The Case for Europe 2016

Five years of stringent austerity politics culminating in the Greek debacle last summer have spread growing despair across the left about the present direction of the European Union. The inability to respond collectively and in a humanitarian fashion to the mounting refugee crisis during 2015 has exacerbated this frustration. Rather than argue for a progressive alliance to force policy change within the EU, some on the left are now wondering whether it would be better to give up on Europe and campaign for British withdrawal (see the New Statesman’s series during 2015 promoting ‘the honourable tradition of Eurosceptic leftism’). Such a move would be a big strategic mistake. The days of socialism or social democracy in one country are long gone. In an interdependent world, nationalism offers no bolt hole for the left. The task for all progressives is to find effective ways to engage with continental partners. In an age when economics, ecology and culture have leapt the boundaries of the medium-sized nation state, the only progressive option is to find ways to cooperate with neighbouring countries so as to offer a new blend of national and European politics.

This article considers the UK’s place in today’s interdependent world, firstly looking at the economic realities; and secondly at the wider environmental and cultural connections. It then answers some of the main arguments of the nationalist right and the policies that have held sway among many parts of the social-democratic left. The final section suggests a new pro-European agenda which can unite a broad alliance of progressives and rebut the narrow nationalism that is driving the anti-European movement.

The UK and the modern world

There is a common thread that runs through left-wing, anti-European arguments and binds them together with the Eurosceptic right, namely a refusal to recognise that over the last half century the world – and Britain’s role within it – has changed dramatically. They remain oblivious to the economic shortcomings of twenty-first century Britain, a few of which are listed below.

In 2014, the UK’s current account deficit was £97.9 billion, 5.5 per cent of GDP. This was the largest annual deficit as a percentage of GDP since annual records began and amounted to the biggest deficit of any major industrialised economy.1

The UK’s share of global exports since 1980 has fallen from 6 per cent to under 3 per cent and we still export more to Ireland (population 4 million) than we do to China (population 1.3 billion).

This is a country whose productivity per head is 20 per cent below that of France and which unlike our main European neighbours – Germany, France and Spain – is unable to construct high speed rail or extensive tram networks.

The fact that the city of London is a world leader in financial, banking and the related ’shadow’ financial services is often trumpeted as a counter argument. Yet, these sectors were largely responsible for the 2008 global crisis and remain basically unreformed. Their predominance serves to underline the continuing vulnerability of the UK economy.

The economic realities of the modern world remain largely absent from the EU debate. Since the Second World War, economic developments have moved beyond the boundaries of the individual European nation state. Along with the need to contain Europe’s propensity for deadly wars, this was the original impetus behind the European Economic Community. This has been the period, firstly of the developing multi-national corporation and then an era of unprecedented globalisation, with financial deregulation, the emergence of ICT technology and the opening up of the former socialist blocs. These developments have weakened the basic post-war settlement between capital and labour negotiated across most countries in Western Europe, a process accelerated over the last three decades by the ideological ascendancy of neoliberalism. Taken together, they mean that in the twenty-first century, politics can no longer be confined to the nation state. To control and regulate both markets and the environment one has to develop a model of multi-level governance which combines action at the European scale with that undertaken by individual national governments and their devolved regions and cities. These trends are not confined to Europe. Latin American countries are bonding together in Mercosur; Asian countries in ASEAN; and even the current global super-power, the USA, has been keen to develop NAFTA. This requires progressives in each of those regions to reach beyond national boundaries and work together with like-minded parties in neighbouring countries.

These trends are ignored by sceptics. Labour MP Kate Hoey declares that she wants ‘to get back to our parliament the right to make its own laws, the right to have complete control of our economy, to decide everything that relates to our own country …’ (New Statesman 19.6.15). Conservative anti-European MPs such as John Redwood and Bernard Jenkin use the same basic argument. Another prominent left-wing sceptic, Colin Hines proposes ‘returning to the nation state the power to control goods, money, services …’ (Guardian 23.11.14). These statements suggest that we can just turn back the clock. However, modern production has leapt nation state boundaries. Britain is part of a fully integrated European-wide economy. Look what happens when there is a closure of Eurotunnel. Suddenly the M20 is a car park with queues of thousands of lorries stretching back thirty miles. Consider our agriculture and food industry. Whenever a scandal or scare breaks out – BSE; turkeys; foot and mouth; horsemeat in frozen food – the intertwined, cross-European nature of food production is revealed.

In the twenty-first century, there is no way that economies and industries are going to be forced back into their national boxes. Look at the former British car industry. Scattered across the Midlands are the huge old factory sites of Rootes, Humber, Austin, Triumph, and Morris, now transformed into shopping malls, warehouses and mixed-use developments. These British companies will never return. The car companies that flourish are integrated with supply chains that link across the whole of Europe’s Single Market. Similarly, the choice as regards aircraft manufacture is either Airbus or Boeing. It did not look that way in 1967, when Boeing made four-fifths of the world’s commercial aircraft. However, long-term cooperation between French, German, British and Spanish companies means that the European consortium is now a serious rival to Boeing, with a full order book. Filton near Bristol and Broughton in North Wales, along with their 400 supply-chain companies and 100,000 jobs, prosper as a core component of an interwoven network of Europe-wide production processes. What is certain is that they would have no future as a separate British company. Hoey’s ‘complete control of our economy’ would guarantee them the fate of Humber, Morris and Triumph.

Being a full member of the EU allows the UK to contribute to the shaping of this Single Market; to formulate common environmental and employment standards, for example a guaranteed four weeks annual holiday for employees. It gives companies a market of 500 million people – not one a tenth of that size. Europe is the scale at which key parts of twenty-first century business operates. These companies invest in the UK as we are part of that wider market. It is the level at which progressives need to work.

Wider interdependencies

These connections and interdependencies are not just economic. They extend into the nooks and crannies of everyday life and require new forms of transnational cooperation to enable the countries and citizens of Europe to work together for their mutual benefit. Below I briefly consider three issues that highlight the fact that Britain can no longer stand isolated and aloof from Europe – tourism and travel, crime and climate change.

The EU has made travel immeasurably easier. In 2013 Britons made 42 million visits to Europe, including almost 12 million to Spain, 9 million to France and 2 million to Portugal and Greece.2 They used the airports, roads, public transport and tourist infrastructure that EU funds have helped to build across the Continent. These are all elements of the joint European story. But they never appear in any cost benefit analysis produced by UKIP or Business for Britain. British travellers benefit not just from the physical modernisation that these funds have promoted but also from the common passport procedures; the reciprocal health arrangements; and from agreements that control mobile phone charges. None of these would be covered by a free trade area. A few on the ‘workerist’ left try to maintain that these measures only benefit the well-off, ignoring the reality that millions of working-class Britons holiday abroad each year, as do many young people.

As the world has globalised, criminal activity, from fraud and credit card theft through to drug smuggling and human trafficking, has been internationalised, and the EU offers a political framework in which to tackle some of these problems. The UK’s ‘island mentality’ does not make it immune from the necessity to co-operate on criminal issues with fellow EU member states. There clearly need to be safeguards in place with regard to civil liberties, and the European Parliament needs to have strong oversight of agreed European-wide provisions. But UK withdrawal would involve the UK government trying to sign up individual agreements with police forces, judicial and prison authorities across 27 other EU states.

Climate change rarely figures as an issue among the Eurosceptic left. For UKIP, and people like Daniel Hannan MEP and John Redwood silence on this issue is no surprise, given the overlap between the nationalist right and climate change deniers. However, for progressives it is inexcusable, given the importance of the EU for this issue. By working together, the EU has been able to adopt common positions on climate change and influence the wider world in a way that would have been impossible for the UK to achieve on its own. And by setting out a common framework in its 2020 and 2030 strategies, Europe has cajoled and stimulated all its member states to take action on energy efficiency and renewables, in ways that would not have occurred otherwise (though there are of course back-sliders and foot-draggers among a number of EU member states – the present UK government included). The EU’s current main funding programme for Structural Funds sets very clear requirements that low-carbon activity should receive a guaranteed proportion of its funds, and its Research programme Horizon 2020 has a stream of funding instruments dedicated to low-carbon innovation and transition. There is a political contest about the significance of the environmental agenda within EU member states and plenty of shortcomings can be found, but there is no doubt that as an institution the EU has been in the forefront of those taking the climate change challenge seriously and has used legislative, regulatory and funding instruments to respond to the challenge. UK withdrawal from the EU will weaken Europe’s capacity to act.

Answering the nationalist right

The arguments of the ‘withdrawal left’ often echo the much more powerful and numerous voices on the nationalist right that are dominating the referendum debate. These tend to mix economic fantasy with nostalgia in equal measure.

On economics, the nationalist right maintains that a Britain liberated from the shackles of the sclerotic EU would be free to export to newly emerging markets. This simply ignores the fact that there is nothing to stop the UK exporting to these markets at the moment, other than the weakness and inadequacy of our manufacturing sector. After all, Germany currently exports ten times as much to China as we do, while the UK also has a lower share of the Chinese goods market than both France and Italy – countries the nationalist right frequently cite as having basket-case economies.3

On culture and history there are frequent references to our independent history and the fact that ‘we are a maritime people’.4 Yet the Portuguese, Greeks and Dutch, who all also claim a proud maritime heritage, remain comfortable within the EU. Today, the British still like to mess around in boats – some 800,000 own yachts and dinghies. It is just that we no longer build ships or have any commercial shipyards. So references to a ‘maritime people’ are just cultural hot air.

Politically, with the demise of the Commonwealth, the right are trying to create a new entity, the Anglo-sphere. This is a zone where the English can feel comfortable and do business with other people who speak English, in an Internet-connected world. ‘The revolution in technology means distance has never mattered less’, asserts Hannan. Again, this does not survive contact with reality. No US leader has ever called for such an Alliance, let alone tried to create one. Nor has Tony Abbott, the recent neo-conservative leader of Australia and an ideological soul-mate of the hard Right. His speeches and diplomacy leave no doubt that for his country the key reference points are Japan, China and Indonesia.5 Whatever the cultural ties of the past, the priorities for Australia today are its near Asian mainland. The reasons are simple: geography and economics. The same is true for Britain. No amount of empty rhetoric about the Internet can alter the facts that geography and economics tie us to Europe.

Cul de sacs of the left

In the twentieth century the left achieved social advances through the nation state. It is more difficult to see how to shape and influence this emerging new world order. As Pascal Lamy expressed it, ‘Historically, the success of social democracy was to promote a compromise between labour and capital, between the state and the market and between commercial competition and social solidarity. Globalisation has unhinged the balance by taking away all the domestic levers by which we maintained the compromise’.6 That is why talk about ‘building a new Britain’ is so unrealistic. Social democracy in one country is a non-starter in an interdependent world. With such an open economy, the UK trying to challenge international capital on its own would get nowhere. The fate that befell the Mitterrand government in France in the early 1980s should serve as a reminder to all on the left who talk in such casual terms. The task is to find new avenues for the social compromises that the left previously created. Yet the articulation of a strategy that combines the national with the European has so far proved a step too far for all parts of the left. Over the past two decades the social-democratic left has been led up two cul de sacs.

Firstly, for a brief moment in the 1990s, with the world economy booming and the optimism of the ‘end of history’ moment, a benevolent globalisation scenario seemed plausible to some in New Labour, all the more so when overseen by two such able rhetoricians as Bill Clinton and Tony Blair. As the Panglossian Peter Mandelson described it, ‘Globalisation offers all the best the world can offer. We must not sound as if we believe there is a tension between labour and capital, or competition and solidarity.’7 Such utopian optimism and naivety was soon to be exposed by global crisis. But perhaps the most damaging effect of Third Way social democracy was that, in its belief that issues of class were now old-fashioned, it left the field open to others. With Communism a busted flush after 1989, it was left to the nationalist, populist and racist right to exploit the grievances of older working-class communities and those left behind by globalisation. As the free movement of labour across Europe meant increased competition for manual labouring jobs and renewed pressure on housing, social and health services, the operation of the Single Market became a growing issue that the nationalist right was able to exploit.

The second dead end was German ‘ordo-liberalism’ – the mind-set that has hegemonised most of the European economic policy debate. In contrast to neoliberalism, ordo-liberalism emphasises the role of government in creating the framework of rules that provide the order for free markets to function. Their focus is on price stability, and in a recession the priority is to reduce deficits, not to revive growth. When commitment to ordo-liberal economics was enshrined in the Maastricht Treaty, too few people understood its significance, while others thought it could be ignored (as indeed happened in 2003, when Germany and then France broke the budget criteria with little consequence). However, the ideological and budgetary straitjacket of ordo-liberalism has been disastrous since the financial crisis. Social-democratic parties across Europe have sleepwalked into disaster; scared to embrace Keynesian economics, they have colluded with austerity. As a consequence, social democracy has disappeared as a force in Poland and Hungary, been butchered in Spain, massacred in Greece, and is stagnating elsewhere across Europe. This is the philosophy that currently pervades all the key EU institutions and policy-makers, and it still retains its grip on key parts of European social democracy.8 It calls the austerity policy a success despite Latvia losing 15 per cent of its population after pursuing it; Spain having a youth unemployment rate of over 50 per cent; and Greece losing 25 per cent of its GDP in five years. The policy has been absolutely lethal to the EU’s reputation for displaying competence and delivering economic prosperity. The events at the EU Finance Ministers and EU Council on 11-13 July, when the Greek saga came to a head, revealed the dangers of this rigid, deflationary policy and of a return to a German-led Europe.9

Charting a new course: promoting a social Europe

The Greek saga has been an unmitigated disaster for Europe: firstly for the Greek people but also for any prospect of a social Europe. The only silver lining is that it has clearly revealed the reactionary and regressive line of travel of the ordo-liberal leadership of the Eurozone. There are plenty of Europeans aghast and amazed at this old spectre returning to haunt Europe, especially when sane, practical alternatives are available. The historic question is whether European social democrats have the wit and energy to embrace them and then work together with others to construct an alternative scenario for Europe. Progressives in the UK should be clear that this crisis is not a private affair of those within the Eurozone: it directly affects all parties and movements that want to shape Europe in a progressive direction. To achieve this there needs to be a clean break with the twin orthodoxies that social democracy has followed for the last two decades and a concerted attempt to combine the national and the European in a new way to create a social Europe rather than an austerity Europe. To achieve this goal there are three immediate dimensions that need to be tackled: economics, migration and democracy.

Economics

On economics, the immediate task is to break with ordo-liberalism and its neoliberal counterparts. The rules of the Eurozone are not tablets of stone handed down by Moses. They are political instruments that wrongly prioritise deficit reduction over growth. That is why mainstream economists such as Joseph Stiglitz and Paul Krugman berate them so fiercely. These need to be directly and explicitly challenged, along with the policy sentiments of George Osborne and the UK Treasury, which follow the same basic path but with more flexibility and tactical acumen. However, those who argue that the priority is to change the architecture of the Euro are profoundly mistaken. The last thing the left should do is obsess about EU treaty change. The focus should be on changing policies now, so that there is much greater flexibility in the Eurozone, which would enable European economies to grow consistently.10

More broadly, the task across the whole of Europe is not to reject closer economic co-operation but rather to shape it along progressive lines. Economics has leapt the boundaries of the nation state. Our politics needs to do the same. Crucially, this requires European-wide action to reshape the operation of the Single Market and to prioritise green growth, focused on long-term investment in employment-creating jobs such as in housing and green technologies. Joint European action is also the only way to reassert control over the financialisation of the economy. The introduction of a Financial Transaction Tax would both exert some control over the excesses of the financial sector and bring in significant sources of revenue to be used for public investment.

Migration

The second key issue is migration. Social-democratic and Liberal parties across Europe have found themselves on the back foot on immigration. Here the right in its many guises has fused a variety of authoritarian, conservative and sometimes racist ideas of the threatening ethnic ‘other’ to more widely felt insecurities of a socio-economic character: ‘they’re taking our jobs; they’re taking our houses’. As working-class living standards have stagnated and the financial crisis has come to the fore, the consequence has been twofold: an explosion in electoral support for openly racist and populist parties of the far right and a tacking to this agenda by the mainstream right, dragging parts of the left in its slipstream.

Race and migration are the most volatile issues Europe faces in the early twenty-first century. Yet the reality of the past sixty years is that migration has fundamentally changed the face of Europe – and there is no going back. Third-generation Turks in Berlin, North Africans in Paris and Lyon, Latin Americans in Madrid and Barcelona, and African Caribbeans, Africans and Asians in London and Birmingham, are here to stay. And their contribution to the daily working life of our continent is immense. Just spend some time in an NHS hospital to see the reality of an integrated, multicultural workforce or consider who harvests Europe’s fruit and vegetables. The future of Europe is multi-ethnic. The political issue is how to manage these processes of change and where necessary deal with them on a cross-European basis.

Here there are three distinct dimensions: migrants from within the EU; refugees and asylum seekers; and migrants from outside the EU. The common thread of a progressive position on all three dimensions is that these should be managed processes not just left to chance or the market.

With regard to internal EU migration, at the moment, across the Single Market the free movement of labour brings with it substantial economic advantages for employers in terms of skilled, cheap workers. For the individual migrant, the large wage differentials between East and Western Europe mean that s/he gets new work opportunities and higher wages than are available in their own countries. But the social and cultural costs of large-scale people movements are not picked up by any public authority. This lack of provision means that the extra costs are experienced only by citizens living in the areas with large migrant populations – additional kids in local schools, where they often don’t speak the local language; extra pressure on housing; more people in doctors’ surgeries. When combined with the added competition in the labour market, with East Europeans often prepared to work for longer hours and for much lower wages, this adds up to a volatile cocktail and is fertile ground for racist groups.

Addressing this requires European-wide action and a reshaping of the operation of the Single Market. The economic benefits of migration need complementary social measures to ensure that economic efficiency is combined with social justice. Politicians created and shaped the Single Market, and they can reshape it too. Firstly, there needs to be a much stronger social floor, with common working conditions across the whole of Europe, and a Europe-wide minimum wage set at 50 per cent of the average wage within each country. Secondly, this should be complemented by the creation of a new, visible, policy instrument, a European integration fund, designed to give localities the resources to respond to the social costs of migration. Under its provisions, every EU citizen who works abroad in a manual job would have to register with the local authority, and for every person registered the authority would be able to claim €1000 per year. So, for example, if Madrid, Manchester or Munich had a thousand EU migrant workers coming to their city they would receive annually €1 million from the EU Integration Fund. The public authority would use this money to address the additional social pressures on schools, health and housing brought about by the free movement of labour. Combined with stronger trade unions, these measures would benefit all workers, and offer a progressive model of social-democratic politics that goes with the grain of economic development. These proposals will not remove the dangers of racism from European politics, but they will give a clear basis on which to challenge its socio-economic roots.

The issue of refugees has now exploded again across Europe, with the huge numbers of refugees fleeing Syria and or seeking to enter Europe across the Mediterranean via the failed state of Libya. States are obliged to accept as refugees those whose fear of oppression in their country of origin is ‘well-founded’, as the 1951 Geneva Convention puts it. The front-line states of Greece and Italy believe that this large influx of refugees – who are often fleeing war zones and mayhem to which European military action has massively contributed, as in Libya and Iraq – should be dealt with as a European issue with an agreed distribution mechanism across EU member states. The response so far has been miserable and the consequences of beggar-my-neighbour policies are already only too evident.

Those who believe in a Europe built on the values of the Enlightenment cannot respond by simply pulling up the drawbridge and refusing their responsibilities to refugees. There are no simple solutions here but facing down tabloid press hysteria and exaggerated claims is a starting point. Progressives should support the principle of a sharing of refugees between all EU countries, as was fiercely argued by Germany’s leading tabloid, Bild Zeitung.11

On the third but often intertwining issue of economic migrants from non EU countries, the EU should encourage specific labour agreements between countries so that there are regulated routes for work. More broadly, they should look to refocus the EU aid budget, which is the largest in the world. Rather than spreading it globally, it should concentrate activities in the Middle East and Africa so that educational and economic opportunities are promoted for young people, in order to reduce the pressures they face to emigrate. With Africa’s population predicted to double by 2050 while Europe’s remains stable, these migratory pressures will only increase even if African countries find routes to sustainable economic prosperity. Left, liberal and Christian democratic forces have to combine together and work with churches, aid organisations and charities to develop this three-pronged approach and confront the bigotry and hatred that is being generated on this issue.

Democracy

The Greek crisis has highlighted the serious deficiencies of European democracy, especially in the operation of the Eurozone. Both the Eurogroup and European Central Bank have been insulated from any democratic accountability mechanisms. This highlights a deep problem for the left, as it needs to find ways to operate effectively beyond the sphere of the nation state. This task has eluded most trade unions for decades, as they have attempted to bring together employees working for the same multinational corporation in different countries. Momentarily, popular movements such as European Nuclear Disarmament in the 1980s and the Occupy movement in 2011-12 achieved cross-European momentum. But it is hard to sustain. Yet the creation of popular movements, initiatives and representative structures at the EU level will be crucial to any progressive development, and here the world of the internet and social media offers new potential. A progressive strategy has to encourage cross-European civil society movements; a Continental-wide press; and new ways to bring citizens together. Here the proposal from Sigmar Gabriel and Emanuel Macron to extend the Erasmus student mobility programme so that all 18 year olds in Europe can study, work or have an apprenticeship experience in another European country is particularly important.12

The lynchpin of this process should be the development of a more dynamic and effective European Parliament. The parliamentary session in early July 2015 with Alexis Tsipras clashing with the Liberal Guy Verhofstadt showed some of its potential and took the arguments out from the closed doors of the Eurogroup and ECB. Strengthening the role of the Parliament has to be central to the democratisation process. Crucially this requires the parties of the left to be able to work together on a pan-European basis and develop a common platform. Syriza lost above all because it was isolated. The mainstream right through the EPP has successfully imposed an austerity politics on Europe over the last five years. Can the forces of the left come together over the next five years and articulate a programme for a social Europe?

Conclusions

We are living in dangerous times. Around the world today we are seeing the spread of aggressive nationalisms, from the ruins of the USSR to India and Turkey. Across Europe we see the re-emergence of old nationalist enmities and the creation of new ones. Occasionally, as in Catalonia and Scotland, this is primarily a civic nationalism which sees the potential of its political goals within a broader Europe. However, generally these are ethnic nationalisms defining themselves against an enemy ‘other’ – be it refugees, East Europeans, Muslims or, most commonly in the UK, just ‘Brussels’.

The left must not kid itself that there is a progressive bolt hole for English nationalism. There is not. The days of ‘honourable Eurosceptic nationalism’ are long gone. In the twenty-first century, to control the major forces shaping the world’s economy and ecology we have to move beyond the nation state. As the nation state alone cannot bear the strain it is precisely the task of politics to create new frameworks that can. That requires a Europe that acts as a new hinge to complement the nation state and enable politics to shape the economy in a wider regional setting.

The task for all parts of the progressive spectrum is not to mimic UKIP or the Front National and Marine Le Pen, but to show that it can offer an alternative model of globalisation that reshapes the Single Market and offers a future to all of Europe’s peoples. The common task for battered social democrats, progressive nationalists, social Liberals, Greens and new forces like Syriza and Podemos should be to develop an attractive vision of states working together on a range of issues that will provide a better life for EU citizens and opportunities for its young people. For progressives, developing a strategy for a social Europe is the challenge of the decade.

Notes

[1] Office for National Statistics. http://www.ons.gov.uk/ons/rel/bop/balance-of-payments/q4-and-annual-2014…

[2] Office for National Statistics Travel Trends, 2013

[3] UK Exports to China. FCO Economics Unit Jan 2013. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/211157/

[4] Daniel Hannan. Daily Mail 30 May 2015 For this and other quotes.

[5] http://www.liberal.org.au/latest-news/2012/10/15/tony-abbott-address-jakarta-business-luncheon

[6] See Robin Cook Point of Departure (2003)

[7] Ibid.

[8] The head of the Eurogroup Jeroen Dijesselbloem is a Dutch Labour Party minister, while German Vice Chancellor Sigmar Gabriel is the leader of his country’s Social Democrats and expressed fiercer hostility to the Tsipras government than Angela Merkel in June and July 2015.

[9] For a clear analysis of the dangers see Joschka Fischer: http://www.project-syndicate.org/commentary/return-of-the-ugly-german-by-joschka-fischer-2015-07

[10] An approach advocated by policy makers such as Philippe Legrain, economic adviser to President Barroso 2011-2014:

[11] See its dramatic 4 page special supplement Saturday 29th August and its #refugeeswelcome campaign.

[12] Proposal of French and German ministers Emmanuel Macron and Sigmar Gabriel