Archive for February, 2009

Just as it was necessary to think beyond national protectionism in the 1930s, perhaps it is time to start thinking about life beyond the European Union.

The EU is afraid of its peoples

It could be that this crisis demands it.

It is going to be a sombre gathering when Europe’s leaders gather in Brussels for an emergency summit over lunch on Sunday Mar 1.

The EU faces its first economic crash, a disaster that is shaping up to be a once in a century event. Is it up to the job?

There is the spectre of intra-EU tensions around the Justus Lipsius luncheon table as leaders from big countries – that President Nicolas Sarkozy – tear up the rules.

Hurtling towards them is the prospect that bailing out the banks has merely transferred the “toxic” contagion to nations.

The coming crisis is a crisis of states not financial institutions. It will be a crisis of politics.

The EU is pretty resilient. It might just be able to contain the chauvinist French (or anyone else).

At a pinch, it can probably survive bailing out an entire country or two, depending on just how many.

But can the EU survive a crisis of the state?

The EU has always been a union of states rather peoples.

Its relation to the democratic European ideal is perhaps similar in effect to the financial sector’s warped and damaging dominance over the real economy.

The EU as a place where politics is conducted behind closed doors is ill-equipped to take people with them or to confront difficult questions.

The EU is learning a painful lesson: that its cosy consensus world of officialdom, diplomacy and contempt for voters, is not up to the mark when dealing with a full blown crisis.

Events have shown that the EU is better at puffing up fears about climate change, bird flu and other terrifying environmental perils than it is at dealing with a concrete problem.

Four interesting points:

In previous recessions the state used the crisis to identify (wrongly or rightly) elements of the social order that need restructuring – whether, as in Britain in the 1970s and 1980s, it is shaking out nationalised industry or smashing the trade unions. This has not happened in latest crisis.

Not a single EU country, certainly not Gordon Brown’s Britain, has yet come forward to spell how Western European states are going to make severe reductions in current forms of state expenditure. This seems to be a unique historical phenomenon in the face of an economic slump.

Nobody has set out any government or EU vision for how the economy is going to be reorganised during and after the shake out of a recession. There seems to be no vision of an economic future, it seems to be bailouts, heads down and hope for the best.

Out-sourced, privatised but bureaucratic member states, and the EU they created, have not tried to mobilise sections of the population behind a crisis programme. In fact, the EU seems more afraid of its populace than anything else. Margaret Thatcher could restructure 80s Britain because she won a political battle and social conflict for the national interest. The message seems to be “don’t worry your little heads, stay out of it”.

It is abundantly clear that institutions created for the benefit of diplomats and mandarins are not up to the job of stabilising febrile market institutions or getting cash (where it should be) into productive investments not dodgy bets on dodgier loans.

The problems the EU is facing are writ larger on the domestic stage, just as the European statist classes have embraced the EU, national statecraft has become dominated by fetishistic and self-destructive practices to which, we are told, There Is No Alternative.

Both the EU and Britain, with minor differences of degree and emphasis, have for over two decades been dominated by the liberalisation agenda, including constant diet of “deregulation” (doublespeak that often means more outsourced regulators or quangos) and privatisation (irresponsible horrors like the PFI).

This TINA agenda – totally dominated by tick box culture and the dreadful jargon that ensues when bureaucrats enter into a two-way Faustian pact with business – has clearly been more about states, such as Britain, ducking responsibility and outsourcing authority away from democratic accountability.

The proof? The EU, and its member states, are not up to the job of dealing with the current crisis, which has become one of global capitalism.