy, where officials follow procedures, rather than make policies. Six years ago the voters of France and Holland voted down the centralisation of Europe under its then proposed constitution – which was abandoned soon after. Now, using fear of economic collapse, European elites have talked themselves into submitting to a more onerous set of impersonal and bureaucratic rules.

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3 Responses to “Guest Post: Europe’s Soft Coup d’Etat Part 2”

  1. brent February 21, 2012 at 2:23 pm #

    I noticed a remark about a week ago from Giscard d’Estaing (of all people!) to the effect that whatever body assumes authority for this new unified Eurozone fiscal policy should be located in Strasbourg, not Brussels, first to differentiate it from the Commission, and second, to draw it closer to the Parliament. Is the European Parliament a conceivable vehicle for introducing popular control or oversight into the new federated Europe? Constitutional changes would be required, but which exactly? Is there another model out there for how to evolve the existing structures into a federated but more properly democratic whole? As an American I fear that our own oversized, dysfunctional democracy isn’t much of a prototype, but is size the inevitable enemy of effective democracy?

    • James Heartfield February 21, 2012 at 3:13 pm #

      ‘Is the European Parliament a conceivable vehicle for introducing popular control or oversight into the new federated Europe? ‘

      As things stand, no, not the way I see it. Unlike in North America, there is no continent-wide political process that Europeans identify with, so that they could respect its authority. More, the European parliament could only assume authority in opposition to national parliaments and governments, which as things stand, still have a greater authority in the minds of most Europeans (albeit somewhat depleted).

      The ‘democratic deficit’ so much commented on in analyses of the European Union is not an incidental shortcoming, but written into the way that the Union has developed as an alternative to democratic control.

      Of course it would be a fantastic thing if Europeans could unite as one people to exercise power over their institutions, but as things stand there is only national resistance to European administration, and that is quite weak.

  2. Bryan Kavanagh February 27, 2012 at 7:02 pm #

    A thoughtful article (and comments). However, the democratic deficit isn’t simply a function of the EU. The “Occupy Wall Street” movement is also indicative of deep resistance to the bank suzerainty into which Americans have been delivered. This is incredibly galling when banking and finance, having failed the risk management test by lending into land price bubbles around the world in the first instance, now seeks to exact its pound of flesh – even as it implodes for its misdemeanors.

    Interestingly, if people are to recapture their place in democracies, there’s much to be said for the OECD recommendations to Germany and others to increase their land value capture via property taxes. Much the same has been recommended here in Australia by the ‘Henry Review’ of our tax system which recommended the abolition of more than 100 taxes (and their concomitant deadweight) and greater reliance for revenue on land tax and natural resource rent which cannot be passed on in costs. This would redress the phenomenon of diminishing land-based revenues over the last forty years which has seen people rush to ‘invest’ (read speculate) in real estate because they are taxed so heavily for being productive. People are not stupid: they can read the signals the revenue system is providing.

    Meanwhile, corrupted banking systems continue to rule the roost – and people have started to cry “Enough!”

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