Feature: Damned if EU do, damned if EU don’t

by Carl Rowlands

14 August 2015

The long-awaited in-out referendum on the UK’s continued membership of the European Union (EU) is coming soon, in 2016 or 2017. But it isn’t clear what, if any, clear options exist within a morass of unpredictable consequences and a rapidly growing uncertainty at the heart of a European project increasingly dominated by a single, politically rootless German state.

EU reform and the left.

Those of us on the left, seeking more genuinely internationalist outcomes, might place faith in the prospect of a reformed EU. Perhaps this would entail a wholly improved and empowered European parliament, which would either involve a diminution of national sovereignty or a decrease in inter-governmental decision-making. It might involve a newly remoulded European commission, dedicated to developing new forms of actual co-operation across Europe, rather than simply pushing for liberalisation and strange policy minutia which barely flirts with regulating a fairly destructive consumer economy.

It should be noted that realistic chances of such reforms to parliament or commission happening appear to be exceptionally remote, and that the commission appears to lack both the drive and resources to engineer a form of internationalist social enterprise as many of us would perhaps like to see. Despite the presence of some fairly underdeveloped countries and regions on Europe’s south-eastern borders, we are unlikely to see pan-international development strategies along the lines of a Marshall Plan.

Instead, given that fundamental institutional reform is such a remote and unpopular prospect, a pro-reform stance would perhaps require a more explicit political union of Eurozone countries in order to engineer pan-European Keynesian economics in the core EU federation. It holds out the prospect of Eurobonds, and increasing fiscal union, with political structures which would increasingly cement the Eurozone states into an inseparable federation.

Of course, with the UK unlikely to adopt the Euro in any case, this would not be an option which the UK could seriously engage with or promote, even if it were to continue its reluctant and grudging acceptance of EU membership. If the Eurozone were to allow a Keynesian approach to deficit spending, it would require the amendment of treaties extending back, at least, to the 1992 Maastricht Treaty. Once again, one is forced to conclude that such a development appears unlikely.

Underpinning the UK’s helplessness in shaping the EU from within is the question regarding the viability of long-term membership of the EU without membership of the Euro. The long term implications of this approach for the UK and other non-Euro countries, both economically and in terms of continued EU membership, remain uncertain. This fog of ambivalence surrounds any British plans for EU reform, to the point of such vaguely sketched ideas vanishing in a haze of realpolitik.

After the torture imposed upon the Greek government, the promise of co-operation with left forces across Europe within the context of the existing EU seems to be entirely hollow. Ultimately, the simple prospect of communication between marginalised forces on the left and a popular anti-austerity government has not been shown to be effective in challenging either supra-national austerity or generalised measures being driven across the continent aimed at wage control.

It is well-intentioned, but ultimately disingenuous – based upon recent factual history – to promise pan-European solidarity. Such promises only betray the weakness of the European left, and exposes the limited scope and range of central EU left forces, such as the German leftist party Die Linke. The failure to practically assist the Greek government has harshly exposed the faulty premise of working within a set of European institutions which essentially revolve on a non-democratic mode of operation. As Peter Mair wrote in his posthumously published recanting of the EU Ruling The Void, it is not that the EU is anti-democratic – it prefers some degree of legitimacy at some points, as it enables a smoother governing process – rather the EU is, by and large, non-democratic. The problem that we must face is that the technocratic basis of the EU is, and perhaps now always will be, neoliberal in essence.

Neoliberalism and the EU.

The European Round Table of Industrialists (ERT), consisting of a number of large companies and corporations from across the EU with a distinct bias towards German car makers, is cited by some critics as the true engine for EU development. The ERT claims credit for the sudden accession of the ten ex-Eastern Bloc countries in 2004. It was undoubtedly influential in drafting a number of the treaties surrounding the Economic and Monetary Union and carefully, quietly driving policies aiming at liberalisation and competitiveness within the EU.

The influence of the ERT may help to explain the fact that Germany itself, as well as individual German states, are among the worst transgressors of EU rules relating to state aid and regulation. We can see such developments, especially the accession of countries offering cheap labour in 2004, as an externalisation of an barely contested political and economic battle within Germany itself; where a consensual post-war politics has proven incapable of providing commerce and industry with the level of dynamism it demands. In addition, such institutions as the European Bank for Reconstruction and Development have been indirectly responsible for the collapse of the mixed indigenous industry in the former Eastern Bloc, through a deliberate decision only to lend to private firms, or to lend money in order to facilitate the privatisation of services.

The selective application of privatisation and neoliberalism, combined with wage control, has characterised the EU’s approach in recent years, whilst being careful not to directly confront the more powerful of its members with the contradictions of their own state-funded pet industries, such as the British and French defence industries. The EU has been influenced by both Anglo-Saxon neoliberalism and, more quietly, a form of German ordoliberalism. As long as this remains the case, many on the liberal side of the Conservative party will ultimately remain supporters. It has not overtly driven a Thatcherite agenda to the extent of the UK governments between 1979 and 1997, but it now acts as a supranational enforcer, to ensure that the overall parameters of classical economics are maintained.


If faith that the European project can be separated from its mutated, technocratic-neoliberal state appears to be forlorn, so might also be the faith that the UK can find its political salvation in a post-EU future. Having left the EU, there would be fewer constraints on a future British government in introducing harsh controls on immigration and guest workers. It would be free to repeal the employee protections currently incorporated by the EU (if they survive Cameron’s current renegotiations). It could even re-introduce the death penalty.

There is a significant risk that a post-EU UK would attempt to brand itself as a kind of Singapore, an authoritarian tax and property haven with a subdued, browbeaten populace. Some of the real potential growth areas of Britain’s real economy (for example, university research departments and the associated tech sector) could also be negatively impacted by Brexit. Regions, such as Wales and the North East, could suffer from a loss of already scarce investment funds.

All of these factors would require careful consideration. But most aspects seem somewhat removed from the EU of Angela Merkel and Jean-Claude Juncker. The scope for universities to co-operate would not necessarily disappear, and funding gaps could be compensated with political will. A comprehensive programme of constitutional reform in the UK could ensure that regions finally receive the support they need. With the question of the EU off the agenda, a debate on immigration and asylum could occur which looks at a variety of factors – humanitarian, economic and social.

There is no iron law that, without the tutelage of the EU, the UK would descend into more barbarism than is currently the case – with a prime minister who is happy to dehumanise migrants whilst his chancellor wages attrition upon the poorest and most vulnerable in society. Ultimately, and crucially, the financial crisis and its consequences have proven that the EU cannot protect us from ourselves, and that we are perhaps misguided in thinking that, as a non-democratic set of institutions, it should do.

There are currently countries in the EU which do not pay any support to those people who have been unemployed for more than three months – these people are forced indefinitely into workfare for a poverty wage. There are countries that pay a tiny amount of support to disabled people, and throw people back on the support of their families and social circles, or leave them to rot. This is not an EU which can offer solidarity currently, and if we judge that it is unlikely to become one, then it suggests that an entirely new model for European internationalism may be required. Ironically, and perhaps dangerously, this might inevitably mean the initial reversion of power back to nation states.

Tricky prospects. Take your pick.

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