Fragmentation and retreat of democracy

The European Union currently finds itself in a state of profound and uncommon instability. To be sure, the EU has also faced difficulties in the past. After the global economic shocks of the 1970s, for instance, in its previous incarnation as the European Economic Community, it lost direction and went through a period of drift. But the instability of the 2010s is of a different order because it is rooted in economic malfunctioning and has become political. The ideological authority of the EU has shrivelled, its democratic credentials have been devalued, its moral standing has taken a series of blows, and its unity has cracked. In 2016, following a bitterly contested referendum, Britain decided to leave. Moreover, rising right-wing and authoritarian parties in several other countries have begun to pose a direct challenge to the very existence of the EU.

The previous three decades had been very different. In the early 1980s the EEC shook off the torpor of the 1970s and expanded by admitting Greece, Spain, and Portugal. More than the formal accretion of new members, however, it engaged in organizational, institutional, and ideological expansion signalled by the strong presence of the European Commission, led by Jacques Delors. A series of crucial steps were taken, including the Single European Act, signed in 1986, and the Maastricht Treaty of 1992.¹ Further economic and political integration appeared to be the order of the day, and the old appellation of the EEC was superseded.

The Maastricht Treaty came hard on the heels of the collapse of the Eastern Bloc and the reunification of Germany. It was very much a product of its time marked by the discrediting of state-controlled socialism, the retreat of organized labour in the previous decade in the face of Margaret Thatcher and Ronald Reagan, and the ascendancy of neoliberal economics in both theory and policy. That was the moment of Francis Fukuyama’s The End of History and the Last Man, a book that gained tremendous visibility by claiming that liberal democracy and free-market capitalism went hand-in-hand, and together had actually won the grand historical contest among political and social systems.² The Maastricht Treaty encapsulated the spirit of the time for Europe, and was a moment of historic importance in the evolution of the European project.³

The EU engaged in further sustained expansion in the 1990s and the 2000s, above all by incorporating a host of new countries in Eastern Europe and developing its international presence. The union lacked an army and had no real foreign policy, but it was an economic giant that had largely eliminated internal barriers to trade and the movement of capital. It was, moreover, in command of a form of money that competed against the dollar as an international reserve. Institutionally it possessed a vast array of laws backing the transnational presence of the European Court of Justice. It also had a complex administrative machinery, with a powerful Commission and a European Parliament, employing a large bureaucracy, mostly in Brussels. The image that the EU increasingly sought to project during those decades was of ‘soft power’ – a beacon of democracy, individual rights, and social protection. A novel political entity appeared to have been created in Europe, a monument to solidarity and peace after the bloodbaths of the twentieth century, which seemed to combine political liberalism and economic neoliberalism.⁴

The global crisis of 2007–9 and, even more, the Eurozone crisis of 2010–12 have left that image in tatters. The response of the EU to the crisis pointed to cold calculation rather than solidarity as its operating principle. Sharply hierarchical power structures and hegemonic behaviour made themselves acutely felt within the union. The paramount objective was to rescue the common currency, the euro, for its collapse would have delivered a mortal blow to the structures built after the Maastricht Treaty. The costs of this rescue were imposed overwhelmingly on the weakest member states.

The measures taken and the policies implemented throughout this period were determined by professional politicians and technocratic experts inhabiting the core institutions of the union. A pronounced ‘depoliticization’ of economic and social policies took place, a process that had actually begun much earlier, as is evident, for example, in the old debate on the ‘crisis of representation’, but emerged with ruthless clarity during the global economic crisis.⁵ The forms of democracy were generally observed, with active parliaments and a free press, but only the wilfully blind would claim that the content of democracy was also honoured. And even the forms of democracy were frequently side-lined as the letter and the spirit of the law were by-passed by emergency measures.

National electorates were allowed to vote for any party they wanted as long as the same array of economic and social policies were adopted in the end. Parliamentary debate visibly shrunk across Europe, and privately owned newspapers and television channels practised astonishing self-censorship. Big business and big banks, hiring an army of lobbyists, set the political agenda in member states and in Brussels. Formal politics became increasingly remote for great swathes of people, especially wage workers and the poor, the self-employed and the owners of small businesses. Liberal democracy was gradually hollowed out in Europe, and the blame for that lay squarely with liberal democracy itself.⁶

The hollowing out of democracy was perceived by the plebeian classes of Europe as a loss of sovereignty. Conceited specialists often imagine that the poor neither appreciate nor understand sovereignty. It is indeed true that the finer nuances of international law, or the rights of states over land, sea, and air, or the more obscure clauses of international treaties are the preserve of experts. But popular sovereignty is immediately and directly understood by the plebeian strata because it means having a say on the conditions of life in the neighbourhood, the local community, the town, and the city. And insofar as popular sovereignty stretches in practice over the mechanisms determining national economic and social policies, it blends perceptibly into national sovereignty. The lower classes are not fooled when external forces shape national tax, tariff, subsidy, credit, and money policies.

The plebeian classes of Europe were right to perceive the hollowing out of democracy as a loss of sovereignty, for democracy is an integral part of popular sovereignty and extends far beyond the mere ability to vote periodically. It naturally translates into the ability of the poor, the workers, the self-employed, and others to have influence over their conditions of life. That, however, requires appropriate political structures, and liberal democracy has always been deficient in facilitating plebeian participation in social life. As its mechanisms and institutions were hollowed out in Europe during the last few decades, an unprecedented sense of powerlessness came to prevail among the poor.

The sense of powerlessness was inseparable from the further economic marginalization of the lower social classes during the same period. In old-fashioned and perfectly apposite Marxist terms, the decline of democracy and the loss of popular sovereignty in Europe reflect a historic shift in favour of capital and against labour. For labour this shift has amounted to a tremendous escalation of insecurity with regard to employment, income, medical care, pensions, and so forth. For capital it has meant the rapacious appropriation of national wealth, propelling inequality to levels unprecedented in the post-war years. The policies of the EU to confront the Eurozone crisis have further favoured capital while worsening the conditions of labour.

Against this background of economic and political malfunctioning, the trigger for political turbulence was the refugee and migrant crisis of the 2010s. Relatively free movement of workers within the EU after the Treaty of Maastricht significantly increased immigrant populations in several countries. Britain in particular acquired a sizeable layer of Eastern European workers. During the same period immigration across the Mediterranean, mostly by young men from Africa, exerted a steady pressure. The scales were tipped in 2015 by waves of desperate families displaced by civil war in Syria and seeking refuge in Europe in 2015. The actual numbers involved were not enormous, and compared to the aggregate population and the gross domestic product (GDP) of the EU they would never have justified the term ‘crisis’. But a crisis it became as EU mechanisms proved incapable of handling the flows, and aimed to prevent refugees and migrants from reaching core countries, where most wanted to go. The result was that safe passage was denied to helpless people, forcing them to seek ever more perilous ways of reaching Western Europe and often paying with their lives. The Mediterranean became a graveyard for thousands.

The refugee and migrant crisis catalysed political developments in Europe. Ultra-conservative forces found amenable terrain on which to manufacture imaginary threats about hordes of foreigners invading the continent. Identity and cultural issues were thrown into the pot as Islam was portrayed as the historic enemy of Christian Europe. The Far Right began to speak the language of sovereignty and security for the people of Europe. It opposed the EU and rejected liberal democracy in favour of authoritarianism, even when it formally complied with electoral practices. Political barbarism raised its head within the EU to take advantage of the forces of fragmentation.

The challenge for the Left

For the Left these tribulations posed a host of political, ideological, and moral issues of the first order. The relationship with the EEC and subsequently the EU has been a hotly contested issue within the Left for several decades, but the change in the dominant attitude during recent decades has been nothing short of astonishing.⁷ The most dramatic change has taken place in the United Kingdom. Suffice it only to mention that when Britain joined the EEC in 1973 – and held a referendum in 1975 on the terms of joining which saw a majority in favour – the strongest opposition was to be found in the Labour Party and the trades unions. The EEC was perceived by the Left as a capitalist club that would harm workers’ interests and damage British sovereignty.

The sea change in the attitude of the European Left has its roots in the failure of the Mitterrand government in France in 1981.⁸ Elected on a radical ticket of economic and social transformation, François Mitterrand was unable to sustain expansionary Keynesian policies in the face of opposition by banks and other established interests, which generated downward pressures on the French franc. His Finance Minister, Jacques Delors, was quick to draw the conclusion that the future of social democratic policies lay with the EEC, rather than with the nation states of Europe.

Delors, who became President of the European Commission in 1985, played a crucial role in the creation and expansion of the EU in the 1990s, and promoted the Social Chapter of workers’ rights and social protection, which is often deployed as evidence that the EU is fundamentally a progressive force. The collapse of the Eastern Bloc and the consequent discrediting of socialism and communism in the early 1990s settled the issue for much of the Left in Europe, and especially for social democrats. The belief arose that social progress was only possible within the framework of the EU. By the 2000s even a figure like Toni Negri, whose political origins were anything but social democratic, fervently argued that the EU would overcome the constraints of the nation state and provide a counterweight to ruthless US capitalism.⁹

It is, thus, no surprise that EU turmoil in the 2010s has reawakened sharp divisions within the Left, most prominently with regard to the European Economic and Monetary Union (EMU) and its common currency, the euro.¹⁰ These divisions have been spurred by the relentless ascendancy of neoliberalism in the EU since its creation after Maastricht. Neoliberalism is an ideology that is hard to define accurately, but is unmistakable in its presence.¹¹ It is marked by a strong belief in the merits of free markets and private enterprise, coupled with an equally strong antipathy toward the public sector, collective agents, and organized labour. The common currency, which steadily became the preeminent institutional structure of the EU, has abetted the rise of neoliberalism and entirely deflated the social democratic spirit of Delors’ Social Chapter.

Divisions within the Left were also spurred because the development of the EU, far from promoting convergence, actually generated new forces of divergence in Europe. A core has emerged in the EU comprising France, the Netherlands, Austria, Italy (which also has a foot outside the core), and other countries, among which Germany enjoys a hegemonic ascendancy. The core is matched by several peripheral groupings, for instance the Baltic countries, or various combinations of Balkan countries. However, two groupings – quite distinct from each other – stand out and point to the future direction of Europe. The first is the Southern periphery, entirely within the EMU, and comprising Spain, Portugal, and Greece. The second is the Central European periphery, comprising Poland, the Czech Republic, Hungary, Slovakia, and Slovenia, with the last two belonging to the EMU.

The ascendancy of Germany has further led to new political forms and institutional arrangements in the EU. The defining moment arrived when Germany assumed leadership vis-à-vis its European partners in determining the EU response to the crisis of the 2010s. It accomplished this feat by taking advantage of its position as prime European creditor, built up over years of industrial supremacy and exporting surpluses. It obliged debtor countries to accept suffocating policies of austerity and market liberalization as the condition for bailing them out. It also imposed changes across the EU that have institutionalized austerity and neoliberalism. Lest it be misunderstood, however, German hegemony remains conditional on a host of factors that require constant institutional rebalancing and compromise within the EU.

The neoliberal and hegemonic transformation of the EU has been a matter of considerable analytical concern in the academic world.¹² It has also been a source of great political anxiety within the declining ranks of the social democrats. More broadly within the Left the dominant current is unwilling to acknowledge that the outbreak of the Eurozone crisis, as well as the ensuing regime of austerity and liberalization, have been induced by the very structure of the EU, and especially by the EMU. Instead, these developments are viewed more generically as expressing the prevalence of neoliberalism across mature capitalist countries leading to maldistribution of income and weak demand followed by predictable government attempts to tackle the problems in the interests of capital and at the expense of labour. The conclusion thus drawn is that the Left should wage a counter-attack on neoliberalism by fighting for concrete policies to strengthen labour against capital as well as fostering transnational unity. Often this view is coupled with a demand for ‘More Europe’, that is, for stronger integration, or for a push in the direction of federalism, on the assumption that the lurch of the EU in a neoliberal direction was facilitated by the incompleteness of the union.¹³

From this perspective, the EMU and the EU are considered, at bottom, as arenas in which to fight political struggles. Neoliberal and anti-working-class policies, far from being inherent in the institutional functioning of the EMU and the EU, are seen as merely reflecting the transient balance of class forces in key countries, such as Germany and France. Calls to exit or dissolve the EMU, in this view, would not only be pointless, but could also open a path for siding with right-wing nationalist and authoritarian forces. The political conclusion drawn is that the Left ought to separate the mechanisms of the EMU and the EU from their neoliberal political baggage, thus allowing the same mechanisms to promote national and working-class solidarity across Europe. For much of the European Left it is an article of faith that the EMU and the EU should be defended in the name of internationalism, while being criticized for their neoliberal policies.

Nothing could be more misleading than this perspective. The EU and the EMU are not a neutral set of governing bodies, institutions, and practices that could potentially serve any socio-political forces, parties, or governments, with any political agenda, depending on their relative strength. Rather, they are structured in the interests of capital and against labour. They have also gradually become geared to serving the economic advantages, and thereby the international agenda, of a particular dominant class, above all, German industrial export capitalists.

Given this overriding reality, to hope that the outlook of the EMU and the EU could be altered through the simultaneous election of left-wing governments in core countries, drawing upon common anti-neoliberal policies and supported by grass-roots workers’ movements, is to add fantasy to misunderstanding. The political emptiness of this view was made clear in 2015 by the failure of the left-wing SYRIZA government in Greece.

The EU and the EMU are beyond left-wing reform, and probably beyond major structural reform altogether. Confronted with the tendency of the EU toward fragmentation and the rise of right-wing authoritarianism, the Left needs to propose fresh policies capable of tilting the balance of power toward labour, strengthening democracy, recouping sovereignty, and providing a feasible socialist perspective for the continent. For that to become a political reality, however, the Left must recapture its historic radicalism and reject the mechanisms of the EMU and the EU, including to the point of exit. On that basis it could in practice defend the rights of citizens and migrants, while assuaging frictions and tensions among European nations. The rest of this book considers and develops these arguments.