The political economy of the White Paper on The Future of Europe: Part Two

Owen Parker - Associate Fellow, SPERI, & Senior Lecturer in Politics, University of Sheffield

As I noted, the presentation of these scenarios is rooted in a welcome acknowledgement from the Commission that the EU faces a legitimacy crisis. The Commission is correct to point out that people across Europe do not have a good understanding of what are increasingly complex institutions.  It is also correct to point out that national actors often wrongly and unfairly blame ‘Brussels’.  In short, it is true that there is a crisis of supranational governance and for some this has led to a desire to return authority to the national level.

But in this blog I argue that such a governance crisis is one effect of a much broader and deeper crisis that the WP fails to acknowledge: namely, a crisis of neoliberal European capitalism.  This is a crisis that the integration project has in recent decades been culpable (in part at least) in producing and sustaining.

The failure to acknowledge this is reflected in the Commission’s brief refutation in the WP of EU responsibility for youth unemployment, when it dismissively notes that, ‘the [relevant] tools and powers remain in the hands of national, regional and local authorities’. This is indicative of a mode of thinking that wilfully ignores the ways in which EU market and economic and monetary integration, member-state politics/policy and questions of legitimacy and accountability interact.

But interact they do. Economic integration has precipitated a situation that Vivien Schmidt has neatly characterised as ‘politics without policy’ at national level and ‘policy without politics’ at EU level.  The EU single market and particularly EMU has at least contributed to a ‘hollowing’ of national democratic politics.  It has pushed party-politics into a delimited and necessarily market-endorsing space, reducing political autonomy for national governments and substantive political choice for electorates.  In relation to the above point about unemployment, this is a space where ‘full employment’ is no longer considered to be a viable policy option and ‘active’ and ‘flexible’ labour market policies are the order of the day for all mainstream parties.

The neoliberal capitalism of today’s EU has precipitated large and growing socio-economic inequalities between and within member states. In accordance with a broadly Polanyian logic, it has given rise in recent years to resistance of various sorts.  As we know, that includes not only (or even mainly) pro-social movements, but also anti-immigration, ethno-nationalist and Eurosceptic actors that pose an existential threat to the EU’s supranational governance.

Acknowledging these pathologies in Europe’s political economy suggests that ‘carrying on’ (scenario 1) may not be as likely or easy as the WP suggests. Indeed, it may lead to that which the Commission dare not even contemplate: a messy, even conflict-ridden, disintegration of the EU.

As to the other four scenarios, when we recognise this deeper crisis of European capitalism we see that they may ameliorate the crisis of supranational governance, but offer little in terms of fundamentally addressing or confronting its cause.  More concretely, while the Commission purposefully takes us beyond narratives of ‘more or less Europe’ – in thinking also about integration’s potential scope and ‘variegated geometry’ – it entirely neglects the question of the EU’s social and democratic purpose.

It neglects this when it considers scenarios that would – adapting Schmidt’s expression – upload the ‘politics’ needed to accompany ‘policy’ at EU level. Whether deeper integration is envisaged for a ‘core’ (scenario 3) or for all 27 members (scenario 5), it lacks a vision of a more social (or democratic) Europe.  It refers to the Five Presidents’ Report of 2015 as substantive inspiration, but that was widely regarded as falling short on, inter alia, proposals on banking regulation and fiscal union and did not mention integration on social policy.  In short, these scenarios do not foresee the full range of political counterparts to economic and monetary union that would give the EU the powers to pursue a robust social and democratic agenda.

It also neglects social purpose when considering scenarios whereby – again, adapting Schmidt’s expression – ‘policy’ capacity or autonomy at national level might be enhanced to accompany (and reinforce) what passes for national ‘politics’. For instance, when the WP reflects on the possible repatriation of policy powers to national level in scenarios (2) and (4) it fails to consider the ways in which the euro and associated economic governance has substantially constrained national economic policy-making (and democracy and social purpose) in the eurozone.  It does not consider an orderly disintegration of the euro or its potential benefits, as many on the Left across Europe have – in many cases, reluctantly – sought to do in recent years.  In short, these scenarios fall short in terms of returning full (socio-economic) policy capacity to national level.

Of course, it is hardly surprising that the EU in general and the Commission in particular fails to grapple with the underlying crisis of neoliberal capitalism when it reflects on the future of Europe. It is easier to focus on a crisis of governance as the core issue of concern rather than as the consequence of something more fundamental.  Even then – as the first blog on this topic noted – there are substantial political divisions with respect to the proposed scenarios.  The much deeper socio-economic and political integration or the orderly monetary disintegration that may, from a political economy perspective, offer the possibility of renewed social (democratic) purpose to the EU are at the current juncture political non-starters.  How to democratically achieve more social and democratic outcomes is a dilemma that is not easily resolved.

But tinkering with governance structures is unlikely to suffice. If the status quo is not to drift towards a messy disintegration that (further) threatens peace, democracy and cohesion then the question of the EU’s social purpose will need to at least be contemplated sooner rather than later.