by JAYATI GHOSH
The countries in green are the founding members of the EEC (European Economic Community); in blue are those who joined the EEC later MAP/Wikipedia
It will be tragic indeed if the European Union collapses under the weight of its own contradictions only to yield to the petty and xenophobic forms of national neoliberalism that are currently the most forceful alternative to neoliberal economic integration. By JAYATI GHOSH
Even before the result of the United Kingdom referendum came, the European Union was facing a crisis of popular legitimacy. The result, especially in England and Wales, was certainly driven by the fear of increased immigration, irresponsibly whipped up by xenophobic right-wing leaders who now appear uncertain themselves of what to do with the outcome. But it was as much a cry of pain and protest from working communities that have been damaged and hollowed out by three decades of neoliberal economic policies. And this is why the concerns of greater popular resonance across other countries in the E.U.—and the idea that this could simply be the first domino to fall—are absolutely valid. So the bloc as a whole now faces an existential crisis of an entirely different order, and its survival hinges on how its rulers choose to confront it.
How the union was formed
A little history is in order first. The formation of the union itself, from its genesis in the Treaty of Rome in 1957, was as much a result of geopolitical pressure from the United States as it was of the grand visions of those who led it. The six founding countries (Belgium, France, Germany, Italy, Luxembourg and the Netherlands) built it on the hope of the European Coal and Steel Community, established in 1950, that greater economic relations would secure lasting peace and prosperity. Somewhat ironically, they were egged on by the U.S., which in the post-Second World War period not only provided huge amounts of Marshall Plan aid to western Europe but also urged the reduction of trade barriers between them to encourage more intra-regional economic activity and provide an effective counter to eastern Europe during the Cold War.
Expansion of membership
The U.K. joined the E.U. in 1973, along with Ireland and Denmark, followed in the 1980s by Greece, Spain and Portugal, and then by Austria, Finland and Sweden in the 1990s. Then, some years after the fall of the Berlin Wall, a large intake of 12 central and eastern European countries in the 2000s, with the most recent member being Croatia in 2013, brought the number of E.U. member countries to 28. Over the years, expansion has been accompanied by the push for “ever greater union”: the Maastricht Treaty in 1993, which laid down the ground rules for economic engagement and strengthened the institutional structure of the European Commission and the European Parliament; the creation of the Single Market of free movement of goods, services and people starting from 1994; the Treaty of Amsterdam, which devolved some powers from national governments to the European Parliament, including legislating on immigration, adopting civil and criminal laws, and enacting the common foreign and security policy; and even a common currency, the euro, shared by a subgroup of 19 members from January 1, 1999.
Some would say that it is remarkable that a continent with a fairly recent history of wars and extreme regional conflicts could have achieved such a combination of expansion and integration. There is no doubt that, from the start, this was a project of the political and corporate elite of Europe, and the “voice of the people” was not really taken into account. Yet in many ways it was also a visionary, even romantic, project that could only go as far as it has gone because, even as it increasingly furthered the goals of globalised finance and large corporations, it still contained the (inadequately utilised) potential for ensuring some citizens’ rights across the region.
However, as the E.U. bureaucracy expanded and as the rules—particularly the economic ones—became ever more rigid and inflexible, with the forceful imposition of fiscal austerity measures in countries with deficits and even in countries where there was no real need to do so, the Commission itself and the entire process came to be seen as distant, tone-deaf to people’s concerns and impervious to genuine pleas for help and a degree of empathy. Germany, the undisputed leader of the bloc, epitomised this sense of rigid adherence to (often nonsensical and contradictory) rules. The lack of consistency in creating a monetary union without a genuine banking union or any solidarity with fiscal federalism has created years of economic depression in some countries and deflationary pressures across the eurozone and most of the E.U. Nowhere has this been more evident than in the tragic case of the Greek economy, but this is also true of other countries in the periphery that have been forced into austerity measures with little to show in terms of benefit for more than five years now.
So, in the expanding but unfinished project that is the E.U., corporate elites have basically achieved their goals and won—as indeed they have been winning in pretty much every region of the world over the past three decades. The implicit project of aiding finance and other large private capital and dismantling the welfare state in these countries has moved ahead.
Economic stagnation & inequity
Frontline for more