European Integration is currently undergoing its most difficult phase since the Treaties of Rome entered into force. The European Union (EU) has shown itself incapable of dealing with the structural flaws inherent to the Maastricht Economic and Monetary Union. In the refugee crisis the EU Member States have failed to develop a common policy with a community-wide key for allocating refugees. Trust between individual Member States is eroding. The relationship between the EU and the Member States is strained. In several parts of Europe, re-nationalisation trends have intensified. These re-nationalisation tendencies manifested themselves most fatefully for the EU in the UK, where on 23 June 2016 a majority of citizens voted to leave the EU (the Brexit).
This pamphlet focuses on the current crisis processes in the EU and puts forward practicable solutions for resolving them. Chapter 1 deals first of all with the economic and social crises of the EU and the problematic re-nationalisation trends. The refugee crisis, the break with the “welcome culture” and the concept of “Fortress Europe” are the subjects examined in Chapter 2. The next chapter then investigates the flaws in the design of the Maastricht Treaty and the economic and social impacts of austerity policy in the euro zone (Chapter 3). The central fourth chapter discusses in depth the “Left’s” attempts to break out of the euro system. Here it becomes apparent that the “Eurexit” position is argumentationally weak on many fronts. Were it to be implemented politically, the EU, but also the Exit states, would be plunged into massive socio-economic crises. In light of the negative impacts of leaving the euro, in Chapter 5 this paper makes the case for a radical reform of the EU and the euro system. It shows that with a far-reaching paradigm shift in economic, employment and social policy and by introducing an alternative European system for regulating current account imbalances (clearing union), national debts and the financial markets, the EU can weather its crises and stabilise. Another Europe built on solidarity is possible!
The European Union is at a crossroads. For many years the European idea was associated with the hope of finally overcoming the national trenches and securing peace in Europe after two World Wars. Cooperation instead of confrontation – for many this was the foundation for prosperity and democracy. Little of this is still recognisable today. It cannot be ignored – European Integration is undergoing a deep, if not existential crisis. “The failure of Europe is a realistic scenario”, as President of the European Parliament Martin Schulz stated (SpiegelOnline, 25 December 2015).
Nationalism has returned to Europe. In many European countries right-wing populist and right-wing extremist parties are gaining ground. The Front National in France, the FPÖ in Austria, Geert Wilders’ Partij voor de Vrijheid, the AfD in Germany all stand for an increasingly strong political current which sees the answer in isolation and nationalistic segregation. They are not just the expression of a crisis of legitimacy and hegemony in the nations in question, but also of ever-vaster sections of the populations turning their backs on the idea of European Integration.
The Brexit may well not be an isolated case, if the Front National in France, the FPÖ in Austria or in Italy the Cinque Stelle movement prevail. In Eastern Europe, the Hungarian Fidesz Party and Orbán government, and the PiS government in Poland mean the existence of an authoritarian nationalism which at the same time wants to profit from a radically neoliberal EU single market. Since the financial crisis in 2008, if not before, the European Union’s promise of prosperity has been obsolete.
In the “crisis countries” in Southern Europe record unemployment of around 25% and youth unemployment in some cases of around 50% prevail. Social benefits have been slashed, collective bargaining and social standards dismantled or whittled away. The economic output of both the euro zone and the EU as a whole is stuck at pre-crisis levels in spite of the German export boom.
The design flaws in the euro as a monetary union without a common economic and fiscal policy led to the current account imbalances between the surplus countries (above all Germany) and the deficit countries growing. This in turn led to the euro crisis emerging out of the international crisis. The misdiagnosis of the euro crisis as a “sovereign debt crisis” in turn prescribes the wrong course of treatment of a rigidly imposed austerity policy.
The troika comprising the European Commission, European Central Bank and the International Monetary Fund and the type of decision-making applied in the euro group are the expression of neoliberal “post democracy” (Colin Crouch) – of an institutional apparatus out of the reach of any democratic oversight, which has the power to usurp democratic decisions by national parliaments or even referenda like in Greece.
The euro has not brought the European states together – it has deepened the trenches between the countries. The Federal Republic of Germany is the main culprit here with its mercantilistic economic policy. The one-sided emphasis on national competitiveness has pushed current account imbalances to extremes. At the same time, the Federal Republic of Germany – as the dominating power in the euro group – imposed the rigid austerity policy on the deficit countries. The neoliberal concept of the “competitive state” has prevented a resolution of the euro crisis based on the principle of solidarity to this very day. The image which dominates public opinion in Germany of the “lazy Greeks” delving into the pockets of the frugal and economically successful Germany set the stage on which the people unsettled by the neoliberal destruction of all safety nets in life could identify with the German “Volk als Nation” (the people as the nation) (Poulantzas) and segregate themselves from others. The ill-fated euro “bail-out policy” thus acted as godfather to the rise of the AfD.
The massive refugee movement in the aftermath of the failed “Arab Spring” dealt another blow in the European Union crisis. Cracks started to appear in the EU Schengen system which guarantees freedom of movement within the European Union and secures the external borders (“Fortress Europe”). Some time ago the Dublin Agreement already set forth that the state in which a refugee first set foot on European Union soil is responsible for registration and conducting the asylum procedure. The refugee movement hits the Southern EU countries particularly hard as a result. Dublin II consolidated and perpetuated the North-South divide in the EU (Kasparek/Tsianos 2012). Sealing off the EU external border to refugees and illegal migration was and is the prerequisite for the freedom of movement inside the EU in the Schengen system. With the increasing number of refugees migrating to Europe across the Mediterranean and then onwards via the Balkan routes or Italy, the EU’s external border had started to crack. The European countries reacted by reintroducing border controls and closing their borders. This policy went hand in hand with an increasingly xenophobic and Islamophobic mood and a strengthening of right-wing populism in Europe. A response to the challenge of the refugee movement based on solidarity – the reception of refugees by all Member States – was thwarted by the bulk of the Member States. In the wake of this the Turkey Agreement meant that securing Europe’s borders was outsourced to the Turkish Syrian border in contravention of all human rights standards. This solved zero problems and only increased the suffering of the refugees further. As long as the root causes of displacement are not eliminated, refugees will seek new ways to reach Europe.
All of this is symptomatic of the crisis in the neoliberal hegemonic project which dominates to date with the deregulation and economisation of all areas of society. The expansion of the single market, the creation of Economic and Monetary Union with its stability criteria and the liberalisation of the labour markets were the key drivers of integration (Wissel 2015). With the euro crisis and the crisis of the Schengen system, this mode of integration has come up against its limits. This leads first to a more radical neoliberalism, which – like in the case of Greece – imposes austerity policy authoritarianly on the citizens and the national government. Second, it gives rise to centrifugal and nationalist tendencies in the EU – the Brexit being the most recent peak in this development.
In the German and European Left, too, following the defeat of Syriza in summer 2015, the discussion has flared up over which strategy should be pursued in light of the crisis of the European Union and the neoliberal trajectory, which continues to dominate. Those calling for a “Lexit”, the exit of the Left, are increasing. We believe this is a mistake. Leaving the euro or an end to the euro would entail grave economic and social distortions and would lead to new conflicts between the nations all the way to an economic war.
The Left’s answer to the migratory movement cannot be the return to the Nation State and national borders. Yanis Varoufakis quite rightly notes: “Given that the European Union has established free movement, Lexit involves acquiescence to (if not actual support for) to its ending and for the reestablishment of national border controls, complete with barbed wire and armed guards”. (Varoufakis 2016) And he adds: “Similarly, do they truly believe that the Left will win the discursive and policy war against the fossil fuel industry by supporting the re-nationalisation of environmental policy? Under the Lexit banner, in my estimation, the Left is heading for monumental defeats on both fronts.”
Given the internationalisation of capital and the transnationalisation of power relations, a policy which aspires to regain national sovereignty through a Lexit is an illusion. Instead we must start fighting for a different Europe: “Breaking .... [the neoliberal] spell means to re-discover the European space as a space for struggle, for political experimentation and invention … The issue of wage and the issue of income, the definition of rights and dimensions of welfare, the topic of constitutional transformations related to single countries and to the European constituent issue can, today, only be addressed at a European level. Outside of this sphere there is no such a thing as political realism.” (Negri/Mezzadra 2014)
For the full text please refer to the pdf on the right (50 pages, 440 KB)
Why this pamphlet?
Chapter 1 – EU crisis processes and problematic re-nationalisation trends
Chapter 2 – From the "welcome culture" to "Fortress Europe" or the EU's failings in the refugee crisis
2.1 The root causes of displacement
2.2 The escalation of the refugee crisis in 2015/2016 and the EU-Turkey Agreement
- The failure to adopt a common European refugee policy (July to September 2015)
- The welcome culture starts to crumble (October to December 2015)
- The expansion of "Fortress Europe" (January to summer 2016)
2.3 Military isolation, dependence on dictators, yet more deaths in the Mediterranean Sea
2.4 Creating legal ways into the EU and rewarding willingness to take in refugees.
Chapter 3 – The design flaws in economic and monetary union and the euro zone austerity policy
3.1 The shortcomings of economic and monetary union and the failure of reform efforts
- Box - The European Commission's proposal for deepening EMU of November 2011 ("Blueprint")
3.2 Austerity policy and its economic and social impacts
- Box – Gender equity and crisis
Chapter 4 – Time to leave the euro? A critique of the Left's exit proposals.
4.1 Devaluations and real wages.
4.2 Over and undervaluations in the European Monetary System from 1978 to 1992.
4.3 Leaving the euro: A high price for not much autonomy and the risk of an interest and debt trap
- Box – Joseph Stiglitz: Reform or divorce the euro?
Chapter 5 – The six pillars of a radical reform of the euro: more Europe, but different
5.1 An end to austerity: expansive fiscal policy and European investment programmes
5.2 A European Clearing Union: rebalancing current accounts
5.3 A community-wide debt policy
5.4 Towards a European Social Union
- A European labour and employment policy
- A European wage and income policy
- European coordination of the social security systems
- Box – A European unemployment insurance
5.5 Stricter financial market regulations and a more effective fiscal policy
5.6 A democratically legitimised European Economic Government
For a European Union built on solidarity
Klaus Busch / Axel Troost /Gesine Schwan / Frank Bsirske /Joachim Bischoff /Mechthild Schrooten / Harald Wolf u.a.: Europa geht auch solidarisch! Streitschrift für eine andere Europäische Union, Hamburg: VSA 2016
88 pages | EUR 7.50 | ISBN 978-3-89965-745-6