In recent years, the European Union has suffered through a cascading set of crises, including the Eurozone crisis, the refugee crisis, the security crisis, and Brexit. But rather than bringing the EU together, with concerted responses that would demonstrate its common values on its 60th anniversary, these crises have revealed cross cutting divisions among member states. What’s more, they have been accompanied by major crises of politics and democracy for the EU as well as its member states.
At EU level, questions are increasingly raised not only about the (lack of) effectiveness in solving the various crises but also democratic legitimacy. The causes are EU governance processes characterized by the predominance of closed-door political bargains by leaders in the Council and by a preponderance of technocratic decisions by EU officials in the Commission and the European Central Bank, without significant oversight by the European Parliament. At national level, concerns focus on the ways in which the EU’s very existence has diminished elected governments’ authority and control over growing numbers of policies for which they had traditionally been alone responsible, often making it difficult for them to fulfill their electoral promises or respond to their voters’ concerns and expectations.
The result has been increasing political disaffection and discontent across European countries, with a growing Euroskepticism that has fueled the rise of populist parties on the political extremes. In a world in which citizens have become increasingly dissatisfied with current economics, politics, and society, populist politicians have been able to find the words to channel their anger. Using rhetorical strategies and ‘uncivil’ language in a ‘post-truth’ environment that rejects experts and the mainstream media, they have reshaped the political landscape by framing the debates in fresh ways while using new and old media to their advantage as they upend conventional politics.
The underlying causes of the malaise fueling the rise of populists are known. These include the increase in inequality and those ‘left behind’, the growth of a socio-cultural politics of identity uncomfortable with the changing ‘faces’ of the nation, and the hollowing out of mainstream political institutions and party politics. But although these help explain the sources of citizens’ underlying anger, they do not address the central puzzles: Why now, in this way, with this kind of populism? And where are the social democrats?
How do Progressives Fight Back?
The rise of populism, in particular on the extreme right, constitutes a challenge to political stability and democracy not seen since the 1920s and 1930s. Progressives need to come up with new and better ideas that rally citizens around more positive messages that serve better ends than those of the populist extremes on the right. These need to be ideas that they can communicate effectively through the new social media as well as the old, and that resonate with a broad range of citizens. But which ideas, then?
With regard to economic and socio-economic ideas, progressives have some rethinking to do. Social democratic parties have yet to come to terms with their own complicity in the myriad of neo-liberal policies focused on liberalizing financial markets, deregulating labor markets, and rationalizing the welfare state that left large portions of the electorate open to the populist siren calls of the extreme right. Such policies, in many cases led by the social democrats in the name of a progressive agenda, benefited some people a lot: the top classes—not just the 1% but the upper 20% since 2008 —but not the in-betweens, who neither benefited from the boom for the top nor the welfare for the bottom. These are the people who feel left behind, and are! They are increasingly frustrated, resentful, and insecure; they are looking for explanations and answers; and only the extreme right speaks to them! But what it proposes—increasing protectionism and an end to free trade, dismantling the EU and getting rid of the Euro, closing borders to free movement and to immigration—are potentially disastrous for themselves, their countries, Europe, and the world. At the same time, the populists’ concerns ought not be dismissed out of hand, in particular with regard to protecting the welfare state and jobs, nor should the populist desire for more national control over the decisions that affect people the most be ignored. The questions are: How to do this in the context not just of globalization but also of the Eurozone crisis, with its austerity rules for countries in trouble, and its stability rules for all, which limit investment for growth. And what to do about the EU more generally, when it appears to control what national leaders can do, thereby limiting their responsiveness to their own citizens?
Progressive Ideas for the Eurozone
For countries in the euro, the EU needs to give back to the member states the flexibility to devise policies that work for them. The Eurozone has been ‘reinterpreting the rules by stealth’ for quite a while now, by introducing increasing flexibility in the rules and numbers while denying it in the public discourse. As a result, the Eurozone operates with suboptimal policies that, although revised to allow for improving performance, still haven’t resolved its crisis once and for all. Countries in Southern Europe especially suffer as a result. It is about time that political leaders—and progressives most of all—push harder for a rethinking of the rules, so that everyone can benefit from being in the Euro and, indeed, in the EU.
One way of rethinking the rules would involve making the whole exercise of the European Semester more bottom-up and flexible, rather than continuing with top-down ‘stability’ policies—however flexibly interpreted through derogations of the rules and recalibrations of the numbers. The Eurozone already has an amazing architecture of economic coordination, reaching into all its members’ ministries of finance and country economic experts. Why not use that coordination to ensure that countries themselves determine what works for their very specific economic growth models and varieties of capitalism? And get the new ‘competitiveness councils’ or the existing fiscal councils to act more as industrial policy councils rather than structural adjustment hawks. The countries’ decisions on the yearly budgetary cycle could be debated with the other member states in the Eurogroup as well as the Commission, the EP, and the Council to enhance democratic legitimacy. They might additionally be coordinated with the ECB to allow for greater differentiation in euro-members’ macroeconomic targets, to match their particular circumstances while fitting within the overall targets (see here).
Such a bottom-up approach is likely not only to promote better economic performance but also much more democratic legitimacy at national level. This is because it would put responsibility for the country’s economics back in national governments’ hands as well as encouraging more legitimizing deliberation at EU level. All this in turn could help counter the populist drift, as political parties of the mainstream right and left could begin again to differentiate their policies from one another, with debates on and proposals for different pathways to economic health and the public good, that they then discuss and legitimate at the EU level as well.
None of this will work, however, if member states continue to have to contend with excessive debt loads (e.g., Greece and Italy), if they are left without significant investment funds provided by banks or the state (e.g., Portugal, Spain, Italy, and even France), as well as if some countries continue to have massive surpluses while failing to invest sufficiently (i.e., Germany and other smaller Northern European countries). Some extra form of solidarity is necessary, beyond the European Stability Mechanism. Innovative ideas for renewal, such as Eurobonds, Europe-wide unemployment insurance, EU investment resources that dwarf the Juncker Plan, a EU self-generated budget, and other mechanisms for other areas of concern—including solidarity funds on refugee or EU migration—would be necessary. Failing this, at the very least member states should be allowed to invest their own resources in infrastructure, education and training, research and development, incurring long-term debt at low interest rates—without adding this to deficit and debt calculations, as under current rules.
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Progressive Ideas for Re-Envisioning the Future of the EU
Finally, we need to re-envision the EU itself neither as single speed or two-speed with a hard core around the Eurozone. Rather, it should be seen as multi-speed with a soft core of members resulting from the overlap of different clusters of member states in the EU’s many different policy communities, with different duos or trios playing leadership roles. Here, the EU could retain its appeal even for an exiting country like the UK, which could decide that it should reclaim a leadership role in Common Security and Defense Policy, as one of two European nuclear powers, while standing aside in other areas. Seeing the future of EU integration as a differentiated process of participation in different policy communities beyond the Single Market would thus also allow for each such community to further deepen by constituting its own special system of governance.
For such differentiated integration to work, however, with all member states feeling part of this soft core EU, whatever their level of involvement, they need to be full members of the institutions. This means that all members should have a voice in all areas, but vote (in the Council and the EP) only in those in which they participate. Since all members are part of the most significant policy community, the Single Market, this ensures that they will be voting a lot. (In contrast, non-members like exiting Britain or Norway would have voice and vote only in those areas in which they participate.) For the Eurozone, this would mean envisioning that where some members in future, say, pledge their own resources to a EU budget, their representatives would be the only ones to vote on it and its use, although everyone could discuss it (no separate Eurozone Parliament, then, but separate voting for members of a deeper budgetary union).
The knotty problem remains the question of politics and democracy. At the moment, the EU serves the purpose of the populists, by hollowing out national representative institutions, allowing populists to claim they are the true representatives of the people. To change this, the EU needs to do more to reinforce citizen representation and participation. For the Eurozone in particular, this at the very least demands more involvement of the European Parliament in decision-making, through a return to the Community Method. Turning Eurozone treaties into ordinary legislation, for example, would help break the stalemate that makes it impossible to change such legislation (given the unanimity rule), and make them subject to political debate. But the EP would also need to find more ways to bring national parliaments into EU level decision-making. And the EU as a whole must devise new means of encouraging citizen participation, from the ground up.
The response to the populist attraction is not to run after the extreme right in terms of policies—as the center right has done on immigration, for example—but rather to rethink the EU and its policies while reconnecting with the basic principles of social democracy and progressivism. Questions like ‘what does social democracy mean in the 21st century?’ need to be thoroughly addressed, to renew long-standing philosophies of social justice, democratic representation, and more in a still Europeanizing and globalizing world, with a new progressive narrative about what should be done. And what this must mean is not just considering the re-decentralization of certain policies, such as economic policy in the Eurozone, but also the globalization of others, such as corporate tax policy.
This comment is a shorter version of an article published in the Progressive Post online (April 3) which also formed the basis for a talk at the Foundation for European Progressive Studies (FEPS) Conference (March 21), “Looking for a Different Europe. Reflections and Perspectives,” to celebrate the 60th anniversary of the EU.
Vivien A Schmidt is Jean Monnet professor of European integration in the Pardee School at Boston University and honorary professor at LUISS Guido Carli University in Rome. Her latest book is Europe’s Crisis of Legitimacy: Governing by Rules and Ruling by Numbers in the Eurozone (Oxford University Press).