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Another Europe is Unlikely: Why Socialist Transformation Won’t Happen Within the EU

A lot of ink has been spilled recently on the question of whether socialist transformation is possible within the EU. There are those of us who argue that the EU’s promotion of capital mobility, restrictions on state aid and approach to protecting its borders mean it would be impossible from within the EU for a socialist government to deliver a radical economic agenda. Some disagree with this prognosis, and advocate remaining in the EU.

One thing is certain: a state cannot remain within the single market and implement restrictions on capital mobility, which is one of the four freedoms. By removing impediments to the free movement of capital, the EU has promoted the growth of financial capitalism at both the international and domestic levels. The capital inflows into the most financialised state in Europe – the UK – before the crisis increased both the profitability and the fragility of our financial system, before collapsing in 2007 and catalysing a massive currency devaluation. Today, after decades of financialised growth have decimated our manufacturing sector, the UK has found itself with both a devalued currency and a massive current account deficit.

Since the crisis, there has been a growing recognition amongst economists that capital inflows and outflows affect both the structure of the economy and the risk of financial crises. As such, capital controls are now recognised as an important macroprudential tool (for promoting financial stability). Yet innovations like currency transactions taxes would be prohibited within the framework of the single market.

Without the capacity to control capital flows, the UK would be severely restricted in its ability to tackle financialisation. For some on the left, frequent and severe financial crises, rising debt levels and an overvalued currency are apparently a small price to pay for continued membership of the single market. I have yet to hear a compelling argument that squares this position with a commitment to democratic socialism.

State aid has proven even more divisive, with many Europhiles arguing that nothing in Labour’s current manifesto would be impermissible under EU state aid rules, which have loopholes for ‘market failures’ like climate change. Regardless of the insanity of referring to climate change as a market failure, the very fact this debate is going on highlights an even more important point – that the enforcement of international law depends just as much on interpretation as on statute itself.

Those of us on the left who remain materialists know that liberal institutions operate as a veil over underlying power relations. Liberalism survives by presenting the state as a neutral enforcer of a legal code based upon an objective moral order, rather than what it is: a committee for managing the affairs of the bourgeoisie. International institutions are no exception. All law, and international law in particular, is enforced selectively in the interests of the most powerful states and interest groups. Economic experiments – as we have seen in Greece and Italy – are frowned upon.

This is the point taken up by those who argue that ‘another Europe is possible’. By changing the power relations that influence European institutions, we should be able to transform the EU itself. This draws on the discourses used by democratic socialists at the national level: the state may work in the interests of elites, but a labour movement capable of organising itself electorally could take control of its institutions.

It is hard to see how such a programme could work at the European level. There are currently no democratic avenues through which a labour movement could take control of the executive of the EU: the European Commission. The European Council, which is composed of the heads of states of the member states, is only influenceable through national institutions, and as we’ve seen, continued membership of the EU is a severe impediment to socialist transformation at the domestic level. The European Parliament is essentially powerless and subservient to the Commission.

At its heart, the problem the EU presents to the left is not enough democracy and too many veto players. Even if the left managed the heroic task of taking control of the European Parliament, the Commission and the Council both have a veto, and both continue to be strongly influenced by both the national interests of the most powerful states and special interest groups. The combination of these factors would prevent any attempt at socialist transformation within the EU.

Putting to one side the continued influence of financial institutions and special interest groups on European politics, a more fundamental challenge comes from the national interests of the most powerful states within the EU. For Germany, the priority is reducing inflation and resisting any attempt at debt mutualisation – the guaranteeing of the sovereign debt of other states. For France, it is transforming the rhetoric of ‘ever closer union’ into reality. For the Visegrád group (the Czech Republic, Hungary, Poland and Slovakia), it is maintaining their authoritarian grip on power and securing the EU’s borders.

Governments may change, but these priorities will not shift without the kind of socialist transformation that would take decades to implement. And with every year, as these irreconcilable interests continue to clash, the Euro gets closer and closer to collapse. When it finally does fail, it may well take down the entire EU with it. In other words, another Europe may well be possible, but not until the financialised project that is the EU has finally collapsed under the weight of its own contradictions.

The left didn’t ask for the referendum and it certainly didn’t take place on our terms, but unless we seize this moment to expose the EU for what it really is, the socialist agenda – both nationally and internationally – will be fatally wounded.

Published 6th December 2018

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