18 October 2012

Teuton tantrums

Sorry. As a fan of obscure Swedish metal bands Agony, Omnitron and Comecon, I couldn’t resist making the reference, even though it is a bit tangential to the topic of this post.

But, it is fascinating to see the way that the economic landscape lies now in Europe. Germany and France have long been the twin centres of the EU, and now they seem to be at a bit of an impasse over the issue of fiscal unionism. Merkel is doing her damnedest to try and push through what sounds to this listener like a de facto European fiscal union in the form of a ‘budgets tsar’ in the European Commission – an unelected official responsible for overriding and revising the budgets of individual national governments. And her (and, to hear her side of the story, the ‘whole German government’s’) biggest obstacle in this endeavour is none other than François Hollande, the current president of France – who wants to limit the current European summit to monetary and banking issues.

To attempt to dismiss President Hollande as some sort of left-wing loony would be laughable, though that hasn’t stopped neoliberal rags like The Economist from doing just that. The data show that Hollande won his office on the support of the largely traditionalist, still largely Catholic, largely non-langue d’oïl speaking France profonde, particularly in the southwest of France, through national policies which would protect and support minority language groups. He seeks to expand support to small and medium-sized enterprises through lowering corporate tax rates on such businesses and creating specialised lending programmes for them to compete. He seeks a drawdown of French troops from the war in Afghanistan. Though he runs under the Socialist banner, his platform seems about as close as one may find under such a political banner (with the noted exception of Blue Labour in Britain and the possible exception of Austria’s SPÖ) to a distributist one. As such, it should come as little surprise to anyone who has been paying attention that he detects a source of danger to democracy in Europe, and to the Catholic social principle of subsidiarity which the EU (at least on paper) espouses, in Merkel’s federalised budget plans. And thus, he puts his foot down: the only topics of discussion which should be on the table are monetary ones; the current summit is no place for further political experimentation.

At this point, Hollande’s additional request that the terms of any bailout for Spain be spelled out in advance before one is requested also seems eminently reasonable, given what utter political disasters past offers have been for the countries which have received them. But the German government appears unable to face reality on this matter. The current uncertainty which European institutions are causing is troubling to both ‘creditor’ and ‘debtor’ countries: during the Greek credit crisis, Finland (so my Greek-Finnish friend informed me way back when) was concerned about how much it would actually have to end up paying under the end plan. If Hollande had his way, in all likelihood the Finns might not have been any happier about it, but at least they would have known up front what they were getting into.

Germany’s government should take the hint (though in all likelihood they will not, so long as Merkel remains in power) that the cause of European federalism is losing even moderate leftists and centrists like Hollande. Given that the moderate left was in fact the primary base of support for creating a project of uniting Europe in the first place, this hint should be a strong one. But more than that, there is the existential problem that the project of European federalism is currently doing far more to divide Europe than to unite it: wealthy countries which have benefitted from the trade gains the EU has provided are wondering which poor and indebted countries they will have to bail out next; the poor countries are outraged that the wealthy countries have been receiving the benefits of common monetary and free trade policies all this time and are now unwilling to pay it forward. The far-left and the far-right, who (though they are grotesquely and heinously wrong on a variety of other issues) have been promising from the beginning to resist European integration, find themselves rising in popularity across Europe, even as they have been taking more seats in the European Parliament than they are due. Impoverished, humiliated, angry and in a state of inescapable debt, Europeans in struggling countries are seeking solace in political extremists who offer easy answers. It strikes me that Germany in particular ought to be sensitive to this irony, given that the entire project of European federalism was supposed to prevent it from ever happening again.

In Britain, among the three major parties the Labour Party is the most healthily wary of what is laughably termed European federalism, as Mr David Lindsay has helpfully pointed out on numerous occasions (including once very recently). Likewise in France – it is now the Socialist Party and its leader who are urging restraint upon European federalism run amok.


  1. Hello Mr Cooper!

    I've been reading some posts of your blog for some time. I agree with your posts on economic policy and disagree with you on foreign policy, to sum up my position on your blog.

    I would like to ask concerning this article. Where do you think the project for European federalism went wrong or astray?


    from a Filipino in British Columbia

  2. Hello, idrian! Welcome to the blog, and thank you for the comment!

    Where do I think the project for European federalism went wrong? There are a number of things they might have done differently which may have produced better results, one of which being to build support for it in the grassroots before attempting to create the supranational entities which ended up comprising it.

    I was having a similar discussion with one of my co-teachers here: I am sympathetic to the broadly-stated aims of European federalism (namely, to combat the influence and curb the appeal of communism and fascism in European politics), but the current state-of-affairs indicates to me that their methods have been in some sense counterproductive. Very few had heard of the Sverige Demokraterna, or of the Golden Dawn, or the Northern League or the Dutch Freedom Party prior to the recent spats over political and economic process in the EU. But then they started winning, and winning big.

    Creation of all these positions with vast powers over the nations they claim to represent (including the proposed 'budget czar'), none of which are directly elected and only a few of which are indirectly so, does not readily create trust on a continent which has grown used to the idea that democracy is here to stay.

    Hope this makes a bit of sense.

    Thanks again,

  3. Thanks for the reply Mr Cooper. I hope this will be the start of a good discussion.


    the Filipino in BC