Considerations from the EU enlargement
Donald Sassoon
Introduction
In the course of the next decade the member states of the European Union will confront a formidable challenge: the unprecedented opportunity to unify the eastern and western parts of a continent devastated, between 1914 and 1945, by a cataclysmic ‘civil war’ and divided, between 1945 and 1989, by the Cold War. The division between ‘Eastern’ and ‘Western’ Europe, however, had preceded these events by several centuries. In the Eastern part, serfdom and absolute rule prevailed for a more protracted epoch than in the West.
Later this area was under the sway of authoritarian regimes and oppressive forms of socialism. In the West a complex entwining of economic, political and cultural patterns resulted, first, in the development of the Renaissance, the Enlightenment and political liberalism and, later, the concurrent rise of capitalism and social democracy under the aegis and protection of nation- states. At the beginning of the third millennium the limitations of these European nation-states – in both East and West – are manifest. Nevertheless, obituaries are premature. Nation-states are as popular as ever.
Within them the great gains achieved by social democracy and social Christian values after 1945 – the commitment to full employment and the welfare state – have been eroded. It has become increasingly recognized that key issues of growth, employment, monetary stability and labour market regulation require a collective transnational approach. The EU is by far the most important institution available for this purpose. Like the nation-state, it was born as a ‘capitalist’ club and, consequently, ostracized by most social democrats. Forty-five years after Messina, there is far more hostility and suspicion from the right – above all in Britain – than from the left. The future shape of Europe, however, is far from predetermined. Those on the left have to consider what institutional arrangement will provide the best opportunity for the development of social democratic politics.
The nation-state is still the most relevant unit for the development and implementation of policies aimed at greater social justice, a more equal distribution of opportunities, an efficient health-care system and a high quality education system. However, national macroeconomic management can no longer effectively ensure that separate European states are able to
achieve full employment, growth, a healthy balance of payments and price stability. Even social democrats, once so committed to national roads to socialism, cannot ignore these variables. They impinge upon socialist parties whenever they are in power.
The German SPD-led government, so proud of Modell Deutschland, was able to withstand the first oil shock, in 1973, but not the second, in 1979. In 1981–2 German GNP fell, the balance of payments deficit became excessive, and monetary policy was linked even more to US interest rates. Helmut Schmidt recognized that Germany was as interdependent as everyone else. In the 1970s, the oldest and most admired social democracy in the world, that of Sweden, was forced to abandon its highly prized solidaristic wages policy. By the end of the 1980s the Swedish model itself was widely regarded as defunct as unemployment climbed to levels unimaginable a few years previously. The social democrats grasped the European nettle and Sweden joined the European Union. In France in 1981–2 the attempt of the socialist government to reflate the economy while others were deflating made the resulting balance of payments problems unsustainable.
Other policies, besides macroeconomic management, require supra- or transnational coordination: energy, the environment, security and defence, cross-national transport, competition and regulation. Much of this is widely accepted by European social democrats and reformers, who are increasingly united in their determination to press for greater European integration. The European objectives of most neo-liberals have been achieved: there is a single market for goods and services, most barriers to intra-European trade have been removed, the degree of regulation has been considerably harmonized.
Consequently, some claim, the time has come to slow down or freeze the tempo of integration.
This chapter starts from two premises. The first is that what is at stake is an environment for further development of the reformist process, while defend- ing existing achievements. It implies that there is nothing ultimate and conclusive, no miraculous millenarian end-state. The second premise is that the past successes of reformist politics have depended on the extent to which their values were absorbed and accepted by their conservative opponents – whether out of conviction or opportunism or simply because compelled by the prevailing climate of opinion. The successes of the European model in the post-war period – what was called, appropriately, the ‘social democratic consensus’ – required not only favourable international economic conditions – and particularly economic growth – but also the collaboration of ‘the other side’. Left parties and their conservative opponents established a common political framework, that is, a de facto constitutional settlement, within which they contested elections. Successful nation-states rest on majorities and a consensus far larger than any government can have. They are grounded on a trans-party consensus. An authentic constitutional settlement – if it is to survive – is one which is accepted by a large majority.
The development of the EU as a true ‘union of nations’ must, inevitably, proceed on a similar basis if the edifice is to be sturdy enough to resist
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ephemeral political changes. A Europe in which progress thrives is one in which the fundamental organizing rules, its institutions and legal framework, facilitate the development of a ‘social’ Europe. It is one in which full employ- ment can become, once again, an attainable goal, one in which employees’
organizations are regarded as legitimate as those of employers and not as a conspiracy against economic growth, one in which a significant percentage of the population is not excluded from material prosperity. This can only be the result of some form of cooperation with Christian democrats, liberals with a social conscience (e.g., the British, Swedish or German liberals), and those conservatives committed to social cohesion (such as many supporters of Gaullism in France and the remaining ‘one-nation’ Tories in the UK).
Problems facing the project of integration
It has become commonplace to talk of a crisis of European integration. Action has not followed from words. A community whose great boast is to have brought prosperity to Europe still faces nearly twenty million unemployed and has little idea what to do to put them back to work. This massive joblessness has multiplied the pressure towards an expansion in public expenditure. The Stability and Growth Pact has been called into question. A community exulting in its contribution to the maintenance of peace on the continent found itself paralysed when faced with the war in Bosnia. Uncertainty and self- doubt prevail. The Maastricht Treaty found little resonance in the European electorates. The Danes had to be bamboozled into two referendums before acceding to it. Only a fistful of votes ensured France’s assent, thus saving the treaty – and the country’s political establishment – from ignominy. The vote in favour of joining the EU in Sweden and Finland was hardly overwhelming – 52.3 per cent and 56.9 per cent respectively. With some economic justification, the Germans, and not just the Bundesbank, were deeply worried about renouncing the Deutschmark. For different reasons the British are equally worried about giving up the pound. The Irish have voted against Nice. How many more referendums will be required before they understand which way they are supposed to vote? The rise of xenophobia in the EU, associating immigrants with rising criminality, seems unstoppable.
Among Europeans there is little European consciousness. The construction of Europe is seen as dominated by complicated economic considerations:
‘West European governments seem mired in technocratic, soulless discus- sions’ (Moïsi and Mertes1995; Noël1995). Some declare themselves to be ‘in favour of Europe’ out of fear of being left outside. Others are against it because they dread losing the little control they have over their own political system or because they are suspicious of becoming submerged in an indistinct cultural homogeneity. The European electorate is increasingly disenchanted with Europe. At each election for the European Parliament fewer vote: 62 per cent in 1979, 61 per cent in 1984, 58 per cent in 1989 and only 56.5 per cent in 1994. In 1999 the overall average turnout was 49.8 per cent, with national
turnouts ranging from 91 per cent in Belgium (where voting is obligatory) to 24 per cent in the UK, fewer than those who voted in the television programme Big Brother. In 2004 it was even less; the low turnout in the new entrants pushed the overall average down to 45.5 per cent. It should be added, however, that there is a systematic diminution in electoral participation throughout Europe and North America. Many of those who vote do so to punish their national governments because there are no clearly defined European issues and few people know what their representatives can do. In any case MEPs have too often allowed themselves to be bullied by their national parties and have yet to learn to think and behave as members of transnational parties (Moïsi and Mertes 1995: 123).
Yet the European Union is unquestionably the central institution of the new European architecture. ‘The Six’ became fifteen and now are twenty-five. The Union includes the whole of Western Europe (except for Norway, Iceland and Switzerland, absent by self-exclusion), all the Eastern and Central European countries (apart from Bulgaria and Romania) and the Mediterranean islands of Cyprus and Malta. There is not a major political force anywhere in the EU openly campaigning to withdraw. The internal market in goods, capital and services is almost accomplished. The resources earmarked for the less favoured areas of the Union, the Structural Funds, have been expanded. There are no other extant projects which can be an alternative to the EU. Those outside in Western Europe are small states whose ‘sovereignty’ will touchingly be preserved while they will be forced to comply with EU decisions upon which they will have no say. More generally there is a near-universal recognition (at least outside the UK) that many of the problems facing the nation-state require a supranational approach. Even among the Europhobes, few talk openly of withdrawal. In sum, not all is gloom. For instance, so far the Euro has been a resounding success. But, of course, the real test will be the result of the enlargement to the East and to the South (Nugent 1995).
Thus, while it may be accurate to talk about crisis, it is far from terminal.
The real players are still the governments. Historically speaking, the key moments in the construction of an integrated Europe, ‘an ever closer union’, have always been the result of the interaction of independent sovereign states, drumming out a compromise on the basis of their self-interest and entrenching it into a treaty, that is an agreement between states. Thus, for the second and third pillars, dealing, respectively, with the Common Foreign and Security Policy and justice and home affairs, are covered largely through an intergovernmental decision-making procedure system, unlike the first pillar, which is based on Community procedures established by the treaties and subject to the jurisdiction of the European Court of Justice.
More or less integration?
The major problems confronting the member countries of the EU – including unemployment, democratic deficit and security – are more likely to be dealt
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with effectively by further political integration than by merely consolidating the status quo. Until not so long ago, at least in Britain, such assumption has been held by a relatively small, though influential, band of Euro-enthusiasts.
Conscious of being in a minority, they have tended either to embrace more or less uncritically any move towards further political integration or to disguise their ultimate federalist objectives by defending political integration in purely economic or national terms. The British Conservative Party, except for the period when it was led by Edward Heath, so far the only firmly pro-European prime minister the UK has had, has maintained a minimalist and reactive approach towards Europe. It has approved of ‘passive’ economic integration (i.e., the removal of tariffs, the formation of a single market), which is consistent with its neo-liberal principles, but opted out of or opposed clauses that are not so consistent, such as the Social Protocol of Maastricht. The so- called conservative ‘Euro-sceptics’ (a characteristically British euphemism for Europhobe) advocate a relatively unregulated free trading area.
This is the royal road to Euro-disaster. A largely unregulated free trading area with a few abstract rules would lead to a massive widening of regional differentials within the Union. A large single market without some form of overall political direction may ‘work’ in the neo-liberal sense provided there is considerable homogeneity among the countries participating. This homo- geneity does not exist. We are still far from true convergence. Profound differences will remain in unemployment and growth rates, GDP per head, and productivity. It is difficult to imagine that elected national governments could possibly sit back while their countries turn out to be at the losing end of such minimalist integration, particularly if there is no prospect of the situation being improved by initiatives from the Union. The pressures on these governments to withdraw into some form of nationalist protectionism would become unstoppable.
Moreover, minimalist Europe offers little hope to the countries of Eastern and Central Europe. They would, in practice, be asked to remain defenceless in the face of formidable competition from the West and to subject themselves to the kind of shock therapy which has led to the downfall of so many post- communist governing coalitions. Minimalist Europe based on negative integration (i.e., removing barriers to integration) may have been appropriate for the original six formed at a time when Europe as a whole was on the way towards a spectacular expansion in term of growth rates and general prosperity.
By the time the six had become twelve (after three rounds of enlargement) the degree of interdependence linking the European countries had grown immensely while confidence in the possibility of constant growth and full employment had considerably diminished. The previous enlargements brought in relatively rich countries. The last and any further enlargements (assuming Norway, Iceland and Switzerland stay out) brought and will bring in countries close to or poorer than the lowest ranking members. Such a process cannot be envisaged without a drastic revision of the existing architecture of the European Union.
The guiding tenet should be that of la politique d’abord. Economics has been for too long the key driving force of the Union: originally a Steel and Coal Community, then a Common Market, then an Economic Community leading to the development of a Single Market, and finally the prospect of Economic and Monetary Union (EMU). Politics has taken second place. Keen Euro- peanists have for too long held on to the idea that economic integration would, eventually, spill over into political integration (the so-called functionalist position). Those less than keen have hoped that it was possible to integrate economically but not politically. What this suggests is not simply that we should reverse the order of priorities and declare that political union leads to economic union, but that we should devise a suitable political framework for further economic and social progress.
Nothing epitomizes more clearly the economistic inclination of the Maastricht Treaty than the sharp contrast between EMU and EPU (European Political Union). The section of the treaty dealing with EMU was a meticulous and tightly constructed document equipped with clear goals, setting out well- defined objectives and the institutional mechanism for meeting them. The EPU treaty was a timid and equivocal document imbued with good intentions:
‘harmonious and balanced development of economic activities’, ‘non- inflationary growth respecting the environment’, ‘raising standards of living’,
‘the implementation of a common foreign policy’, ‘strengthening the protection of the rights and interests of the nationals of the Member States’; the more it moved towards a social democratic agenda, the vaguer EPU became:
the Union would develop a policy towards the environment, and contribute to a high level of health protection, to ‘education and training of high quality’ and
‘to the flowering of the cultures of the Member States’, and so on.
As usual the political and social dimensions were tacked on at the end as some kind of afterthought. The member states, through their executive, would decide on some momentous economic steps, then, as if realizing that outside the proverbial smoke-filled rooms there were real women and men, citizens on whose behalf the decision-makers supposedly acted, a few bones called
‘democratic accountability’ and ‘social dimension’ would be thrown in to make the overall economic package more alluring: first the direct election of the European Parliament, then a modest extension of its powers, later a social protocol, with, in addition, a few pacifying endorsements of citizenship.
What is at stake is not the construction of a European centralized super- state. This is not on the agenda – and has never been. What is in contention is the shape of an evolving community of nations. The dividing line is between those who will defend – come what may – the principle of intergovern- mentalism as the guiding force in the European community and those for whom political integration and the pooling of sovereignty is the surest way to build a democratic union of citizens. For the former, sovereignty is a zero- sum game. Whatever is lost by the nation-state is gained by others – the Commission, the Germans, the French. For the latter, the loss of national sovereignty is a gain as long as one pools resources, power and rights. That one
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can, and often does, benefit from a de facto loss of sovereignty is hardly a novel discovery. The key issue is the establishment of a framework for the exercise of collective sovereignty. It has to be seen whether the constitutional treaty of June 2004 is a step in this direction.
The challenges of the EU enlargement
The Maastricht Treaty resolutely reaffirmed the principle of the acquis communautaire as the fundamental procedure for the acceptance of new members (Art. B and Art. C). This may be referred to as the ‘classical’ method (Preston 1995). It asserts, once again, the tenet that every new member must accept all that has been achieved so far, lock, stock and barrel: the treaties, the entire corpus of legislation so far adopted, the case law of the European Court of Justice, all resolutions approved and all international agreements. It has been estimated that these amount to 90,000 pages of official texts. It means that, as the Community deepens and expands, the conditions facing new members multiply. It also means that existing members face challenges they may not be equipped for or willing to countenance.
This is why, in practice, the acquis has become more a general declaration of intent than an inflexible principle. This is not a novel position. In 1975 the Tindemans report envisaged a two-speed Europe to enable economic integra- tion to proceed even if not all participants were ready for it (Chaltier 1995).
Since then prospective members have been asked to meet certain conditions before entry, but are then allowed a considerable paraphernalia of temporary derogations and transitional arrangements. The crucial point is that everyone should agree on the common goals. In other words, countries are accepted once they have demonstrated that they will be able to reach the acquis. The acquis itself is no longer a pre-entry condition. It is an ever-changing and perhaps ever-receding goal which tends to shift the burden of adjustment borne by the applicant, especially those whose standards are lower than those existing in the EU.
The entry of Austria, Sweden and Finland in 1995 was the last relatively
‘painless’ enlargement. These new members had successful market econ- omies with a well-entrenched system of social protection and higher health, environmental protection and safety standards than the EU minimum. They were members of EFTA and, as such, participants in a multiplicity of established arrangements with the EU. All of them had reached the ‘post- industrial’ stage, unlike even the most developed of the countries of Eastern and Central Europe. In spite of their small population, Austria, Sweden and Finland actually raised average GDP per capita in the EU, albeit by only 1 per cent. Austria, Sweden and Finland are net contributors to the EU budget. The recent and future members will be recipients.
However, even this painless enlargement did not meet the acquis from the start. Sweden and Finland brought within the EU Arctic and sub-Arctic remote regions characterized by exceptionally low population density. New