Europe – beyond supranationalism

Back in 2009, when the Treaty of Lisbon entered into force, many observers expected a pause in the European integration process after almost a decade of hard bargaining over the revision of the Union’s contractual foundations. After several resounding defeats for governments in referendums on treaties, it looked like a consolidation phase was on the cards rather than great leaps forward or the pursuit of more comprehensive or even grandiose integration schemes. Such an assessment is evidently light years away from the stance of today’s political leaders, who have been adopting new instruments and establishing new institutions in quick succession since the spring of 2010. The reconstruction of the eurozone and the EU is in full swing. Political economist and ATTAC Germany council member Alexis Passadakis analyses these developments and identifies options for resistance.

Protests against the crisis-management policies imposed by European governments have been gaining momentum, especially since the occupation of the Plaza Puerta del Sol in Madrid on 15 May 2011 by the Spanish ¡Democracia Real YA! (‘Real Democracy NOW!’) movement. Another fresh groundswell was generated by the global day of action on 15 October 2011, in which protest actions took place in more than 1,000 cities worldwide. Spain, Greece and Portugal but also Britain and other countries experienced a number of demonstrations, occupations in public spaces and strikes. From September 2008 to September 2011 alone, there were 24 politically-motivated general strikes in Europe. To date, however, these struggles to resist a dismantling of the welfare state that is unprecedented in post-war Western Europe have been largely unsuccessful. What makes such failures even more serious is the fact that, ever since the start of the eurozone crisis, Europe has come up with more and more mechanisms designed to impose drastic and lasting restrictions on the power of national governments to pursue their own budgetary and social policies.

Back in 2009, when the Treaty of Lisbon entered into force on 1 December, many observers expected a pause in the European integration process after almost a decade of hard bargaining over the revision of the Union’s contractual foundations. After several resounding defeats for governments in referendums on treaties, it looked like a consolidation phase was on the cards rather than great leaps forward or the pursuit of more comprehensive or even grandiose integration schemes. Such an assessment is evidently light years away from the stance of today’s political leaders, who have been adopting new instruments and establishing new institutions in quick succession since the spring of 2010. The reconstruction of the eurozone and the EU is in full swing.

The public debate on the new architecture of the European institutional structures is chiefly between proponents of closer integration (and hence of a transfer of sovereignty to the supranational EU level), and those who favour right-wing, nationally-focused and openly chauvinistic positions. In Germany the latter group came to the fore in debates when many members of the liberal party, FDP (Freie Demokratische Partei), rejected the European Stabilisation Mechanism (ESM) in a ballot. In this constellation of confrontation between supporters of more powers for the EU from various party-political camps, from neoliberals to social democrats on the one hand, and chauvinists on the other, the aspirations of social movements for a ‘social Europe’ are being squeezed out. What options are open to trade unions and social movements in this sort of political scenario at a time when the EU and the eurozone are being transformed into an authoritarian alliance for austerity?

The new European architecture

The European elites initially expected that the global economic crisis would be overcome by a few bank-rescue and economic-recovery packages. When at the end of April 2010, the Greek debt crisis began to attract worldwide attention, the ruling elites – particularly in Germany – saw it as an opportunity to radicalise their policy of whittling away the elements of the welfare state that had withstood the neoliberal assaults of the previous 25 years. In spite of all its U-turns and shifting positions on specific issues, the Merkel Government has essentially followed this line consistently since the spring of 2010. For this reason, the current policies of those who govern Germany cannot simply be ascribed to ideological blinkers. The journalist Stefan Kaufmann has advanced the theory that the paramount goal of the current policy of consolidating budgets and increasing competitiveness can be summed up in the language of economics as the Europe-wide lowering of unit wage costs. To put it another way, those who govern Germany want to see a radical shift in the balance of power within society in the various EU member countries. Public services are being curtailed and privatised, trade unions are being marginalised, and welfare recipients are being divested of their social rights. In this respect, the German Government is no different from the others, whose hopes are likewise pinned on austerity. Because of its dominant role in Europe, however, Germany is uniquely well placed to structure relations among the EU Member States along more hierarchical lines, with the Germany at the top, France as the junior partner and the other countries consigned to the periphery.

The German elites have managed to achieve this shift in the balance of power in two different ways – firstly by preventing the establishment of certain measures, such as the introduction of eurobonds and a more active role for the European Central Bank as a buyer of sovereign bonds, that might ease the pressure exerted on governments by financial investors and credit-rating agencies. In the absence of such measures, the pressure exerted by the financial markets is turned into a political advantage forcing the implementation of budget cuts. When Italian government bonds came under pressure in November 2011, the head of the German central bank, Jens Weidmann, lifted the lid on this strategy. “Recent experience,” he said, “has shown that market interest rates do play a role in pushing governments towards reforms”. If the ECB buys up more sovereign bonds, he explained, “there’s also a risk that you mute the incentives that come from the market”.1 Sovereign debt is being used as a political crowbar to prise the heart out of the welfare state.

The second way in which the balance of power is being restructured is through the strengthening of international regulatory institutions,2 notably the European Commission and the European Central Bank, through the creation of new institutions, namely the European Financial Stability Facility (EFSF) and the European Stabilisation Mechanism (ESM), and through the emergence of additional informal institutions such as the Troika3 and the Frankfurt Group.4

By introducing new rules at the European level,5 the Troika’s memoranda for its effective protectorates of Greece, Ireland and Portugal can overturn the political and social compromises reached between key players at the national level which have been obstructing the implementation of the EU’s Lisbon agenda for greater competitiveness, adopted in 2000.

Writer and globalisation critic Naomi Klein has called this type of frenetic crisis-management policy ‘shock therapy’, harking back to the ‘Volcker shock’, the sudden massive interest-rate hike by the US Federal Reserve under the chairmanship of Paul Volcker in the early 1980s. The resulting recession served to stifle the demands of wage-earners, trade unions and the new social movements. This measure generated a shift in the balance of power within US society in favour of what Milton Friedman called the ‘neoliberal counterrevolution’.

More powers for Europe, but why?

It is remarkable that scarcely any attempts have been made to justify this new phase of European rulemaking and institution-building in terms of welfare effects and jobs, as was customary from the late 1980s and during the single-market project, throughout the Maastricht process and right up to the Treaty of Lisbon. From the perspective of the European elites, the invocation of a justifying motive now seems to have become superfluous. Instead, the prime consideration is to reassure the financial markets. Former Belgian Prime Minister Guy Verhofstadt, who is now a Liberal Member of the European Parliament, hit the nail on the head when he said that a European economic government which could impose tough sanctions and an extension of the powers of the EFSF were on the agenda because the financial markets demanded these things.6

More and more, it is Europe’s role in the world that is emphasised as an argument for transferring more sovereignty to the EU. An explicit admission occasionally emerges that the main concern here is Europe’s competitive standing in relation to the United States and, more especially, in relation to China. The economic and geopolitical ramifications of the new multi-polar global constellation are used to justify the social sacrifices being imposed on the population of Europe in order to sharpen the competitive edge of the globally-focused export industries of the euro bloc.

The attempts by the German Social Democrat Party (SPD) and the Greens to lend the slogan ‘More Europe’ a social and democratic dimension do nothing to change this model of competition-driven integration. Instead, they take the present context as read and position themselves behind a Keynesian form of European economic governance and the democratisation of the EU institutions. This essentially amounts to a strengthening of the European Parliament. The continent, however, was never further away from a ‘European social model’ than it is today. Confronted with this situation, the various SPD and Green visions do not offer a political alternative to further integration, because they cannot explain cogently which forces in society could actually ensure that another transfer of sovereignty to the European Union would be made to yield any kind of social or democratic benefits. A form of European corporatism with strong trade unions and civil associations of the kind that reinforced the welfare state until the 1980s is not on the cards; and given the current squeeze on trade-union activity, nor is it a long-term prospect.

The result of the drive to transfer more powers to the EU and shift the balance in favour of the supranational level is the extremely broad coalition supporting the EFSF and the ESM, including the Christian Democrat Party (CDU), FDP, SPD and Greens. This in turn is provoking an antithetical reaction in the form of chauvinistic criticism of the EU, which is being linked with consummate skill to the issue of national democracy, not only in Germany but also by Marine Le Pen in France, for example. Accordingly, under the present circumstances, more EU integration and the oft-invoked spectre of renationalisation within the EU are no longer mutually exclusive developments, but two sides of the same coin. This has to do with the fact that the EU, since the mid-1980s, has essentially been a project driven by big business, which has created a deep social divide. Chauvinistic euroscepticism is gaining ground in response to the power shift in favour of the supranational tier and to the erosion of democracy. In this scenario, more Europe or more EU means more nationalism too.

A bottom-up Europe based on solidarity?

Successful struggles by social movements and trade unions for an EU based on solidarity have been few and far between. In 2006, coordinated European campaigns against the Bolkestein Directive on the liberalisation of the service sector did manage to have the directive watered down. Strikes and demonstrations, some of them with militant involvement, led to the complete withdrawal of the EU Directive on access to port services, known as the ‘Port Package’, in the same year. Otherwise there have been scarcely any successes.

In spite of the myriad calls for more EU-wide action that have rung out time and again, especially since the conclusion of the Treaty of Maastricht in 1992, there have scarcely been any permanent alliances with the ability to take decisive action. Major initiatives such as the Euromarches against unemployment in the 1990s and the European Association for the Taxation of Financial Transactions and Aid to Citizens (ATTAC) have limited potential to create pressure, the European Social Forum process has long since passed its peak, and the trade unions are structurally and strategically weak at the European level. Besides the permanent defensive posture of anti-neoliberal forces, the relatively modest human and financial resources of social movements are also a factor in their limited efficacy on the European stage. And on the whole, the body politic remains structurally focused on national or even local issues.

Given, however, that the present momentum towards integration in Europe reflects a desire to step up the neoliberal project in favour of the wealthy and given that, in spite of some initial steps, strong international European movements are unlikely to spring up overnight, the task is now to open up a new position, not only against chauvinistic tendencies but also against the supranational movement.

Even before the present integration drive began, Frank Schmidt-Hullmann of the German building, agricultural and environmental workers’ union IG BAU assessed the situation as follows: “As long as the majority tendency in the EU is neoliberal and the terms of the treaties continue to impose on Europe a structure based on liberalisation, deregulation and privatisation, the continual extension of EU powers which many trade unions advocate or tolerate will have ceased to serve any useful purpose”.7

As in the case of the ‘no’ campaigns against the Treaty of Lisbon, a genuinely internationally-coordinated but essentially nationally-focused strategy to block further integration measures does seem plausible from the perspective of social movements in Europe. An alternative development path based on solidarity cannot be enforced through the European institutions but only in opposition to them. The Fiscal Compact could become a test case. At the same time, such an approach would not amount to the rejection of a coordinated European economic policy, because a coordinated European minimum wage as well as a property levy could also be agreed inter-governmentally via the Open Method of Coordination.8

The current exacerbation of the crisis is paving the way for a broader alliance of forces within civil society to effect this kind of strategic shift. In view of the social situation in the peripheral states of the EU, it seems logical that the social movements in those countries will be in the vanguard.

Alexis J. Passadakis (M.A. Global Political Economy/Sussex) is a long time Member of the Council of Attac Germany.

  • 1. Interview with Jens Weidemann in the Financial Times, 13 November 2011.
  • 2. Ulrich Brand, Staatstheorie und Staatsanalyse im globalen Kapitalismus, April 2009.
  • 3. The Troika, comprising the EU, the ECB and the IMF, lays down the economic and social guidelines for the governments of Greece, Italy and Ireland in its memoranda, which are backed by the approval of credit lines.
  • 4. The Frankfurt Group currently acts as the informal shadow cabinet of the EU. It comprises Chancellor Merkel of Germany, President Sarkozy of France, IMF President Christine Lagarde, ECB President Mario Draghi, European Commission President José Manuel Barroso, European Council President Herman van Rompuy, Olli Rehn, European Commissioner for Economic and Monetary Affairs, and Jean-Claude Juncker, Chairman of the Euro Group.
  • 5. On the Euro-Plus Pact, see Hans-Jürgen Urban, ‘Stabilitätsgewinn durch Demokratieverzicht? Europas Weg in einen neuen Autoritarismus’, in Blätter für deutsche und internationale Politik, July 2011.
  • 6. Guy Verhofstadt, Only a United States of Europe can save the Euro, speech at the Centre for Strategic and International Studies (CSIS), 28 February 2012 - Washington D.C.
  • 7. Tr. from Frank Schmidt-Hullmann, ‘Was können und was müssen Gewerkschaften europapolitisch tun’, in Dieter Scholz et al. (eds), “Europa sind wir” - Gewerkschaftspolitik für ein anderes Europa. Westfälisches Dampfboot, 2009.
  • 8. The open method of coordination (OMC) is a relatively new and intergovernmental means of governance in the European Union, based on the voluntary cooperation of its member states. See the Wikipedia article on the Open Method of Coordination.