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Nosemonkey's EUtopia

In search of a European identity

June 7, 2012
by Nosemonkey
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My return to blogging: A mission statement

There’s infinitely more being written about the EU these days than when I started this blog 9+ years ago. Some of it is excellent, some of it interesting, some of it utterly fatuous.

My aim with this blog has always been as much to discuss the discussion of the EU as to discuss the EU itself. As such, this passage from a recent piece on Roland Barthes in the New York Times struck a distinct chord:

“what angered Barthes more than anything was ‘common sense,’ which he identified as the philosophy of the bourgeoisie, a mode of thought that systematically pretends that complex things are simple, that puzzling things are obvious, that local things are universal – in short, that cultural fantasies shaped by all the dirty contingencies of power and money and history are in fact just the natural order of the universe. The critic’s job, in Barthes’s view, was not to revel in these common-sensical myths but to expose them as fraudulent. The critic had to side with history, not with culture.”

Strikes me as as good a mission statement as any. Barthes aimed to identify and demythologise cultural assumptions. My aim is to do the same for the EU. To be as critical – in the true sense of the word – of the EU’s analysts as of the EU itself (where merited, of course), as well as to highlight interesting EU-related content from all sources and all parts of the political spectrum.

This will likely mean re-examining my own prejudices just as much as it means dissecting those of others. Should be fun…

June 6, 2012
by Nosemonkey
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The euro: A domesday machine

As a counter to the last post, an interesting from investment banker Marshall Auerback at EconoMonitor, worth a read for a bit of history on the (evidently flawed) economic assumptions underpinning the formation of the euro and some links to some further reading:

“the eurozone’s architects failed to follow through with the logic of a political union. Nobody cares about ‘trade imbalances’ in the Canadian confederation. And nobody would care if Alberta, for example, were to run perpetual trade surpluses with the other 9 provinces. Fiscal transfers from the strong to the weak are part of the Canadian bargain in a full national union. Had Europe adopted a similar federal structure, the Greek and Spanish issues would be moot.

“As it stands, however, the architects of the euro have created a doomsday machine and a gift for speculative capital… throughout the evolution of the architecture of the European monetary union, it was assumed that deposit movements from one country to another would all be smoothly handled by the market mechanism.”

Markets, eh? If there’s one thing we’ve learned in recent years, you can’t trust markets. Or bankers. Or economists. Or politicians. Or voters. Anyone, basically.

June 6, 2012
by Nosemonkey
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An unpopular view: The UK missed out by not joining the euro

Hell, this would have been an unpopular view at most stages in the last decade and a half, even when it looked like the eurozone was doing well. So it’s a brave British politician indeed to make the argument that Britain should have joined the euro – this week of all weeks… Hats off to London Labour MEP Mary Honeyball for having the guts to say it (emphasis mine – and emphasised because those are the bits I agree with):

“Although it’s by no means all set to go, it does look as if the 17 Eurozone countries are coming closer together and accepting the need for a central Eurozone authority look at budgets and fiscal policies.

“Britain as ever is not part of what promises to be the most important European project since the formation of the Common Market. Unfortunately 50 years or so later, we still don’t get it. Europe is where the future lies. If Britain has any hope of being more than a bit player outside our own shores, we have to be a leader in the European Union. Today that means being up there with France and Germany in the Euro. Very unfortunately we did not join, and this blog post explains just how serious a missed opportunity this will turn out to be.

“To add salt to the wounds, if Britain had joined the Euro, there is little doubt we would have been at the top table with France and Germany. Yes, we would have suffered from the current crisis in the Eurozone countries, but thanks to dogmatic Tory Chancellor George Osborne and Prime Minister Cameron we are suffering a double dip recession anyway, even outside the single currency. The Euro was always a political as well as an economic project and the UK has comprehensively failed to grasp the political opportunity.“

As it stands, Britain is again on the sidelines, watching nervously as a whole bunch of its major trading partners hover on the brink with no power to influence them.

I’m certainly not as confident as Ms Honeyball that history will show Britain’s decision to stay outside to have been a mistake (I’ve never been fully convinced of the arguments in favour of joining – though I tend to like the basic *concept* of an EU single currency, I was never convinced that the euro was being set up sensibly). But the counterfactuals thrown up by the idea of Britain having joined the euro from day one are frascinating. Would the sloppy rules and lack of sensible structures have been allowed through if the more cautious Britain had been part of the discussions? Would the presence of another major economy in the eurozone mix have lent greater strength to the whole? Would the presence of the UK have helped prevent German dominance? Would the UK’s apparent preference for quantitative easing to tackle downturns have pushed the ECB into printing money? Or would it just have meant that Britain was even more economically screwed than she has ended up on the outside?

June 5, 2012
by Nosemonkey
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Former Israeli Foreign Minister Shlomo Ben-Ami makes a good case that the slow advance of the European democratic will is starting to have an impact (hurrah, etc.): “Europe’s experience has shown that the subordination of society to economic theories is politically untenable… Merkel’s now legendary obstinacy eventually might have to succumb to the imperatives of politics. It is one thing to ignore European Commission President José Manuel Barroso’s call for a more flexible economic policy, and quite another to dismiss out of hand the powerful message coming from French and Greek voters.”

He also makes a sound warning of the dangers: ” Social vulnerability and frustration at the political system’s failure to provide solutions are the grounds upon which radical movements have always emerged to offer facile solutions.”

June 5, 2012
by Nosemonkey
3 Comments

New EU recovery plan, eh? It’s about bloody time, though some areas are likely to scare the usual suspects (emphasis mine)… “The proposals… are said to be focused on 4 main areas so far: structural reforms, a banking union, a fiscal union, and a political union. To gain a sufficient traction for these actions, they will be sold under a growth friendly umbrella rather than as austerity related measures”

June 5, 2012
by Nosemonkey
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Paul Krugman: “If there were any villains, they were the architects of the euro”

June 4, 2012
by Nosemonkey
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Worth a read: Soros on the euro and EU

Three months until the euro’s past saving, eh? I’ve heard that one before… Still, very much well worth reading George Soros’ recent eurocrisis speech in full – an interesting take with much to be said for it. After recent posts here, where I’ve called for an EU Reformation, one passage in particular leapt out (emphasis mine):

“While the European Union was being created, the leadership was in the forefront of further integration; but after the outbreak of the financial crisis the authorities became wedded to preserving the status quo. This has forced all those who consider the status quo unsustainable or intolerable into an anti-European posture. That is the political dynamic that makes the disintegration of the European Union just as self-reinforcing as its creation has been.”

He’s right, you know. I’ve been complaining about the stagnation of the EU ever since I first started blogging about the damned thing back in 2003. And as I said in my last post, “>we desperately need action. I can feel myself getting this -><- close to giving up altogether. And when you start to lose your friends, how the hell can you expect anyone else to stick with you?

June 3, 2012
by Nosemonkey
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On the source of the EU’s democratic deficit and the need for action

A telling paragraph in Der Spiegel which fits in neatly with my onging “blame the European Council” approach when it comes to pretty much everything that’s wrong with the way the EU works. (Emphasis mine):

“European Central Bank head Mario Draghi provided what was perhaps the most urgent appeal to euro-zone political leaders on Thursday in comments delivered to the European Parliament in Brussels. He said the structure of the euro as it stands now is ‘unsustainable unless further steps are taken’ and also criticized European heads of state and government for not being clear about their common currency strategy. Leaders, he said, ‘must clarify what is the vision … what is the euro going to look like a certain number of years from now?’ Draghi also said that the ECB was unable to save the euro on its own and could not ‘fill the vacuum of the lack of action by national governments.’“

And then on to Project Syndicate, where former IMF man Daniel Gros, now Director of the Centre for European Policy Studies, adds to the case in a piece perhaps tellingly entitled Democracy versus the eurozone:

“all of those grandiose plans to create a political union to support the euro with a common fiscal policy cannot work as long as EU member countries remain both democratic and sovereign. Governments may sign treaties and make solemn commitments to subordinate their fiscal policy to EU rules (or to be more precise, to the wishes of Germany and the European Central Bank). But, in the end, the ‘people’ remain the real sovereign, and they can choose to ignore their governments’ promises and reject any adjustment program from ‘Brussels.’

“…As long as member states remain fully sovereign, no one can fully reassure investors that in the event of a eurozone breakup, some states will not simply refuse to pay, or at least refuse to pay for the others. It is not surprising that bonds issued by the European Financial Stability Facility (the eurozone’s rescue fund) are trading at a substantial premium over German debt.”

And then to Business Insider for a bit of potential contradiction to the above, with a solid case that Independent Central Banking has been a failure and (my interpretation/paraphrase) we should stop pretending that Economics is a science where the “best” option can be determined by dispassionate, objective, technocrats (aside: this quantitative analysis of economists’ views of what the eurozone should do next is a perfect illustration of how little economic consensus there is – your take on the best move will be as much ideological as based on “facts”):

“the choice between inflation and unemployment is a political, not a technical choice. What’s ‘better’? To screw debtors or creditors? To make millions unemployed or to ‘debase the currency’? Those are very important questions. More important, they’re questions that cannot be solved by economics. They can be informed by them, but at the end of the day what you prefer is going to come down to your own moral value system. In other words, it’s a political choice. And the way we make political choices in modern countries is through the democratic process, not through unelected, unaccountable technocrats…

“It’s a political choice, which means that the authorities that make that choice for the whole society need to be appointed, and held accountable, by a political, democratic process.”

But, of course, the powers that be at the head of the EU and eurozone – the members of the European Council – are *not* elected. Not to that position, at least. The European Council is made up of the governments of the European Union’s member states – it is only to *national* positions that they have been elected, not to EU-wide responsibilities. And they are answerable to electorates only at a national, member-state level, not an EU-wide one. They have nothing to fear from anyone except their own, national electorates – and so no need to worry or care about what any European voter thinks about them outside their national boundaries.

This is why consensus and agreement is so hard to reach at European Council level. The focus on member state-level concerns leads to parochial posturing, with one eye firmly focused on the opinion polls back home, not the will of the people continent-wide.

Think of the various heads of state at the European Council as being representatives of their countries’ electorates, then they become little more than grandiose versions of Members of Parliament, sent to represent and act on behalf of their constituents’ best interest.

Yet the way the European Council works is as if Members of Parliament were elected all as independents, rather than members of parties with clear manifesto pledges, and then head to parliament to work in total isolation from each other. It’s representative democracy from the very early days, where loose, easily-broken factions rather than more solidly formalised parties ruled the day.

Now I hate party politics for many reasons, but party political systems do have one key advantage that would become immensely handy at a pan-European level. They tend to oversimplify complex issues into binary choices, and can impose a certain uniformity of opinion on diversely-minded elected representatives by helping to highlight their similarities of opinion over their differences. They can provide focus.

And focus is something we sorely need right now. Enough of the dithering – we need action. At this stage, it almost doesn’t matter what that action is, we’ve been prevaricating for so long that anything is better than nothing.

The reason we have governments at national level – be they one majority party in charge or a coalition – is that decisions need to be taken and implemented for the whole that parts may disagree with, or nothing ever happens. No majority, no coalition consensus? That leads to stagnation. Which may be fine for a while (witness Belgium, happily surviving without a government for a record 541 days without many people even really noticing) – but is a serious danger in times of crisis.

This is why most political systems end up with one person at the top to provide direction – to herd the party/coalition that forms the government towards some kind of decision. Because some decision is better than none at all.

Someone needs to take a decision on what to do sooner or later. The problem we have in the EU is that there is no one to take these vital decisions. Why? Because the governments of the member states don’t want anyone to boss them around.

Think of the European Council as a Cabinet – who is the figurehead? Who’s the Prime Minister or President? Van Rompuy? Don’t make me laugh… He was appointed precisely *because* he would have no power to push the heads of state into a decision, and has zero mandate from the people. Instead, it’s the person who shouts the loudest – which has, until recently, been Angela Merkel. This is no way to conduct business.

And this is where the people come in. If the people of the European Union were to elect a president to head the European Council, that president would be the only person in the room with a pan-European democratic legitimacy. They would be able to provide direction, to push the various national governments into a single agreed course in exactly the way prime ministers and presidents do on a national level. And the heads of state would be obliged to listen to them significantly more than they are obliged to listen to the unelected, anonymous Van Rompuy.

Which is precisely why the EU’s member state governments have so consistently rejected increasing pan-EU democratic involvement. If we had an EU president directly elected by the people of the EU, they would have greater legitimacy to speak at EU level than any of the current members of the European Council. The member state governments would lose their pretence of independence and power – even if that power is illusory and that independence only, as we can see from the current crisis, gives them the ability to *not* act, rather than to take decisions for themselves…

(Update: An alternate take on the same theme from UK MEP Mary Honeyball, arguing for greater emphasis on the European Parliament. This hasn’t been allowed for the self-same reason that an elected EU president hasn’t – increased democratic legitimacy for the European Parliament would seriously undermine the power of the member state governments to set the agenda at EU level.)

(Update 2: Conor responds to this post with a strong, considered argument against an EU presidency. Well worth a read. I tend to agree that a strong European Parliament would be a more effective solution for conferring longer-term democratic legitimacy on the EU. But I also think that the implication of a strong European Parliament would be the start of an *actual* European state – and as such, it’s highly unlikely to be allowed to happen. An elected EU president, meanwhile, could work precisely *because* such a concept would be weak both culturally and institutionally (as Conor convincingly argues) – conning the member states into going for it as they’d think it couldn’t hurt them, and then acting as a stepping stone to more effective EU-level decision-making and a strengthened role for the parliament down the line. President as stepping stone to EU democracy, as it were.)

June 2, 2012
by Nosemonkey
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The Economist’s Political Editor David Rennie – erstwhile Charlemagne, and before that the Telegraph’s Brussels correspondent – is the single most consistently interesting and insightful commentator on EU affairs in the British Media. And other media, for that matter.

So you can imagine my geeky joy at discovering he’s written a 20,000 word analysis of the Anglo-European relationship just in time for a long Bank Holiday weekend. He provides an introduction/summary here – if you follow this blog you really should go read. Eurogeek heaven.

May 31, 2012
by Nosemonkey
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A thoughtful Irish take on the EU Fiscal Treaty on referendum day

Conor Slowey is one of the most interesting EU bloggers out there, and I agree with his take on things more often than not. He’s also Irish, which means he’s had to form a solid yes/no take on the EU’s Fiscal Stability Treaty ahead of today’s Irish referendum on the damned thing.

Rather him than me. It’s a complex, confusing compromise that no one’s really happy with, and it’s near impossible to tell if it’s better than the alternative. Largely because no one knows what the alternative is.

After several months of hard thought, he finally worked out his position just a couple of days ago.

Yep – someone who’s been blogging about the EU regularly for three years, and who knows infinitely more than your average punter about how these things work, has taken several months to work out their position. Little wonder that early reports suggest that turnout could be under 10%. Yes, really – under ten per cent.

Which all makes Conor’s reasoning all the more interesting:

“I really don’t like this treaty. It’s clear that it will neither have prevented the crisis… nor will it do anything to solve it. As I’ve pointed out before, the Treaty is 90% existing EU law, since the European Parliament has passed the “six-pack” of legislation last year. It’s already mostly in force – it has caused political complaints in Belgium, and was part of the reason for the collapse of the Dutch government this year.

“For these reasons I originally wanted a No vote as a political message against austerity and to promote a more balanced approach at the European level. I don’t oppose some level of collective budget discipline nationally if it leads to a positive reform of the Eurozone: Eurobonds, the ECB becoming the lender of last resort, a banking union so that banking problems will not be localised and made the problem of one or two Member States, etc. But it should come as part of a grand bargain where it’s not simply about the core and the periphery, but about building a working Euro-system. Suggestions that ratifying the FST would give Germany enough confidence in the Eurozone to sign up to Eurobonds “sometime in the future” did not comfort me.

“So why have I moved towards a Yes?”

Well worth a read. If it were me voting today, I have to say I have no idea what I’d opt for…

May 30, 2012
by Nosemonkey
1 Comment

Free markets, the euro and currency competition

Following on from the last quick post on the near-inevitable failure of a post-euro Drachma, another interesting spot: Eurozone breakup and the doctrine of competing currencies. Also worth reading in full – not sure if I entirely agree, but any advocates of scrapping the euro (because devaluation’s like, great, yeah?) need to be able to answer these arguments, especially about the logic of their position:

“For if their assertion of competing [National Central Banks] were correct, then it could also be deduced that any kind of ‘national competition’ is beneficial, which understandably leads down the perilous path of protectionism, mercantilism and state omnipotence…

“They uphold that national currencies will somehow restrain government spending since profligate politicians will no longer be able to borrow cheaply, something that they could do during the pre-crisis years of the euro. This implies therefore the absurd position that ‘profligacy’ was born with the euro and is deeply embedded in it; whereas all hitherto governments were prudent in their spending when they had their national currencies in place. Such a multi-illegitimate conclusion derives from the observation that interest rates in the eurozone converged and countries like Greece could borrow at rates that only Germany could enjoy before.

“Though the convergence in interest rates is correct, this view is… confusing correlation with causality…

“Moreover one only has to look at the fiscal position of governments prior to the euro era, or to check the current level of government spending and money easing in countries like the US or the UK, to realize that the argument of mystically restrained states by money they create out of thin air, is inconsistent with reality. This assumption effectively casts to the wind all economic knowledge on the subject.

“The bottom line is that under the given circumstances in the eurozone’s political economy, the only realistic/feasible option, even from a Hayekian, free market perspective is the preservation and improvement of the euro.”

May 30, 2012
by Nosemonkey
1 Comment

Is the Drachma doomed?

Interesting piece by an American investment and free trade advocate giving a handy bit of background to Greece’s money woes – just in case you weren’t pessimisitc enough already. Has some convincing, interesting points – worth reading in full:

“Modern Greek monetary history is one of default, inflation and destruction of wealth when the wealth preservation was entrusted to the government. Centuries of history support this statement…

“In the end, Greece has already lost. Europe has lost but can still cut further losses if it acts with congruence. We do not expect that to happen in any pro-active way. It is not in the nature of Europe’s political leaders to reach consensus pro-actively. They do so when forced by market events. We must think of European leaders as reactive, not proactive.”

As I say, well worth reading the whole thing.

May 29, 2012
by Nosemonkey
3 Comments

On Žižek, Eliot, and the need for an EU Reformation

Slavoj Žižek often seems to exist to be controversial, and I certainly don’t agree with many of the details of his latest piece for the London Review of Books on the Greece crisis (short version, as ever with old Slavoj: the usual consensus is wrong, and the far-left has all the best ideas). However, elements of one passage did stand out as worthy of futher consideration, as it tallies neatly with the way my thinking’s been going of late:

“In his Notes towards the Definition of Culture, T.S. Eliot remarked that there are moments when the only choice is between heresy and non-belief – i.e., when the only way to keep a religion alive is to perform a sectarian split. This is the position in Europe today. Only a new ‘heresy’… can save what is worth saving of the European legacy”

For Žižek, the new heresy of choice is different to what it is for me. And what he considers worth saving of what it is he means to be the “European legacy” may well differ to my take. But for once I think I agree with him on this much – if the EU/Europe is going to get through this crisis, it’s time for some radical new thinking.

The old pro-EU / anti-EU / europhile / eurosceptic divisions have long been irrelevant sidetracks to the key aim of making Europe / the EU as pleasant and prosperous as possible for the people. These days, all those old divisions are obsolete.

I’ve long been labelled as a “pro-EU blogger”. I don’t think this is true any more, if it ever was.

I’m not pro-”EU”. Not pro- this EU. Not with all its flaws. Not with all its slowness to reform. Not with its continual lack of ability to tackle the key priorities facing the people of this continent.

This European Union is simply not good enough. This European Union needs to be replaced pretty much in its entirety.

This European Union has failed.

The cause for this, as I see it, is simple – and long-term readers will find this no surprise:

- It’s not the anti-democratic technocrats that Žižek blames.
- It’s not the eurocrats and red tape so hated by the anti-EU right.
- It’s the EU’s powerlessness in the face of the governments of the member states.

You want more? Have more:

- It’s those governments’ insular, selfish “us first” attitude.
- It’s those governments’ refusal to work to anything longer than national-level electoral cycles.
- It’s those governments’ continual lack of long-term vision.
- It’s those governments’ continual abandonment or watering down of the few long-term plans that emerge for short-term gain.
- It’s those governments’ continual lack of investment in the system – not just in terms of money, but also attention.
- It’s those governments’ continual blocking of any and all efforts to increase democratic participation in pan-European bodies through fear of losing power and legitimacy.
- It’s those governments’ deliberate misrepresentation of what the EU is, does and can do.
- It’s those governments’ constant scaremongering about worst case scenarios if they don’t get their way.
- It’s those governments’ delight in claiming credit for everything good the EU does while blaming it for everything bad, even when it had little or nothing to do with that badness.
- It’s those governments’ constant emphasis on “the national interest”, even though they know that those interests increasingly frequently coincide with their neighbours.
- It’s those governments’ continued refusal to face the fact that they are powerless to survive on their own.

And those are just off the top of my head – feel free to add your own suggestions in the comments.

To return to the Žižek/Eliot quote above, what the EU needs it not reform – it needs a Reformation.

(And yes, this all needs to be developed much further. For starters, I need to work out a new term to describe my position, as none of the old ones fit…)