Monthly Archives: December 2011

New year, new challenges face the EU

Saluton amikoj! A new year always allows one to try and predict what will happen. It’s a good basis for discussion and so I have written this to get your juices flowing.

As a result of the economic crisis, many pro-EU minded people hoped Santa would bring much needed constitutional and structural reform (Being the exciting bunch they are). Instead the gift was a garish knitted jumper knitted by Sarkozy and Merkel covered in the muck of Cameron’s tantrum. The jumper is too small, and will not cover all the necessary bases required to strengthen the Eurozone’s economy in the long term, and will not cope with the stress of a probable recession. As the European states, excluding Britain, come together to help each-other with structural funds and political concession looking for short and long term stability and growth, a cap on debts is looking less of a solution and more of an appeasement for the markets.

2012 therefore brings us the fallout of these decisions as early as January where Presidents, Chancellors and Prime Ministers will meet once more. Van Rompuy and Barroso face the challenge of trying to facilitate a negotiation which most commentators seem to have come to expect little progress. Indeed part of the agreement is to have more regular meetings, which shows many things. Partly a desire to keep power in the hands of national leaders, rather than delegating power to EU institutions, and partly a necessity to be seeming to make progress. (what a cynic).

Van Rompuy said once that “politics is the art of making the necessary possible”. This lacklustre approach shows how the role of the EU will be to facilitate the demands of Governments and that the prospect of Eurobonds is unlikely to come in the earlier part of the year, but cannot be ruled out if the markets and root causes are to be taken seriously. Both Barroso and Van Rompuy have shown support for them, and as time moves on it is possible that necessity may require them. I am not an owner of a crystal ball however.

The possibility of referenda stands in the way of progress too. It is certain that the leaders will try to avoid them, after the legnth of time which previous treaty change has taken in the past.

Europe cannot avoid public votes. France faces its election in May, germany preparing for theirs in 2013. The Finns, Slovaks, Czechs and Lithuanian can expect some grandstanding as well, with the Euroskeptics likely to try and capitalise on perceived weaknesses and leaders likely to take a more populist approach before their elections. There is a huge amount of work which Pro-EU campaigners have ahead of them, and a struggle to make sure debate does not crumble into banal flag waving Euroskepticism.

These challenges put another pressure on the more neutral European institution, Van Rompuy must focus on finding compromise and leadership, reminding leaders with fast approaching elections that co-operation is in the interest of all member states and their citizens. This is economically one of the most vital times for the EU to be working together, it is the role of the EU institutions to facilitate it and make it happen.

Other challenges arise, which may or may not not come to the fore as I am certain that Economics will be in the limelight. Some of these challenges are of a  constitutional nature. The public has always been detached slightly from Europe, especially in the UK. However, with its importance for finding and end to economic turbulence (as well as Cameron’s dithering performances) has brought it to the limelight. So issues of what legitimacy each state has to dictate another state’s finances comes up, and how to manage closer economic integration in a way that is accountable and fair. Although from the looks from the current approach and past approaches, I wouldn’t expect too much. (Being the terrible cynic I am…)

As well as this, things such as Shengen Enlargement will come to the fore, with some MEPs raising concerns about the new membership of Bulgaria and Romania. This will probably become more of an issue closer to the time of their entry, and the Pro-Europeans must fight against much of the prejudices which parts of the right wing have towards these states.

Even with the resistance and the slow pace of progress, progress is still happening (unless you are British). States in Europe are recognising their responsibility to each other and each others’ citizenry. The Golden Rule, although crap, is a recognition of this increased responsibility and is an outlook on how to achieve long term stability (and hopefully will spark debate). For me, I look forward to seeing more of what the PES will come out with under its new leadership concerning the direction which Europe will head (I’d hope it’d be more radical, and there are signs its approach may be). It will be an interesting year, with a lot on the line and a lot of debate. Of course crystal ball gazing is boring, and lacks analysis, so I hope most of all that this blog will be more of a ground for discussion come 2012.

Note: It is a question which I am asked, why suddenly Europe became my number one topic. When the EU becomes important in the media, there is much spin (or barefaced lies) from many news sources, with others being a little too parochial. There’s no point sitting at the side watching things happen, why not get involved? Also, it’s not the EU itself that should concern the pro-EU community, but what it can bring. It is a great tool for development, rights, social justice and progress and it is those values which we should fight for.

Why Labour should remain close to Europe

I read this post by Sunny Hundal recently about why Britain should move further away from the EU. It symbolised a viewpoint which has given up on Europe, or caved in to pressure. Presumptions that the Euro is dead is certainly not one which I would take, the leadership in Europe take or the Labour Party should take as frankly, we have too much to lose. Secondly, pushing restart on things is easy to say until you realise just how much we have achieved within Europe and how much there is to lose.

Although being pro-Europe, I am pragmatic about it. I do not consent to everything that comes out of Brussels because I’m pro-EU just as I don’t consent to everything that comes out of Holyrood because I agree with devolution. Europe is a tool to deliver a better life for our people, and if we understand how it works and how to get the most out of it for our citizens then we can use it to our advantage.

Economic Union has on the whole in my view been good for the long term development of Europe. The speedy development of the economic periphery and strengthening of the center has allowed people to enjoy a comparatively high living standard. However, I am not uncritical of it. As I mentioned in the last post, there has been a conservative attitude not focusing enough on mutual gain which has been one of the key systematic errors. The inability of the Conservative leaders to get past prejudices and scapegoats for the Eurozone Crisis is one of the things that is holding them back from implementing the structural reforms and short term bailouts needed to solve the crisis. If they were to implement some of the structural reforms then they would have to stop pandering to their voters and trying to gain votes. They would have to surrender power to the greater good to prevent sudden stops, playing the system and lack of unity.

I don’t believe that it is impossible though. We have done it many times in the past, and when we realise how serious the situation is in the Eurozone then I believe that progress is being made, albeit not fast enough. The alternative to this progress is that countries would not be working together to bail each other out and that they would prolong the crisis by adding populist strings to any stability fund. If there was no EU then I doubt that the little we have seen would’ve happened at all. Greece’s downfall doesn’t benefit Greece, it doesn’t benefit the Eurozone and it doesn’t benefit us. In this, we all have a responsibility to keep it afloat. As Van Rompuy says, it is too important that we keep the Eurozone afloat for us to fail, we must make the necessary possible.

Hundal’s two main points were that the Eurozone was effectively dead and that the Merkozy deal was imperfect. Apart from the battle for the Eurozone being very much alive and kicking, I firmly believe that Governments have a responsibility to solve it for the sake of the millions, if not billions, of people who will be affected by the economic catastrophe of a Euro collapse. Crisis never calls for leaders who give up, and if Labour were to take this attitude then it’d be forgetting exactly who the party is there to protect; the millions of working people across the UK. Failing to stand up for these interests is far worse than taking a controversial viewpoint as it may lose the support of the Eurosceptics.

Secondly, the Merkozy deal wasn’t perfect. I have already argued that the deal had its flaws, especially being rooted in the idea of local and not structural causes. But the fact is that Cameron didn’t try to solve these flaws, he just negotiated on his own terms even when the national interest was that the Eurozone has a long lasting solution to its problems. Calling the battle lost and not arguing for a better deal for everyone has been disastrous for Britain and it will be the same for Labour.

Labour’s approach must be pro-active and pragmatic. The fact is that we should have no interest in leaving the EU. It is fantastic for Human Rights, Employment rights for Britons across Europe, social rights, environmentalism, accountability, international trade, mutual international policy formation and the opportunities for students, workers and businesses to expand to a bigger market. There has been so much work done in Europe, it’d be a waste to throw it away. When you read the newsletter of the EPLP and see what work is being done there, you wonder why nobody hears about it.

Merkozy’s populist approach is destructive, and Miliband should not be concerned with making the same error. Instead of being parochial, he must lead the debate on to where Europe should be going, talking about things such as greater fiscal accountability between states. He has the bargaining chip of being able to offer greater participation in the Stability Funds for other EU states, who we should be helping anyway.

Politics is always in my eyes about doing what you think is right for the people of the country. Running away from a problem never works out well for a country and never works out well for a leader.

The Politics of National Interests

David Cameron defended his stance on Europe as being in “Britain’s National Interest”, a phrase unsurprisingly one often attributed to those of a more conservative approach to global politics. This attitude towards Europe in particular, is one that is misplaced within a liberal framework based on mutual goals and it is one which will continue to cause unease and instability in the wider economic, social and political sphere of Europe.

There is a complaint which Eurosceptics often make, where France pushes for a special deal on this, and Germany pushes for one on that which has made David Cameron’s approach so hypocritical. This is an example of just one of the wrong attitudes towards Europe which makes it structurally weak. David Cameron looking to be exempt from the deals in a time where leaders are recognising these weaknesses shows how out of touch from the rest of Europe the Conservatives has become.

Many people are now coming to the realisation that the problems within the Eurozone were structural and not entirely local and that these structural issues have plagued the Eurozone and European Union since their births. The blog streetlights explained in depth why even if countries within the Eurozone were keeping comparably good budgets (the example being Spain in comparison to Britain), countries within the Eurozone can come to a sudden stop. Structural issues take structural solutions, and markets will not invest in a ship that doesn’t sail correctly.

This criticism is not new, in fact it is the reason that the United Kingdom is not in the Eurozone right now. Criticisms in the Five Economic Tests point out things such as “If Problems emerge, is there sufficient flexibility to deal with them?”. The is one country in particular who is to blame just now for the lack of flexibility.

Ironically it is the United Kingdom which symbolises the inherent weaknesses in the European Union’s ability to be flexible in a time where a problem affecting all needs a solution agreed by all. Determined to stand up for the “National Interest”, David Cameron managed to shoot his veto right into his own foot. The National Interest in this circumstance is to find a solution which can adequately solve the structural issues which caused the financial crisis and are stopping the EU from solving it. If these issues are not properly engaged with then in the shirt term it is unlikely that markets will have the confidence to invest in a flawed marketplace and in the long term we may be threatened by a repeat of this crisis.

David Cameron instead of offering any in depth criticism of the proposed changes looked to get get power back from the EU, completely the opposite to what was needed. When all other states were engaging with serious structural weaknesses one of the largest marketplaces in the world, David Cameron clearly misjudged the situation and therefore lost out for Britain. His defence was that he was standing up for the national interest, but his approach has been symbolic of the stances which led to the Eurozone crisis and harmed the interests of all. Thus he has harmed Britain’s long term diplomatic, political and economic interests within an increasingly global political sphere.

Analysis of the Eurozone Crisis, even that which is critical of Cameron, has been as parochial and lacked a certain depth of what the agreement in the Eurozone actually means for Britain, Europe and the world. I hope now to offer a viewpoint on the situation we find ourselves in now.

Being pro-Europe usually comes with the assumption that I approve of the deal. I don’t. I am not a member of the EPP. I am a member of the PES. “Merkozy” have tried to come across as two shining knights riding to save the Eurozone, when in reality they have been reluctance to implement Eurobonds and wide ranging structural reform beyond a “Golden Rule” which possibly will do more harm than good. At the same time, these are two unpopular leaders in their own countries, Merkel now planning u-turns on issues such as the minimum wage and Sarkozy struggling in polls against the PS.

The “Golden Rule” possibly will do more to choke of options for governments to grapple with economic instability and long-term growth. At the same time it is rooted in the idea of bad governance and local issues being the problems which led to the Eurozone crisis. Van Rompuy is someone I had more hope in, and the plans from him and Barroso were more hopeful. This means that the decision reached at the meeting is unlikely to be the last and will throw up more problems for the future.

David Cameron, although now without the means or mind to implement it, must stand up for the national interest by making sure that the agreements reached in Europe are ones which will secure the long term stability for Europe and therefore for the UK too. Eurobonds are more likely to convince markets that the EU and Eurozone is committed to finding a solution and action plan to the problems it faces than the Golden Rule. The Golden Rule is likely to limit the options for Governments in the long term, and instead the Eurozone should look more at the political aspect of budgeting and co-ordination at a European level. Britain must offer a constructive criticism of the plans and work to make sure that the Eurozone considers greater political integration and co-ordination with their budgeting and market regulation in future. In return for this Britain should offer to be more involved with the stability funds in the Eurozone to show that we are not only part of Europe, but an active part of Europe concerned with finding a solution to the crisis we find ourselves in.