Inside the EU pavilion at the 2010 World Expo in Shanghai. Flickr/fabonthemoon. Some rights reserved.

Etienne Balibar identifies two crucial dimensions in the European existential crisis: accelerating inequality and recurring nationalism. It is easy to agree with his argument that a radical and fast re-foundation of the EU is urgent.

Balibar connects his argument to the one Ulrich Beck made in German Europe, that the only way to re-build Europe is from the bottom-up. This would be a dramatic shift because European integration since the establishment of the Coal and Steel Community in 1951 has always been planned from a top-down perspective. The Cold War saw a redistribution of powers between Europe and its nation states, a process Alan Milward famously described as the European rescue of the nation state, through which the economic benefits of market integration would provide the member states' governments with a powerful tool to subsidize national welfare.

Welfare was meant to demonstrate the superiority of the western model, in a situation where many remembered what happened to Weimar and where over 25 per cent of the electorates in Italy and France voted for the Communists. In the view of many western leaders, democracy was potentially dangerous and had to be controlled from above. The plan was to use welfare to keep the extremes away from national democracies. The overarching instrument of control was the High Authority, which has now become the Commission. Europe was from the outset a technocracy never defined as social or democratic - these categories were left to the member states.

This model worked reasonably well during the Cold War and the economic boom triggered by the re-building of Europe, and by the rearmament efforts to prevent/prepare for the next war. All this changed fundamentally at the beginning of the 1990s. As the end of the Cold War raised hope about the 'end of history' and the final victory of liberalism, a powerful neoliberal ideology marketed as economic theory painted the colourful imagery of a seamless world built on a self-propelling economy, which performed best without rules. Deregulation became a buzzword. At the same time, 'old' capitalism, based on the financing of industrial production, was transformed into financial capitalism, where operations and speculation on global markets became the motor of the economy.

The EU underpinned this development under the motto of deregulation. At no point did anybody fully realize the possible consequences of this colossal shift, at least not until the collapse of the banking system in 2008, which led to the nationalization of gigantic losses through sovereign debts, which, in turn, provided the recovering but still hungry financial markets with their next prey: the debt-burdened states.

The Maastricht Treaty was advertised as a federal step, but in practice it marked the beginning of a power transfer from the Commission to intergovernmental decisions in the Council through a shift from hard law (acquis communautaire) to a cluster of soft law, monitoring, bench-marking, open methods of coordination, a legal dilution of the project and yes, deregulation. The technocratic regime of 1951/1957, with its limited but clear rules, shifted to a non-transparent intergovernmental negotiation machinery.

Re-founding Europe

This historic framework is important to keep in mind when one discusses how to confront the present existential threat. A shift from top-down to bottom-up, yes, but how, and what does it even mean? Take, for example, Beppe Grillo's campaign for a total destruction of the ancien régime and the dawn of a new, benevolent, populist order in Italy. History is full of warnings against this apocalyptic scenario. Bottom-up brings spontaneity - which is important - but the fury and rage, frustration and despair which are floating all over Europe, the spectre that haunts the continent, needs organization and canalization towards concrete political goals aiming for more equality. The social protest must be given a political target; a target that can respond to the protest. The protest needs a voice, and the voice needs a listener who can act. Currently, the European Union has none. 

The Commission and the Council are stuck in their legacies of opaque conclaves: no radical re-foundation can be expected to stem from there. More of the same will not break down the dictatorship of the financial markets. The Commission and the Council are de-legitimized in the eyes of too many European citizens, and their recent U-turn from ritual invocations of the markets to a new language describing them as Europe’s most dangerous enemy, which has to be fought with bazookas and firewalls, is simply too big a conversion to impress. The new desperate language is an expression of paralysis rather than of the ability to act. When the leaders return from their overnight weekend meetings contemplating how to appease the markets, and then proceed to describe the situation as alternativlos, without alternatives, one can almost hear Carl Schmitt echoing from a dark past. They have overstretched the legal framework of the EU, which makes the situation dangerous, and themselves helpless.

This is why the new impulse must come from the European Parliament, but through political rather than institutional reform. The EP must be the forum to think about a more social Europe. The disembedding of the market forces, to use Karl Polanyi’s strong metaphor, must be met with their political reembedding, and the architecture of this new regulation must be designed through political contention and debate in the EP. There is no other forum for this necessary step towards a new Europe.

The role of the left

It is the scandalous failure of the European left that it has neglected to identify and define European solidarity. The left has been stuck in its national happiness and hubris, and is now harvesting growing nationalism, which can only be confronted through concerted European action. This action must overcome mere anti-nationalism, and outline the credible contours of a new regulative order for social Europe. Such an agenda requires new European parties in the true sense of the word, European election lists, constituencies and election campaigns of a new kind, where the issue of a social Europe and European solidarity are given a prominent place. To do this, the EP must first stand for itself and demand a new place in the architecture of the EU. The current situation is scandalous: when Deutsche Bank director Ackermann advised the Council on the bank crisis in a meeting, as always closed to the public, the Speaker of the European Parliament was refused entry. 

The failure of the European left cannot be blamed on some inherent systemic logic. It is a failure of human agency. Only human agency, a push towards a more social conception of the economy, can save Europe. Markets are man-made, not self-playing pianos or inevitable historical facts. 

It is clear that social reform through a stronger EP requires economic reform. A social Europe must be built on a strong, efficient economy. And plans for economic efficiency in a social Europe must necessarily confront the myth of Germany as the one and only model to follow. The discussion on German economic efficiency has totally missed the critical question of the price of this efficiency; declining labour standards, rock-bottom wages, and general employment insecurity through outsourcing. The Hartz concept cannot be a model for Europe. Economic efficiency must be defined in other ways.

Having said this, it is also clear that efficiency is a term that can only be defined from an ideological point of view. It must be taken down from the high heaven of economic theory, challenged and reconstructed. First and foremost, any rethinking of economic efficiency for a social Europe must confront the fact that the difference in social standards and economies is big between east and west, south and north. This fact has so far been concealed instead of confronted. What does this mean for labour markets and enterprise relocation? Europe’s left has failed in that it has avoided this question since the big bang enlargement of 2004. It cannot be circumvented any more. Draconian immigration policies and fortress Europe cannot be a long-term solution, and nor is the present competitive race to the bottom.

These are, in a nutshell, a few of the problems we need to think through when we evoke a bottom-up re-building of Europe. But how realistic is this perspective? On the left, Hollande has been a big disappointment so far. The emerging German election campaign does not show any desire to fundamentally re-think Europe. There does not seem to be any light elsewhere either. Voilà, what can one do other than whole-heartedly agree with Etienne Balibar’s final words: it is improbable that this proposal for a solution to the European crisis will gain a political hearing, but this is exactly why one must insist on its necessity.