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Nosemonkey's EUtopia

In search of a European identity

June 11, 2012
by James Clive-Matthews
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A terrifying but promising sign

Oh, sure, it sounds terrifying at first:


“European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro zone capital controls as a worst-case scenario should Athens decide to leave the euro”

But hell, at least it’s a sign that the buggers in charge are starting to take things a little more seriously.

The euro seems to have been run from day one on a mixture of wishful thinking, misdirection and (increasingly bad) luck. It’s about time some proper contingency plans were put in place – because even if these do smack somewhat of scare tactics designed to knock people into line, the fact that they are being discussed at all is at least a sign that the powers that be are waking up.

Because there *should* have been eurozone exit contingency plans in place from day one, had the thing not been devised an implemented by a bunch of deluded, blinkered idealists who refused to believe in even the *possibility* of failure. That there weren’t was arrogance of the highest degree.

The admission of the possibility that things could go tits up shows a degree of humility that’s long been missing from the European project, and as such should be welcomed even as it scares the hell out of us all.

June 11, 2012
by James Clive-Matthews
3 Comments

How can the EU win the people’s trust?

Former Spanish foreign minister Ana Palacio raises some important points:

“few official pronouncements, let alone policies, are addressing Europe’s deficit of trust and credibility. The current crisis has exposed the original lacunae and widening cracks in the compact between Europe’s citizens and EU institutions, between Europe’s north and south, and between its peoples and its elites.

“…The EU’s supposed democratic deficit is a corollary of the ‘technocratic imperative’ that has emerged as a favorite scapegoat in the ongoing European drama. According to this view, European integration was flawed from the outset, more than six decades ago, because it was conceived and developed as an elite project. But, for as long as the European project delivered prosperity, no one bothered to question its rationale. [Nosemonkey note: Well, some did – but most were dismissed as fringe loons…]

“If EU institutions are to regain trust and relevance, they need to articulate concrete policies and deliver on issues that bear directly on citizens’ interests”

And what *are* citizens’ interests? There lies the rub: Throughout the long history of European integration, at no point have the people been asked what *they* want out of it. At no point have *the people of Europe* been asked what powers and responsibilities should be pooled at European level.

Because although some might write me off as an anti-democratic elitist, my position on the EU has been fairly consistent in one regard for years: European integration will never work unless you ask the people what form (if any) it should take:


“if our representatives at these meetings are starting from a position of ignorance about what the people they are representing actually want, little wonder that they end up with something that the people then reject.”

This has long been the EU’s most fundamental flaw – and it looks like the current politicians running the place still haven’t realised that they need to address this most serious of issues if any of the others they are facing are ever to be properly dealt with.

God alone knows how, though. Perhaps a multiple-choice questionnaire? “Which of the following areas should be dealt with at EU level? Yes / Maybe / No” (etc.)

Hell, it’s no more stupid than most of the other suggestions I’ve heard over the years…

June 9, 2012
by James Clive-Matthews
3 Comments

The failure of European centrism: Towards a hypothesis of historical recurrence

Likely the first of many posts on this – as a fairly hardcore centrist (arguably a stupid concept in itself, that, if you ask most people today) with a dogmatic refusal to align myself to any one political party this is of particular interest. Because, the theory partially goes, it’s the dominance of political centrism that is the cause of our current woes.

Be warned – this is a long one…

Continue Reading →

June 9, 2012
by James Clive-Matthews
2 Comments

Good pessimistic (realistic?) piece from Der Spiegel:

“The next stage in the crisis will be blatant blackmail. With their refusal to accept money from the bailout fund to recapitalize their banks, the Spanish are not far from causing the entire system to explode. They clearly figure that the Germans will lose their nerve and agree to rehabilitate their banks for them without demanding any guarantee in return that things will take a lasting turn for the better.

“The next test of the resolution of Europe’s donor nations will come from the Greeks… after the election on June 17, the Greeks will bargain with the other EU countries to see what it’s worth to them to see Greece abandon the euro. The Greeks no longer have much to lose; but their EU neighbors — and particularly the Germans — still do. This discrepancy will determine the price to be paid.

“Germans have always expected that being part of a united Europe meant that national interests would recede into the background until they eventually lost all significance. One recognizes in this hope the legacy of political romanticism.”

June 8, 2012
by James Clive-Matthews
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Cameron’s confusing approach to the eurocrisis

Good points raised by the eurosceptic organisation Open Europe’s blog today about the British government’s rather bizarre, contradictory attitude(s?) towards the eurocrisis:

“A German-led superstate still seems years off – if it ever will be agreed (no matter how much other parts of the eurozone or markets might like to see it right now).

“In contrast, David Cameron last month called for a bigger bailout fund, shared eurozone bonds and a more active monetary policy from the ECB – in other words, the eurozone quickly moving to ‘joint and several liabilities’ with stronger states indefinitely underwriting weaker ones. That would really be a German-led super state. [Nosemonkey note: depending on your definition of ‘super state’…]

“…the UK government could end up in a rather strange position by sending all these political hares running at the same time. Is it going to veto the same Treaty changes (to establish a fiscal / banking union) that it is now effectively calling for? If it’s deemed that these treaty changes de facto transfer powers away from the UK – i.e. by shifting the institutional balance of power towards the eurozone at the UK’s expense – will it then also call a referendum on those treaty changes? What would the question be?

“This may all work out both in the polls at home and in talks in Europe. But given the unrealistic expectations it raises – and how very difficult it will be to square all these various factors – it may well come back to haunt the Tory leadership, at home as well as abroad.”

David Cameron having an incoherent approach to the EU? This is nothing new, as this post of mine from FOUR YEARS AGO makes clear.

June 8, 2012
by James Clive-Matthews
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Yeah – sounds like a piece of piss…

“Jörg Asmussen, a member of the European Central Bank’s executive board and a former official at the German ministry of finance, outlined what Europe needs to do.

“‘It’s very simple,’ Mr. Asmussen said. ‘We need a more integrated monetary union, because the monetary area that we have now is incomplete. And we have to complement it in a way to make it more stable. One point is a fiscal union. The second one is a financial market union with three key elements: a resolution regime; second element, a deposit guarantee insurance; and third, we need a centralized supervision for the large 25 banks in Europe.”

“‘We need a democratically legitimized political union,’ he added. ‘We need to start this speedily.'”

Well that’s alright, then. Should be doable by the end of next week, I’d say.

June 7, 2012
by James Clive-Matthews
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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 James Clive-Matthews
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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 James Clive-Matthews
4 Comments

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 James Clive-Matthews
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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 James Clive-Matthews
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 4, 2012
by James Clive-Matthews
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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 James Clive-Matthews
3 Comments

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.)