The struggle for Europe’s soul

The European Union (EU) marks its 50th birthday this month with no solution in sight to revive the stalled constitutional treaty. But with a raft of new proposals to further liberalise markets, it is too soon for the left to celebrate, argues Oscar Reyes.

March 1, 2007
13 min read

Oscar ReyesOscar Reyes is an associate fellow at the Institute for Policy Studies and is based in Barcelona. He was formerly an editor of Red Pepper. He tweets at @_oscar_reyes

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On 25 March 2007, Europe’s leaders will meet to celebrate the 50th anniversary of the signing of the Treaty of Rome, which laid the foundation for today’s European Union (EU). The occasion will be marked with a Berlin declaration laying out the ‘goals and common values of the EU’.

This will, no doubt, be accompanied by several bouts of backslapping, banquets and high-sounding bluster about peace and prosperity. There will be celebrations of a Europe at peace, and warm words about pooled sovereignty – if not explicitly in the sense of ‘ever closer union’, then at least some Blairspeak about ‘achieving more together than we can alone’. But when the conversations turn to a new constitutional treaty, the assembled heads of state may be forgiven for looking a little twitchy.

When Angela Merkel addressed the European parliament at the start of Germany’s six-month EU presidency, she announced her intention to draw up ‘a road map’ for the adoption of the constitutional treaty. ‘A collapse in that process would be a historic failure,’ she said, adding that a constitution was needed to ‘give a soul to Europe’. But this process is already in trouble.

Constitution at the crossroads

The constitution, as it was originally conceived, was a delicate compromise between the demands of Europe’s varied political elites. But when French and Dutch voters had the temerity to reject this fait accompli, they ushered in a ‘period of reflection’ from which the EU is only now emerging.

One immediate consequence is that referendums are now distinctly frowned upon.The EU president, José Manuel Barroso, who supported calls for a referendum when prime minister of Portugal and promoted a Plan D (‘for democracy, dialogue and debate’) in the aftermath of the French and Dutch votes, is now encouraging countries to ‘think twice’ before calling referendums on the constitutional treaty. He reasons that they make the approval process ‘much more complicated and less predictable’ – this unpredictability being, in fact, that people might once again come up with the ‘wrong’ answer.

This assumes that a common way forward on the constitution can be found. But a recent Madrid meeting of the ‘friends of the EU constitution’, involving representatives of the 18 countries that have ratified the existing treaty, showed the extent of the splits.

Spain’s foreign minister, Miguel Ángel Moratinos, called for the EU to expand the scope of the treaty – a ‘magnificent document’, which he insisted should remain the basis for any future settlement. But a senior French diplomat in Brussels dismissed the group as ‘the equivalent of a group of mourners showing their grief over a dead body’.

French support is crucial if any new treaty is to succeed, with much riding on the result of the presidential elections in May. Nicolas Sarkozy, the right-wing UMP candidate, now favours a ‘mini treaty’ that would include measures to create a European foreign minister, and promote the use of qualified majority voting – a measure likely to disenfranchise a significant number of EU states. His opponent, Ségolène Royal, favours a further referendum, and there is little to suggest that French public opinion has warmed to the constitution since the resounding ‘no’ of May 2005.

The British government has also set its eyes on a stripped down, mini treaty.

Here, too, a combination of popular pressure and press and political opportunism, could make calls for a referendum irresistible. Denmark, Ireland, the Netherlands, the Czech Republic and Poland also fall into the ‘sceptics’ camp – and would find it difficult to approve any document based closely on the existing constitutional treaty without a fight. Little wonder, then, that Merkel is now attempting to advance the debate behind closed doors, using bureaucratic ‘sherpas’ to sound out various governments’ bottom lines.

But those on the left who think that no news is good news and stasis the best result would do well to be cautious. For one thing, whatever the form that the revived constitution eventually takes, it is unlikely to address the fundamental problems that saw most progressive voters in France and the Netherlands reject it in the first place. ‘The member states will attempt to change as little as possible, while making it look as if they have made substantial changes,’ says Steve McGiffen, editor of European left website Spectrezine and author of The European Union: A Critical Guide.

The rejected constitution was an attempt to give existing EU policies a higher legal status, which, once agreed, would be extremely difficult to amend.

‘It was an attempt to fix some basic policies for decades to come, subjecting future generations to these economic and political choices of the present,’ says Erik Wesselius of the Amsterdam-based Corporate Europe Observatory.

Caroline Lucas, Green Party MEP for South-East England, agrees: ‘The constitution committed us to open markets, more and more competition, and the increasing militarisation of the EU. Putting those binding policy commitments in a constitution was a big mistake first time around.’ She sees some possibility that a pared-down version of the treaty might drop the third part, which accounted for almost three quarters of the original document – this, at least, would be a welcome development. But Erik Wesselius is less hopeful, emphasising that such a document ‘will not change the free trade, free market orientation of the EU’.

Crisis, what crisis?

A stalled constitution doesn’t mean a stalled EU, however. In June 2005, the Luxembourg prime minister, Jean-Claude Juncker, announced that: ‘Europe is not in crisis. It is in a deep crisis.’ But supporters of the neoliberal EU project might now be tempted to say: ‘What crisis?’ The EU is continuing its piecemeal implementation of aspects of the constitution regardless. For example, efforts to construct a European Defence Agency, which the constitution envisaged as central to the forging of common security and defence priorities, have continued without impediment. The EDA, included in the treaty as a result of heavy arms industry lobbying, is intended to advance common weapons’ procurement policies across the EU – which, in the context of an injunction that member states ‘undertake progressively to improve their military capabilities’, should mean lucrative new defence contracts.

More generally, there has been no fundamental change or reassessment of the EU’s neoliberal trajectory – the ‘period of reflection’ has left these fundamentals largely untouched.

In fact, several of the key EU initiatives since the ‘no’ votes on the constitution further entrench the EU’s free market stance. The EU budget of 864.3 billion for 2007-2013, agreed in April 2006, ties funding more closely than before to the Lisbon Agenda, which sets out the EU’s strategic objective to become ‘the most dynamic and competitive knowledgebased economy in the world’. This is true of both rural development – the Common Agricultural Policy which still accounts for the largest share of the EU budget ( 88.75 billion) – as well as the 45.5 billion allocated for the Seventh Framework Programme, which requires that EU-funded research be designed to enhance ‘global competitiveness’ through partnerships with industry and the private sector.

It is also having a pernicious role on debates in Brussels, according to Caroline Lucas. ‘Ostensibly about EU competitiveness, the Lisbon Agenda has come to be used as a crude instrument to attack valid and legitimate social and environmental legislation,’ she says.

The EU services (or ‘Bolkestein’) directive was intended to push the free market agenda even more crudely – in this case, by creating a single market in services. This was far from an unbridled victory for neoliberalism, with popular pressure in several EU states resulting in a compromise to remove its most controversial clause, the ‘country of origin’ principle – which would have meant, for example, that a company could employ someone within one EU country according to the labour standards of another.

The scope of the directive was also restricted, with some sectors, such as social housing, removed from its remit.

Yet the compromise text, as adopted by the council of ministers in December 2006, still contains measures directed towards further ‘market freedom’.

Ambiguities in its wording will give greater interpretative scope to the court of justice, which, if past experience is a guide, tends to rule in favour of greater competition.

In October 2006, meanwhile, EU trade commissioner Peter Mandelson launched a new international trade strategy, which emphasised EU ‘activism in opening markets abroad’. The Global Europe – Competing in the World paper promises new bilateral free trade agreements. The aim is to force countries and regions of the global South to open their markets to EU goods and corporate investment, denying them the range of economic protections and subsidies that most European countries have themselves used to further their development, and entrenching current global economic imbalances in the process.

Such policies are already being developed in the guise of EPAs (Economic Partnership Agreements) with African, Caribbean and Pacific countries, which threaten job losses and cuts in public services as new markets are opened up for European corporations.

Closer to home, a similar strategy is at work in the rapidly developing EU neighbourhood policy, which encourages economic integration and free trade with 17 countries bordering the EU from the former USSR, the Balkans and north Africa. This, too, promotes policies ‘designed to deliver further liberalisation and privatisation than has been agreed within the EU or within the negotiations on trade in services at the EU,’ according to David Hall of the Public Services International Research Unit.

EU enlargement has also been used to entrench liberalisation. Bulgaria and Romania, in common with other central and east European states joining the EU, had to prove their ability to operate a ‘functioning market economy’ before being admitted to the club. This has clearly had some positive effects, such as pressure to curb corruption, but these are offset by these countries’ terms of entry – which look designed to ensure that they remain on the periphery of an increasingly unequal, multi-speed Europe.

Beyond grand pronouncements about aims and values for the future, this range of key policies – which bring with them an array of new market openings and financial straightjackets – is already setting the trajectory for the EU’s future development. It may lack a soul, but the EU has kept its economic head.

Seeds of another Europe

‘Fifty years ago it was very clear what the European Economic Community was for: building peace in Europe through a free trade economic project. Now those economic policies have become a goal in themselves,’ says Caroline Lucas. ‘And that’s one reason why people feel distant from the EU, because economics have taken priority over environmental, social and other concerns.’ Rebalancing this agenda is crucial. In economic terms, this means a rejection of the EU’s one-size-fits-all prescriptions: the stability and convergence criteria that prescribe deregulation as the basis for political co-operation.

‘One of the dilemmas that you face as an EU critic is that nowadays it is hard to imagine how Europe would look without an internal market,’ says Erik Wesselius. But it is nevertheless important, he says, to conceive of ‘European alternatives that have genuine co-operation rather than the internal market’ as their focus, offering the possibility for a diversity of economic models rather than the current, one-sizefits all approach.

If the idea of a European social model is to have any meaning, then there are plenty of alternative economic measures that the EU could be taking, as Susan George of the Transnational Institute points out. These range from a tax on corporate profits, to a politically accountable central bank with a capacity to borrow by issuing bonds.

It is not just a question of economics, however. ‘It would be better to do less at EU level, but ensure that the EU is doing what needs to be done collectively,’ says Caroline Lucas.

‘Sustainability and climate change could offer a real focus for what the EU could add. It is clear that action by individual states is not enough, whereas the momentum of 27 states acting together, and taking these issues far more seriously than the EU is doing to date, could show that we’re serious about tackling these problems, and engaging with China and India on these issues, through technology transfers and our policies, whether contraction and convergence or any other fair formula. ’ Achieving these ends would require fundamental shifts in both the way that the EU operates and the balance of political forces at work within it. Yet the EU’s current political composition is hardly conducive to this – the European Commission and parliament currently have a centre-right majority, even setting aside the fact that much of the centreleft enthusiastically advocates further liberalisation. And the eastward expansion means that this is unlikely to change any time soon. As Steve McGiffen points out, ‘One of the broad effects of EU enlargement has been to move the whole political frame to the right.’

On a more fundamental level, though, it is the institutional basis of the EU itself that remains the key problem. From the Rome Treaty onwards, the EU has tended to isolate economic forces from democratic accountability. This is partly a result of ‘inter-governmentalism’ – the fact that EU decision-making ultimately rests with the European Council (of heads of government), who meet in secret.

The constitutional treaty promised limited improvements here, although what it offered with one hand it took back with the other – since, by giving neoliberal policy a higher status, it would have rendered meaningful discussion on the major economic issues, transparent or not, largely redundant.That settlemtnt remains in trouble, but its spirit lives on in both the EU’s existing constitutional arrangements and the policies that it produces.

This continued tendency to place liberalisation before democratic accountability is Europe’s true ‘historical failure’. Another Europe remains possible, and it is easy enough to imagine the principles on which it could be built – but it will be harder to construct the conditions under which its soul can be set free.

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Oscar ReyesOscar Reyes is an associate fellow at the Institute for Policy Studies and is based in Barcelona. He was formerly an editor of Red Pepper. He tweets at @_oscar_reyes

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