Europe’s revolution: the unintended consequences of good intentions

Europe’s revolution is special in the sense that the old regime is determined to overthrow itself without the consent of its peoples. This is the source of what European élites call the populist revolt.

In the French, Russian or Chinese revolutions, the old regimes were overthrown by rebellion from below. In the ongoing European revolution, the European élites stimulate populist revolt, a revolt which then confirms them in the conviction that they are on the right track.

A matter of war and peace.

The late Helmut Kohl made this quite explicit in a speech to the Catholic University of Louvain in February 1996. Disintegration of the nation states of Europe, he stated, into one large integrated political union was a “question of war and peace in the twenty-first century”.

The trouble is that according to the European Commission’s own publication, Eurobarometer, 2% of EU citizens view themselves as “Europeans” only, with a scant 6% regarding their European identity as more important than their national identity.

Now six percent of  a total European population of 511 million is a significant 30 million people, mostly better off, living in the larger metropolises, speaking two or more languages, open to social liberal values, and as much at home in Berlin, as they might be in Barcelona or London.

The rest of the 480 million tend to be of middle or low income, are more bound to their place of origin, speak one language or the local dialect, hold a rag-bag of received ideas inherited from their forebears, and only travel for holidays.

Like the Birmingham tourists on the Costa Brava, eating bangers and mash on the beach, and as red as beetroots from the burning sun, they think they are still in the UK.

In Hillary Clinton’s memorable phrase, applied to their counterparts in the US, these are “the deplorables” of Europe. They provide the habitat in which populists thrive.

Ruling, not cultivating , nature.

Wisdom would suggest that political leaders learn from gardeners who cultivate rather than subdue nature. The habitat is tended, the hedge trimmed, a weed removed, a shrub planted for extra shade, the willow tree well watered. Nature is granted the freedom to surprise, but not to rule.

That is not Kohl’s recommendation. He suggests that European nature-its diversity- be ruled and subdued. Here is what he told his audience over two decades ago in Louvain.

The EU must be federal, he stated, and cannot be predicated on “the idea of a loose alliance of independent, sovereign states, without being capped by a political Europe.”

The idea of a loose alliance, Kohl urged “ is outdated and no solution.”  History teaches “that our continent has suffered long enough under the rivalry of European nations”.

This is a very flimsy base on which to predicate Europe’s political architecture. The rivalry of European nations is one lesson, but far from the only, or even the predominant lesson from Europe’s history.

Nationalism as the dragon to slay.

Take the single example of the outbreak of war in August 1914. The disaster was unleashed between five empires; by the ignorance of Europe’s military leaderships about how lethal modern warfare could be; by Serbian irredentism; by French ressentiment over the 1870 defeat; by the German High Command’s failure to inform the Foreign Ministry in Berlin of its plans to invade Belgium; by Wilhelm II’s bellicose verbosity; by Nicholas II’s partiality to the pan-Slav ideology, and by UK concerns that a German dominated Europe would lead to the UK’s vassalage.

Or take September 1939. The German regime called itself national socialist. The word national held a specific meaning: Hitler’s ideology was as irredentist as Serbia’s had been in 1914, and was steeped in racial doctrine which far from being national was decidedly supra national. It was also socialist in that German industry and finance was hitched to the party-state’s purpose to provide privilege for one Volk, over lesser breeds.

Nonetheless, the prevalent Europeanist conviction after 1945 was that the source of Europe’s travails was nationalism.  The fact that national states were also the source of modern legitimacy, conferred by regular elections where voters sanctioned lawmakers every four to five years, was not taken seriously by integrationists. Their vision was of supplanting national states by a non-political superstructure, where technicians would decide what was right or wrong for Europe as a whole.

Dissolving the people and electing another.

Over time, the powers of the national states would be transferred to Brussels, where experts would rule for the good of the people. Integration meant having the states transform from sovereigns, to members, to provinces. Like frogs, the voters of Europe would be slowly boiled into a different soup.

As Bertholt Brecht wrote after the workers revolt against the communist regime in East Germany in 1953, the party-state “had leaflets distributed in the Stalinallee, stating that the people had forfeited the confidence of the government, and could win it back only by redoubled efforts”. “Would it not be better, he proposed, in that case for the government to dissolve the people and elect another”.

That is what a federal Europe, with supranational institutions, implies, and what President Macron aspires to. For him, the battle is on to create a truly pan-national political movement, an extension as it were of his own movement in France,“En Marche”. In Germany, the words evoke a different past.

“En marche” in French evokes the famous 1830 oil painting by Eugène Delacroix of a bare breasted Liberty holding aloft a tattered tricoleur flag as she storms the barricades of the ancien regime in the name of egalité and fraternité.

In German, marching holds other connotations.  Here is the Horst Wessel song, first published in Der Angriff, owned and published by Joseph Goebbels. “Raise the flag! The ranks tightly closed! The storm trooper marches with calm steady step. Comrades shot by the Reds and reactionaries, march in spirit within our ranks”.

Conjuring a European people out of the existing material is no light undertaking, as this simple illustration suggests. Definitely not, if the policies coming down from on high are not something that the deplorables appreciate.

National or European union

As long as Germany was not united, some ambiguity was allowed: the Federal Republic was becoming both more national and more European. Which was it to be? Germany after all was integrated into the western alliance on the promise of support for its national reunification.

German unity changed all that. Kohl was in the driving seat, and he opted for the full integrationist formula. As the largest European power, surrounded by smaller states, Kohl considered that unless assurance was given that it was to be a European Germany, rather than a German Europe, in a few decades his country would be surrounded by alliances.

Europe would return to the structure of competing coalitions playing for mastery in Europe that led to the wars of the first decades of the twentieth century.

That meant subordinating Europe’s national states into  a supranational entity. The result was the Euro brought into life through the Maastricht Treaty of 1992, the creation of the Schengen area for free movement of people, and the Lisbon Treaty of 2009.

These are the instruments which have stimulated populisms to prosper across the length and breadth of the EU. The deplorables of Europe did not, and do not, appreciate what is being inflicted on them in their name, without their consent.

Take the eight year Euroland recession, from which part of the zone is emerging. Economic affairs Commissioner, Pierre Muscovici, picks up the cudgels on behalf of France’s twenty-five year quest for an EU finance minister, with a large redistributive budget.

“Having a Eurozone budget is absolutely decisive if we want to address the populist challenge..”, he says. There are some excellent arguments in support of this contention. The problem is that there is scant support for the idea among the German public, and none at all in the frugal four of Austria, the Netherlands, Denmark and Sweden.

Or witness the response of member states to requests from Berlin and Brussels to accept quotas of immigrants from the Mid-East.

Here is Vaclav Klaus, the former Czeck president on the subject: ”We reject the EU’s plan to use foreigners to displace Czecks, and we refuse to allow our country to be transformed into a multicultural society with maladjusted communities, which is what we see today in France and the UK”.

And finally, Brexit. Here are the words of Jeannie Mardon  from Norfolk, in a letter of June 21 2016 to The Daily Telegraph: “It strikes me that many people are amazingly casual about the foundations of our freedom. I do not view an elected Parliament, a unifying Crown and an independent judiciary as mere abstractions. My grandfather fought in the First World War, my father in the Coldstream Guards. His only brother died in a Japanese camp, and my husband was killed while on active service in the RAF. …For my part, allowing an unelected jurisdiction to impose laws on us or to supersede our legislature is a violation of our sovereignty.”

The only game in town.

1989 was the springtime of nations, a confirmation of the principles undergirding the western alliance. Those principles included a free press, fair and regular elections, freedom of association, constitutional states and the rule of law. After the world war, turnout in elections across western Europe was high, opposing political camps attracted committed partisans, and electorates scrutinized political arenas closely. Political parties struggled to win electoral support, and then interpret their preferences into public policy.

Political disengagement began to accelerate from the 1990s onwards, as western democracies’ powers were hollowed out. One reason was a reduction in the intensity of ideological engagement. The cold war spectrum of political parties from the far right-the nostalgics of fascism and national socialism- through to the far left- where political movements sought to outflank western communist parties-ceded pride of place to an apolitical centrism.

The trend was symbolised by the November 1999 conference, held in Florence, on the subject of “Progressive Government for the Twenty-First Century”, and attended by Tony Blair, Lionel Jospin-both former Trotskyites-, by Gerhard Schröder-former leader of the SPD’s far left Jusos in the 1970s, and Massimo d’Alema, the former communist party politician.

The participants trumpeted their “Third Way” of pragmatic opportunism, the politics of doing whatever works. They disguarded ideas of seeking to run a national economy, espoused open markets, the single currency, and the creation of regulatory bodies to supervise the pan- national markets then taking shape.

The EU , Peter Mair has written in his landmark essay, Ruling the Void, The Hollowing of Western democracy, Polity Press, 2013, “…appears to have been constructed as a protected sphere, safe from the demands of voters and their representatives”. As powers ebbed away from national states to conduct their own affairs, they ended in the hands of technocratic institutions- the ECB for money, the Commission for trade and competition, the ECJ for law.

Experts rather than elected politicians came to hold responsibility for money, trade, supervising regulations,, human rights and  the rule of law. The powers of national states to conduct their own affairs, or to respond to voters preferences fell away. The result was, and remains, a more volatile electorate, growing rates of abstention, and voter indifference.

As I have written on this blog, https://storybookreview.wordpress.com/2017/05/06/realpolitik-and-the-european-union-chapter-7-maastrichts-unfinished-business/, the accretion of EU institutions’ powers and responsibilities without the accompanying means or legitimacy to implement them, has tended to politicise the EU’s legal system, multiply the number of rule-making agencies beyond the control of elected politicians, and raise the salience of EU institutions for lobbies anxious to push their own agendas.

Meanwhile,  turnout in elections to the European parliament has continued to fall . As one French commentator observes, ruefully, the EU has failed “to promote the adherence of (Europe’s) peoples to the supranational political system which is the EU”. The reason, she says, is the crisis of national democracy, not the “democratic institutions” of the EU. (Sabine Saurugger, « Crise de l’Union européenne ou crises de la democratie?”Politique Etrangère, Printemps 2017.pp. 23-35.)

The return of Realpolitik and the rise of populism.

It was  and is not the intent of the alliance of interests pushing for “more Europe” to revive the relatively quiescent practice of Realpolitik, long embedded in the European diplomatic and political tradition. But that is what has happened.

The higher the stakes, the more member states have sought to impose their own preferences. Because some states are more powerful than others, they have tended to get their way.

Since 2010 at the latest, this has arguably been the case of Germany. Arguably, because Berlin’s Nein to France’s consistent demand for an EU-wide Finance Ministry with a large redistributive budget at its command has deadlocked the EU for eight years. The result at Commissioner Muscovici has pointed out, has sent inequalities across Euroland skyrocketing. Germany has imposed European recession  against the preference of its western partners.

Yet France and Italy have been powerful enough to ensure that the liabilities accumulating on Germany’s account in the TARGET 2 mechanism of the ECB-liabilities that are the counterpart to Germany’s huge trade surpluses- are used as an incentive for Germany to concede on the Finance Ministry proposal, for fear of seeing the Euro 1 trillion debts owed its companies evaporate.

This is just one example of the incompatibility of national domestic structures, policies and interests that have been rashly aggregated within the EU’s supposed competences. As Jean Claude Juncker has been reported as saying, we have enough problems on our hands already.

My answer is: “Jean-Claude, what did you expect?”. The clash of interests in the EU over money, immigration, foreign relations, what constitutes constitutional democracy, let alone over the very divisive post-modernist agenda of gender politics, climate change, diversity, equality, open borders, or identity politics, has provided a welcoming habitat in which populisms of all sorts flourish.

Europe is not amenable to being straitjacketed into a one-size fits all system. It definitely requires a common political regime, but that regime has to be able to absorb the diversity of Europe as it is.

Europe as it is is reasserting itself in a way that über-ambition for the EU stimulates a       revival of Realpolitik and of populism. The two feed on each other.

In conclusion, Europeans should not leave the field of Europe’s architecture to its actual denizens. They have steered the European canoe into fast waters, and thrown away the paddles on the assumption that the gathering speed of the river is sending them in the right direction. Now they can hear the mighty sound of Niagara, and are panicking.

The analogy has to be suspended here.  What the denizens of “l’Europe” have done is create the present impasse. They have done so because they fail to understand what Europe is.

What is required is not “more Europe”, but less integration as a pre-requisite to a more united Europe. Less for more. Now that’s a good business proposal.

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About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) (www.chinauncovered.net) His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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