Frustration is currently sweeping Europe and for good reason: persistent unemployment, inequality, weak growth and a pervasive sense of powerlessness, to name a few. Unfortunately, the main political beneficiary is likely to be the Eurosceptic right, and even the extreme right. The left is failing to capitalise on the wave of popular frustration, mostly because it has no progressive Eurosceptic agenda to offer.
That is not to say that the left has no radical solutions for the ills afflicting Europe. It rejects the fiscal austerity that is devastating both economic activity and the welfare state; it advocates policies to reduce unemployment, particularly among the young; it favours redistributing income and wealth to confront inequality; it proposes controls over the financial system, one of the main culprits of the current malaise; it backs an investment drive to boost productive capacity and to rebalance the European economy.
The trouble is that the left refuses to acknowledge what is increasingly obvious to working people across Europe: these radical policies are impossible within the institutions of the EU. The Maastricht Treaty of 1992 ensured that the EU is run by privileged bureaucrats setting policy in the interests of big business, including deregulating markets and protecting finance. The European Monetary Union and the common currency launched in 1999 have created a rigid framework of permanent austerity, as well as Brussels- and Frankfurt-based controls over national economic policy. The eurozone crisis, far from changing things for the better, has actually hardened the conservative mechanisms at the heart of the EU.
The common currency has also made the EU more hierarchical, with a small core and several peripheries. At the top of the hierarchy sits Germany, currently enjoying unprecedented power across the continent, both within and without the eurozone. Strikingly, German workers have not benefited from this extraordinary development, since their own incomes have remained frozen, or risen very slowly, thus allowing German big business to dominate markets. The greatest loser is France, outcompeted by Germany within the eurozone, with poor growth prospects, large deficits, and its welfare system under strain. The future position of Britain in the new alignment of economic and political power in Europe is far from clear.
As the EU has hardened, its decision-making has become more undemocratic and even anti-democratic. In dealing with the eurozone crisis, for instance, the EU imposed unelected governments in both Italy and Greece, while forcibly denying the Greek people the right to hold a referendum on whether to accept their “rescue”. The sense of powerlessness and loss of democratic rights among voters is well-justified.
Moreover, immigration policy has been a shambles. On the one hand, the free movement of labour within the EU, without basic institutions to support workers in receiving countries, was never going to be a smooth affair in a continent comprising so many different languages and cultures. On the other, the “fortress Europe” policy of keeping out the unwanted masses of Africa and Asia has turned southern countries into a regular battleground, with immigrants held in camps in desperate conditions.
This potent mix of economic failure and big business favouritism now threatens to boost the extreme right as nationalist and racist ghosts have reappeared in Europe. The left should seek to counter this prospect, but not by calling for strengthened European integration in the hope of creating a “better” EU. The institutional mechanisms of the EU are too far gone to be reformed. They have to be dismantled and replaced. The left should, rather, voice the frustration of working people by sending a clear anti-capitalist message that combines radical policies with progressive Euroscepticism. Two steps are vital in this regard.
The first is to accept that the eurozone has failed irretrievably. Maintaining the common currency through political force and against all sense is actually throttling the economic life of Europe. Individual countries ought to be offered a cooperative exit option. The eurozone as a whole ought to be replaced by a system of managed exchange rates and controlled capital flows, thus avoiding a return to damaging competitive devaluations among nations.
The second is to realise that a single European state, whether federal or unitary, is neither feasible nor desirable. The fundamental reason is that there is no single European “demos”. Indeed, the eurozone crisis has shown that the mechanisms of the nation state can offer some protection against heavy encroachment by big business using EU mechanisms. The left ought to stress that the future of Europe is one of democratic cooperation among its peoples on the basis of equality.
The coming Euro elections are likely to deliver a hefty jolt to European politics. If the left heeds the message and develops a progressive Euroscepticism, things might begin to improve in Europe.