Can Europe Make It?

Federalism and the European left

Politically, it may well be ideologically hopeless. But it is crucial to realize that, institutionally, the EU is a very plastic organization.

Giosuè Baggio
18 August 2016

Mock road signs go up near EU Council HQ in Brussels,when heads of government refuse referendums on new EU treaty,December,2007.Yves Logghe/Press Association. All rights reserved.If a spectre is haunting Europe today, it is not the spectre of communism or socialism. To be sure, leftist politics has never completely disappeared from European parliaments and from civil society. But it is no longer the sort of presence that needs exorcizing, more perhaps a shadow of what it used to be.

There are profound causes for this predicament, and some notable exceptions. But the general pattern is very clear. The left is either unable to gain the support necessary to secure power, or when it does so, it is ineffective in implementing progressive policies of any kind. Greece, Italy and France are examples of countries governed by left-leaning coalitions that have failed to deliver substantially along the lines of social democratic action.

An important question arises: what conditions would enable progressive policy to come about again in Europe? I want to suggest that these conditions are not primarily political but institutional. The left may have lost most of its former capacity to organize the working class. It may have surrendered some of its core values to third-way or related projects. But what if these are the consequences of a far more fundamental difficulty? What if progressive policies – broadly understood as a counterweight to capitalism ­– are unlikely to emerge in any of the institutional structures now operative in Europe, that is, nation states and the EU in its present form?

Take two defining characteristics (among several others) of modern states – mandate and scale. Policies that can effectively restrain capitalism are more likely to arise in polities that have the right kind of mandate and the right scale. Most current nation states in Europe do, formally and very fundamentally through their constitutions, have a mandate to protect and promote the rights and capabilities of citizens and workers. It takes only a cursory look at the first few articles of Italian and French constitutions to see that this is the case, for example. But Italy and France, like every other European state now, simply no longer have the right scale to fulfill their mandate. As we know well, capitalism is a global force that exceeds national boundaries. Should a single nation rise up to resist to it, or try to develop alternative economic policies, it will be coerced back into line (e.g., Greece) or cut out of the markets, emptied of its capital, and forgotten until it can again be turned into a pool of cheap labor and a target for exports.

But if individual princes are powerless, their alliance is certainly not. The EU does have the right scale. It has proven able to keep some of the most extreme forms of crony capitalism in check – albeit timidly and inconsistently. What it lacks is the right kind of mandate and the judicial instruments to safeguard the rights of its citizens and workers, lacking as it does a proper constitution. Strictly speaking the EU does not even have its own citizen body: treaties are signed by heads of government and states of member countries, and they do not formalize a social contract between citizens (‘we the people’) and the state. The EU is, rather disconcertingly, a government without a state, a budding Leviathan with no direct democratic legitimacy.

The European polity now has either mandate without scale (nation states) or scale without mandate (the EU in its current intergovernmental form). It is a significant historical fact that both European nation states and the EU itself came into existence (long) before capitalism became the force it is at present, that is, global and financialized. What Europe needs right now is a model where both boxes can be checked: a polity with a proper mandate to protect the fundamental rights of European citizens and workers (and the environment) against unbridled capitalism, and with the scale to be able to actually do so. In short, a federal EU.

What kind of federalism?

Before venturing on what kind of federalism would suit us, and how to actually get there, there is more to be said on why the way forward must be further integration, and why that is a necessary condition for progressive policies to arise again in Europe. No matter how harsh one’s criticism of the EU, it is difficult to argue conclusively that, as many are fond of saying, “the EU is irreformable”. Politically, it may well be ideologically hopeless. But it is crucial to realize that, institutionally, the EU is a very plastic organization: its structure and functioning keep changing quickly. That is a hallmark of its history, too. Additionally, currently this dynamics is not going in any particular direction. Besides a vague promise of ‘ever closer union’, there is no publicly disclosed plan and no agreement as to what kind of organization the EU may be in 10 or 50 years. The EU’s institutional plasticity and its apparent lack of political direction are opportunities for democratic forces at this particular juncture.

Where to go then? Many would agree this is not the EU we want, and arguably not the EU that the working and middle classes need. The disagreement is about whether we ought to scale it up or down. Leftist let’s-scale-down arguments were heard loud and clear a year ago after Syriza stepped into office, when Greece was forced back into a grinding austerity regime after a failed attempt at renegotiating its sovereign debt and the former program of public spending cuts. Similar arguments have resurfaced now in connection with Brexit. Some have a distinct ‘socialism in one country’ flavor, as though it was easier to design and carry through progressive policies at the national level, preferably after leaving the EU.

I do not object that, in theory or perhaps in general, democracy works well in smaller contexts in which self-government can actually happen. What I do object to is the idea that scaling down is viable in the present historical circumstances, for three reasons. First, as I have said above, capitalism is a global process: we are hostage to its scale, at the very least. Change might occur at the micro level where capitalism lacks a strong, diffuse presence on the territory. Small communities (municipalities) can then experiment with alternative forms of organization. But to go any further than this, an institutional frame of the right scale, such as a large federation, is required to match the might of capitalism and its financial ramifications.

Second, the political forces that are currently trying to initiate the disintegration of the EU are markedly right-wing or populist: e.g., ‘exit’ referenda are now being considered by nationalist parties in France and the Netherlands; an anti-immigrant consultation will be held in Hungary next October, proclaimed by its conservative government. Countries that are most likely to eventually break away from the EU are those in which right-wing parties have most support and perhaps a greater likelihood of winning the next round of elections. In those circumstances, there will in the short term be little political space left for progressive forces.

The third reason relates to the organisation of the left’s struggle for post-European hegemony. The current ‘leave’ trajectory is not about this or that country: it prescribes that enough countries leave the EU so that it falls apart. But what follows disaggregation? If the post-European left aims at coordinating political action so that progressive or radical policies may arise again throughout (or in the majority of) the continent, it will have to do so outside the framework currently provided by European left parties (socialists, greens etc.) unless creative ways of blending a pro-European and an anti-European left are found.

This will pose major organisational problems, because there is nothing in place or in progress that remotely resembles a platform that could serve that purpose. The only emergent structure of that sort, Yanis Varoufakis’ brainchild DiEM25, seems resolutely pro-European to date. The alternative to undertaking this massive coordination effort is either to let each country follow its own path to socialism inside the capitalistic world, or use the existing European progressive parties in a scaling-up strategy (which we will come to shortly). For these reasons, it is unlikely that progressive policies could be designed and enacted in Europe either within individual states in a post-EU future or at the central EU level at present. Scale down and status quo politics seem bound to fail.

The alternative is then to scale up to a federal polity. Federalism in Europe is often associated with the idea of the ’United States of Europe’, but that is rather unfortunate. The similarities between the USA and a viable federal model for Europe are vanishingly few. The future EU might be an asymmetric federation where different states and regions would enjoy different degrees of autonomy in specific policy domains. Federalism and regionalism will have to be combined to ensure that the EU’s cultural and linguistic diversity corresponds to units of self-government. The mandate for the federal government should apply only to certain policy areas such as welfare, taxation, banking, energy, industry and foreign affairs. It may be fairly easy to see what would constitute progressive policies in these areas: a banking and fiscal union would allow the EU to further regulate financial markets, and redistribute the returns of taxes on inert capital or on financial transactions; investments in the circular economy would help the EU re-industrialize, and would kindle local economies by connecting markets of commodities with markets of raw materials and components, all this reducing industrial and consumer waste.

But these kinds of solutions can only be worked out in a federal union if certain political conditions are met.

How might we get there in practice?

The first step is to reverse the approach adopted in the EU so far, namely the Monnet doctrine of top-down gradualism.  We, the peoples of Europe are now in a worryingly restless state. Anger and disillusionment are easily intercepted by right-wing and populist parties or movements in dubious referenda such as those mentioned above, Brexit included. The left, like all other democratic forces, should realise that this plebiscitary zest is likely to persist, and that the space for direct democracy is limited and open to contest.

The thrust forward, however, can only come through direct democratic deliberation. Democratic forces might put forward their own referenda before more events such as Brexit happen. In a recent piece in the Italian paper Il Manifesto I suggest that it may be appropriate for the EU to call a consultation on its future institutional form, along the lines of the 1946 referendum in Italy, where it was decided whether the country would be a republic or a monarchy. That was a turning point in Italy’s history, and was followed by the drafting of its republican constitution (1948). But there is no ‘Philadelphia moment’ for the EU approaching anytime soon, as the elites seem unwilling to consider either new treaties or a constitution.

The options to be offered in the referendum may be a federal union vs a smaller intergovernmental EU, safeguarding the common market and currency. Those who believe progressive policies are easier to carry out at the national level may go for the latter option. Norway has been running enlightened social democratic policies for many years as part of the EEA, but not of the EU. Perhaps the fact that this is now less the case suggests that those policies are not sustainable in the present conditions. Still they were a viable option for some time. That might seem like a decent way to leave the EU as we know it, better than what Grexit might have been and what Brexit might be, regardless of whether these events actually provide any chance of pursuing a single-state path to socialism.

Better still would be to transform the EU into a federal union where liberal socialism can be constructed democratically by citizens and political parties. This may be the last call for European capitalism to put its creative force at the service of people and the environment—which is about the only residual reason why capitalism might be tolerated in a democratic society. This may also be the last chance for progressive politics as such, before Europe reverts to the catastrophic nationalism that has marked its modern history, and before democratic forces are subsequently obliged to rise to an altogether different and more ominous task than running a federal EU.

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