CAIN: Democratic Dialogue: Politics: Continentally Challenged (Report No. 5)

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Continentally Challenged

Future imperfect

The post-Maastricht referenda marked a watershed in the evolution of the European Union. As Eddie Moxon-Browne has written,

The 1990s witnessed an apparently widening gulf between the determination of élites to pursue the consequential and collateral policies associated with the single market, and a wariness on the part of European electorates as to the content, scope and direction of these policies, never mind the institutional mechanisms for achieving them. Put another way, the 'permissive consensus' which had long been taken for granted by governments, and had allowed them to assume at least tacit support for integrative policies in the 1980s, had virtually evaporated by the 1990s.[1]
The referenda, especially the initial Danish 'no' and the very narrow French 'yes', blew apart such complacency. In their aftermath, no proposals for further European integration can ignore the democratic imperative they raised. As Andrew Gamble has put it, "A technocratic and élite-driven process can no longer provide an adequate basis for European governance."[2]

Moreover, there is a deep uneasiness, in the wake of the fall of the Wall, the 1990s recession and mounting social stresses, as to where Europe is going. Donald Sassoon is withering:

A community whose great boast is to have brought prosperity to Europe faces up to twenty million unemployed and has little idea ... what to do to put them back to work A community exulting in its contribution to the maintenance of peace on the continent found itself paralysed when faced with the war in Bosnia. Uncertainty and doubt prevail.[3]
"Europe," writes Paul Gillespie, "lacks vision and spiritual vitality. It has no sense of direction and purpose."[4] And Brigid Laffan, citing Vaclav Havel's ironic observation of the EU as "an absolutely perfect and immensely ingenious modern machine", warns that it must address the issue of values: "The central question remains just what objectives and values are feasible, desirable and sustainable in the new Europe ... The union must move from contracts among governments to the consent of the people."[5]

The academic assessment is backed by leading parliamentarians. In the European Parliament's second annual 'state of the union' debate last September, Pauline Green, leader of the dominant socialist bloc, spoke of a "general mood of disillusion and depression. The union is dismally uninspiring. Indeed, to the overwhelming number of people it is completely irrelevant."[6]

So what is to be this vision; what is to comprise these values? Des Geraghty, a former MEP and a leading official of the republic's largest union, SIPTU, told the 1996 conference of the Irish National Organisation of the Unemployed:

One vision is of a massive supermarket. This view is promoted assiduously by the UK government and the free market and neo-liberal advocates who see progress being achieved only by a rapidly expanding market-place ... with competition as the driving force, a reduced level of social protection for workers and consumers, and minimal institutional reform. The other vision is of a 'social Europe' driven by the need for economic and social cohesion, balanced integration and institutional effectiveness with economic, social and environmental protection and increased involvement by the citizens in a more democratic society.[7]
Rejecting the first vision, Sassoon rightly argues that, for the future, politics-not market integration-has to be the guiding force. "One must start on the basis of the common values which underline the Union: these include liberal democratic values, social cohesion, economic growth, environmental protection, anti-discrimination and the struggle against joblessness. These are all, ultimately, political values."[8]

These values, Sassoon contends, should be incorporated into a European Charter - the union has no public statement of the sort of club it is, its principles, its rules, and the rights of its citizens. This would set out:

  • the purpose of the union and its values;
  • how it defends the cultural and political rights of its member states and their diverse ethnic communities;
  • the rights of citizens, including incorporation of those in the European Convention on Human Rights;
  • the principle of subsidiarity; and
  • the decision-making structure of the union.

The charter would establish the core of the otherwise indigestible acquis communautaire (accumulated EU legislation) which new entrants must accept, thereby speeding enlargement. It would be non-negotiable (except unanimously) and so constrain the expansion of 'variable geometry'. It would give Europeans a real stake in the union, thereby rendered accessible and intelligible; its provisions would automatically become part of domestic legislation in member states.[9]

Nothing so radical, unfortunately, is likely to eventuate any time soon. Far from starting from the concerns of Europe's citizens, the process of 'successive approximation' through which the treaties are revised in intergovernmental conferences starts from what is acceptable to the larger states. Far from establishing a compelling vision, based on widely supported values, the emphasis is on particular and complex trade-offs and fudges. And far from opening a debate to 'citizens of the union about Europe's future, the real business goes on in endless meetings behind closed doors.

Thus, as Deirdre Curtin notes, the IGC process is taking the form of a

focus on specific problems, in particular in the institutional context, at the expense of an overall vision as to the requisite direction and nature of the further progress towards European Union in the light of the worldwide changes which have taken place in recent years. This approach may ultimately prove problematic. The Europe of Maastricht suffered from a crisis of ideals and hence had no mobilising force. The signs for 1996[-7] are not reassuring in this regard; the more 'realistic' or pragmatic the goals, the less they will be capable of capturing the higher ground and truly mobilising public opinion.[10]
The republic's draft treaty[11] does certainly address several problems, though it leaves big questions for later. But take the key issue of 'the struggle against joblessness'. The new employment chapter would enshrine in the treaty the goal of a 'high level of' employment and, inter alia, establish an employment committee of the Council of Ministers. The idea is that this new goal and this new committee would ensure that an emphasis on job creation would match that on financial criteria enshrined in EMU and entrenched in the ECOFIN committee of finance ministers.

But first note the indefinable 'high' - some delegations, the treaty commentary reports, preferred the more tangible 'full'. Secondly, the only practical reference is to 'incentive measures', again undefined. On the very first day of the republic's presidency, the commission president, Mr Santer, said he thought it a reasonable goal to secure a halving (to 9 million) of unemployment in the union by the year 2000.[12] Yet for that, far more radical substantive provisions would be required.

'Euro-Keynesian' measures entailing a dramatic, continental-wide reflation would be necessary, allied to equally dramatic reductions in working time. Nothing like that is on the political agenda. A cynic (and there are many among the more than 50 million Europeans enduring poverty and social exclusion) would say that when governments won't do anything in practice, but want to be seen to be doing something in principle, they set up a committee. There is indeed a very real danger that unemployment in the union will keep rising into the new millennium - apart from 1985-90, it's been doing so since 1973. Only little Luxembourg has achieved a 'high level' of employment for a sustained period.[13]

Social provision is another key area, yet the Irish draft is notable for confining itself to a two-page commentary on the matter. It indicates a preference (against British opposition, of course) for the incorporation of the modest social chapter of Maastricht into the treaty. And in a sentence notable for its many conditional terms, the commentary continues:

The Presidency considers that in examining in due course the incorporation of the Social Agreement into the Treaty, the Conference should consider whether certain improvements of substance should be made in order to strengthen the effectiveness of the Community's social policy including for example the proposal which has been made to strengthen the Treaty provisions on social exclusion.
Or take the whole area of citizenship. The draft treaty offers a ringing statement of citizens' rights: "The Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms ..." Yet it merely says it will "respect" the European Convention of Human Rights, rather than the union acceding to the convention corporately. Welcome assertions on gender equality are similarly largely declaratory.

Particular concern in human rights terms attaches to the so-called 'third pillar', co-operation injustice and home affairs. The treaty commentary suggests, though no more, that issues related to freedom of movement and asylum/immigration within the pillar should be brought within the European Community framework (with the associated mechanisms of accountability via the commission, parliament and court). None of that, however, addresses the substantive problem of the increasingly hostile, 'Fortress Europe', tone of asylum policy across the union.[14] Indeed, the draft treaty underscores the principal that EU citizenship is premised on member-state citizenship.

Moreover, it is striking that the Irish draft makes no proposal to 'communitarise' those third-pillar provisions relating to police and intelligence co-operation. Yet there are very serious concerns indeed here about the accountability of Europol and the regulation of computer databases and exchange of information on persons. The taoiseach, John Bruton, was right to describe a major public concern across Europe as 'safe streets', yet not only terrorists and drug traffickers but also unaccountable police and intelligence services can jeopardise the rights of citizens.

Turning to the 'second pillar' of common foreign and security policy, the draft proposes a new early-warning unit in the Council of Ministers and provision to relax unanimity requirements on decisions in this, again intergovernmental, arena. Unanimity would still, however, be required in any decisions with military implications. If one were to ask the question whether these would have led to a coherent and effective response to, say, the crisis in ex-Yugoslavia - which so undermined the union's credibility in this area - the answer would still have to be no.

Finally, on institutional reform, the draft treaty recommends an increase in the powers of the parliament - to approve the nomination of the president and in the areas where it is involved in 'co-decision' with the Council of Ministers. But subsidiarity remains defined in member-state terms and the role of the Committee of the Regions (as against its administrative autonomy) remains unchanged. Crucially, a number of issues were left unresolved in the Irish draft: the balance of power between smaller and larger member states (as reflected in commission representation and the weighting of votes in the council), the extension of majority voting in the council into new areas and, above all, the vexed question of 'flexibility'. The commentary on the draft describes the latter as "of the greatest significance for the future development of the Union".

The Irish draft in general will other wise no doubt closely resemble what finally emerges in Amsterdam in June, or later in the year if agreement is further postponed. The issues left unresolved were implicitly rendered conditional on the behaviour of an incoming Labour administration at Westminster.

The battle over 'differentiated integration' goes to the heart of the difficulty in concluding the IGC. The willingness of the prime minister, Mr Major, to embrace a more 'flexible' Europe to allow proliferation of UK 'opt-outs' is proving a riskier strategy than he seems to have realised. 'Flexibility' cuts both ways - and every insistence on a UK right to detachment will be met with even mightier insistence on the part of all or most of the other 14 that they should be entitled to embrace strengthened co-operation:

The problem with Britain under the Conservatives is that the country has no clear and consistent policy towards Europe except maintaining the status quo. Yet, of all the possible scenarios available - and these range from utter disintegration to rapid integration and expansion - the preservation of the present state of affairs seems to be the least likely Creating obstacles to further integration by using one's veto and negotiating further opt-outs will have an impact, but it will not prevent the expansion of variable geometry.[15]
The 'flexibility' idea was indeed originally Mr Major's. In a speech at the University of Leiden in late 1994, he said a flexible, multi-track Europe would be necessary if the union were to be enlarged to the east and accommodate the diversity of its members. But it is France and Germany who are now pressing the flexible-Europe idea - not so that Britain doesn't have to change, but so that they can secure change against British wishes.

A Franco-German paper of December 1995 said: "The temporary difficulties of one of our partners to keep up with the forward movement ought not to be an obstacle to the Union's capacity for action and progress. For this reason we judge it desirable and possible to introduce into the treaty a clause of a general nature which would permit states which have the will and the capacity to develop between themselves closer co-operation in the single institutional framework of the Union."[16]

By last June it was being reported that "Twelve of Britain's 14 European Union partners are ready to join a hard core grouping committed to closer integration in key areas of foreign policy, defence and internal security - if necessary without the UK."[17] And in October, France and Germany submitted a joint document to the IGC presenting their idea of a 'flexibility clause' to be included in the redrafted treaty. This would permit, through the Council of Ministers, 'enhanced co-operation' between those members states who wanted further integration in a particular area, with no veto right for a dissenting state - the 'ins' and 'outs' of EMU would be the model.[18]

Indeed, in January 1997, the Independent revealed confidential Franco-German proposals, taken up by the commission, to include harmonisation of taxation and social security policies within the area of 'flexibility', once the single currency was up and running.[19] The Labour leader, Tony Blair, has however declared that in government he would be prepared to exercise a British veto on defence, taxation, immigration and border controls: "If it is in Britain's interest to be isolated through the use of the national veto, then we will be isolated."[20]

This position may 'neutralise' the European issue in the British election campaign, but there is only one problem: it is not sustainable as practical politics in power. As Ian Davidson argues, while in theory the unanimity requirement for treaty amendments underpins Mr Blair's stance, "if the large majority of the member states remains committed to closer political integration in Europe, it is simply not plausible to suppose that they will for very long allow Britain to dictate their future". An informal hard core will emerge if a formal distinction is blocked.[21]

It should also be recognised that the EU will be likely to offer a cold climate in coming years for radical social change. The prolonged recession of the early 90s and enduring mass unemployment - more than 4 and a half million now, in Germany alone - have strengthened in particular the populist, nationalist right.[22] And the convergence criteria for participation in EMU reflect historical German terror of Weimar inflation and determination that the beloved Mark shall not be exchanged for a weak euro, rather than the condition of the diverse 'real' economies of member states - never mind the weak regions.

As Wolfgang Streeck anticipated, this has meant "austerity measures",[23] as evidenced by the sharp welfare contractions pursued in France (1995) and Germany (1996) and the painful 'Euro-tax' introduced in Italy (1996) - in each case evincing massive popular protests. Not only do the convergence criteria exclude non-financial considerations, such as maximum tolerable unemployment or minimum acceptable social protection, but also EMU will render impossible resort to reflation or devaluation to enhance demand and employment.

The 'stability pact' agreed at the Dublin summit in December, while less tough than Germany wished, will nevertheless ensure that struggling EMU participants do not break fiscal ranks. Warning that unemployment had trebled in the past 20 years or so, a British corporate economist said the stability pact risked building a "constant deflationary bias" into fiscal policy across Europe.

Christopher Johnson points to the difficulties posed by the contrast between the centralisation of monetary policy under EMU and the continued decentralisation - in theory - of fiscal policy to member states.[24] Given its minimal budget as a proportion of EU gross domestic product, the union has very little scope to offset co-ordinated monetary restraint by co-ordinated fiscal reflation. (As a genuinely federal system, by contrast, the United States has a federal budget of 11-13 per cent of GDP, depending on how counted.)

As the economics editor of the Observer puts it, "For some time it has been obvious that economic policy in Europe accords too much respect to central banks and price stability and not enough to the democratic process and employment."[25] In line with that perspective, the Florence summit last June refused to back the plea by the European Commission president, Mr Santer, for an extra £800 million to invest in the trans-European network infrastructure projects. Afterwards, he said: "To tolerate the continuing unemployment of so many millions of our people is unacceptable."[26] His predecessor, Jacques Delors, subsequently accused Germany of reducing EMU to deficit reduction and thereby stifling growth and job creation.[27]

Disadvantaged regions like Northern Ireland face particular challenges in this context. As Keating points out, the single-European-market project was underlain by neo-liberal economic assumptions, of perfect competition and perfect mobility of 'factors of production', such as labour. Yet what if these two conditions do not apply? What if, for example, as is likely, capital is far more mobile towards high-productivity regions than (given human realities) is labour? Or what if particular regions face what economists call 'asymmetric shocks' - those which do not affect the system as a whole - such as the renewal of high-intensity conflict in Northern Ireland?

Northern Ireland has of course always been part of a monetary union itself - the UK - and its experiences in the late 50s/ early 60s and early 80s are salutary ones. Deflationary Treasury measures premised on the economic state of the home counties gave the region a very nasty shock indeed in both cases, bringing soaring unemployment in their wake. In the first case, these led ultimately to the ejection of the then Stormont premier, Viscount Brookeborough from power in 1962; in the second, they were associated with the hardening out of militant republican (and loyalist) sub-culture after a period in the late 70s of declining political tensions.

Membership of EMU will similarly mean that the behaviour of major economic instruments (exchange rates and interest rates) will be essentially determined centrally by the European Monetary Institute - the Bundesbank writ large - while fiscal laxity by member states will be prevented by the stability pact. These decisions will reflect the priorities of core regions which enjoy what economists call 'agglomeration economies' (the coming together in one place of key economic factors like skills, research establishments, investment banks and so on), as against the more adverse economic circumstances facing peripheral areas.

Thus, as Hooghe and Keating put it, "economic and monetary union ... implies common monetary and fiscal policies, which may involve imposing restrictive anti-inflationary measures, designed for booming areas, in places which have substantial under-utilised resources".[28] Like people. And, as we have already seen, Northern Ireland can not in future expect an infinite supply of Euro-funds to compensate for this stringency.

It is now time, finally, to turn to Northern Ireland's place in this scheme of things.


1Eddie Moxon-Browne: 'Citizens and parliaments', in Brigid Laffan ed, Constitution-building in the European Union, Institute of European Affairs, Dublin 1996, p71
2Andrew Gamble, 'Economic recession and disenchantment with Europe', in Jack Hayward ed, The Crisis of Representation in Europe, Frank Cass, London, 1995, p171
3Donald Sassoon, Sociol Democracy at the Heart of Europe, Institute for Public Policy Research, London, 1996, p5
4Paul Gillespie, 'Diversity in the union', in Laffan ed, p41
5Brigid Laffan, 'Governance in the European Union: towards a new architecture of statehood?', paper presented to the COST A7 workshop, organised by the National Economic and Social Council, on Negotiated Economic and Social Governance and European Integration, Dublin, May 1996
6Neill Buckley, European MPs attack lack of EU vision at top', Financial Times, September 19th 1996
7'EU focus on unemployment stressed', Irish Times, April 24th 1996
8 Sassoon, op cit, pp 11 & 27
9ibid, pp 28-31
10Deirdre Curtin, 'IGC priorities for 1996', in Laffan ed, p172
11The European Union Today and Tomorrow, European Commission (CONF 2500/96), Brussels, December 1996
12 Interviewed on RTE Radio, July 1st 1996
13Eurostat Yearbook '95, Office for Official Publications of the European Communities, Luxembourg, 1995, p285
14 Leonard Doyle, 'EU slams the door on fleeing victims', Guardian, March 23rd 1996
15 Sassoon, op cit, pp 21-2
16 Ian Davidson, 'Orthodoxy reversed', Financial Times, March 6th 1996
17 John Palmer, 'Vetoes hasten two-tier EU', Guardian, June 11th 1996
18 Imre Karacs, 'UK set for Europe's slow lane', Independent, October 19th 1996
19 Sarah Helm, 'EU fleshes out how 'flexibility" would work', Independent, January 16th 1997, and 'EU confirms common tax plan', Independent, January 17th
20 Colin Brown, 'I'll use the Euro veto, says Blair', Independent, December 16th 1996
21 Davidson, 'Will Blair lead us out of Europe?', New Statesman, December 20th 1996
22 Carolyn Rhodes and Sonia Mazey eds, The State of the European Union Vol 3: Building a European Polity?, Longman, Harlow, 1995, p3
23 Wolfgang Streeck, 'Neo-voluntarism: a new European social policy régime', in G Marks, F W Scharpf, P Schmitter and Streeck, Governance in the European Union, Sage, London, 1996, p56
24 Christopher Johnson, 'Fiscal and monetary policy in economic and monetary union', in A Duff, J Pinder and R Pryce eds, Maastricht and Beyond: Building the European Union, Routledge, London, 1994, pp 71-83
25 William Keegan, 'Major's war machine hits wrong target', Observer, May 26th 1996
26 Palmer and Michael White, 'Days numbered for EU'S new truce', Guardian, June 24th 1996
27 'Bonn, Paris out of tune on Emu pact', Financial limes, November 28th 1996
28 Lisbet Hooghe and Michael Keating, 'The politics of European Union regional policy', Journal of European Public Policy, vol 1, no 3, 1994, p369

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