Tag Archives: Mitterrand

The political economy of Brixit

16 Jan

At the end of this week, David Cameron will deliver “the speech”: his much talked-about and endlessly-put-off speech on the place of the United Kingdom in the European Union. Choosing to give the speech abroad, in the Netherlands, Cameron is hoping to gain the gravitas of earlier famous speeches on Europe, like Thatcher’s in Bruges in 1988. After so much feverish speculation, the speech will probably disappoint. But it does raise the question of what exactly is going on with the UK and its relations with the EU. Is “Brixit” really likely? Does anyone actually want it to happen? Or is the debate only really about a more cosmetic recalibration of the UK’s membership of the EU?

The Current Moment has previously argued that were “Brixit” to occur, it would be rather in the manner of the “accidental divorce” of Slovakia and the Czech Republic: a curious historical event, where neither side was virulently separatist but a split occurred nonetheless. But how likely is “Brixit”? The Current Moment also suggested that it was unlikely given how implicated the UK is in the EU. The country is far more of a member state than its political leaders admit and finds itself active in the policymaking process even in areas where it has formally opted out.

Even if the UK doesn’t leave, current events still need to be explained. Why this particularly awkward relationship to the EU? Why the prominence of Eurosceptic movements like UKIP and the political classes’ fixation – above all on the Tory side – with reclaiming power back from the EU? Some of the explanation is historical: the UK joined later than many other members after having been rebuffed twice by Charles de Gaulle and made itself unpopular by trying to renegotiate its membership immediately upon entering. Thatcher’s long-standing battles against the European Commission no doubt left scars on both sides. But these explanations are too dated to have much purchase on events in recent years and they don’t explain the climate within the UK and the virulent anti-Europeanism of some its political class that is pushing a rather neutral David Cameron in the direction of “Brixit”.

One powerful argument is that the British establishment, and its political class in particular, does not need Europe in the same was as others do in the rest of Europe. There are various economic ties between the UK and Europe that make the case for EU membership rather strong, as Lord Heseltine and others have argued recently. But the political economy of UK membership in the EU is somewhat distinctive from other member states. In short, the UK has managed its transition away from postwar social democracy on its own, without too much reliance on the EU. Compare Thatcher and Mitterrand. At exactly the same time as the British police were – on Thatcher’s orders – fighting pitched battles against the trade unions, Mitterrand was undertaking his own retreat from Keynesianism via the European backdoor. Rather than take on the militant elements of the French working class directly, Mitterrand preferred to rely on European agreements as a way of slowly and partially dismantling the mixed economy model of postwar capitalism. Thatcher attacked the public sector directly, Mitterrand – and Kohl – did so indirectly via European directives. The same holds true for other countries – like the Netherlands, Belgium and Denmark – where old corporatist models of national capitalism were slowly reformed and wound down via a reliance on European agreements. From the Maastricht Treaty to the Lisbon Agenda to the present day Fiscal Pact, the management of socio-economic change across European societies has been conducted collectively at the European level. In the more extreme cases, like Italy, the vast swathe of the political class believes that macro-economic stability can only be achieved if the country is bound up tightly within a set of European rules. The Euro – with its Stability and Growth Pact and now with the new rules being introduced – was the apotheosis of this particular approach to governing national societies.

In contrast to all of this, Britain has generally managed the transition alone. Its own way of dismantling the postwar social contract was to isolate decision-making power from the authority of the national legislature. Politicians gave up powers to independent bodies, from the multiple national regulatory agencies to the Central Bank and the Office of Budgetary Responsibility. Decision-making was located outside of politics, but not outside of the UK as such.

For this reason, the British political class needs the EU and Brussels much less in the governing of British society. The EU is less tied up with the transformations of British capitalism than it is the transformations of national capitalisms on the continent. That leaves the door open to all the parochialism and xenophobia that animates the British political debate on the EU. This also makes it possible, though still unlikely, that the UK would leave the EU.

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